Senior life insurance is a whole life policy that seeks to settle an individual’s end of life debts, burials and other end of life costs associated with settling the estates. Senior life insurance is identical to what was formerly known as final expense life insurance or burial insurance. Typically, these policies range from ten to twenty thousand dollars of coverage.
There are some small policies in existence that will also cover the low cost of some funeral services like cremation. They function like smaller versions of whole life policies that are for specific purposes like final expenses, and they function in much the same manner.This insurance can be carried for life and builds cash value, as well as a tax free death payout to beneficiaries and the cash value can be borrowed against.
There has been a heavy proliferation in the acquisition of senior life insurance since the development of term life insurance. Formerly, when families first started out, they would purchase a sizeable whole life policy that the family would keep until death. The use of the policy in this manner was due to the inexpensive nature of this insurance product.
Since the inception of term life insurance policies, families have begun to purchase term life to cover large expenses, college, children and mortgages. After the responsibilities of the young family have been satisfied and term policies expire, these families often purchase small senior life policies to cover the present needs of the maturing family.
This allows the insurance policies and benefits to change as the needs of the family changes. This insures that the family does not purchase unnecessary policies over a lifetime, and this makes insurance cheaper overall for the families.
The average cost of funerals is often listed as approximately six thousand dollars, but the reals costs average eight to ten thousand. There are several hidden fees that are not listed in advertisements or when funeral directors give estimates to prospective clients without detailing the exact lists of services or final costs.
Funeral costs are composed of the funeral director fee, headstone and cemetery services. In some cases, pre-paid burial plans are opted for instead of senior life insurance to cover final expenses. The benefit of pre-paid plans is that they allow the insured to plan their own arrangements and not burden the family with the responsibility in their most vulnerable time.
Some pre-paid plans are now written so that if the plans are not fully paid or if there has been a significant increase in the market rate of the services at the time of death, the family could still incur significant charges over the plan’s assigned rate. In addition, pre-paid burial plans are commonly not transferable across state lines, and the penalty for cancelling these plans could be thirty percent or more of the value of the plan.
Senior life insurance is a completely better insurance product. Senior life coverage provides instant protection that is not only transferable across state lines, but they can be completely modified to reflect changes in life’s situations. To help families through the grieving and the wishes if the covered individual.
The consumer should relate their wishes to their loved ones in written and oral form. Using normal insurance rates as a marker, life insurance for seniors is very affordable. Because life insurance rates by age, life insurance is much cheaper when bought at earlier ages. Life insurance over 50 is still in the very affordable range.
Life insurance for elderly can be made even cheaper by choosing a lower final death benefit. To avoid many questions about health, seniors can opt for a simplified issue insurance policy. Non paramedical policies may only require bodily fluid samples, but guaranteed issue policies may only have a three question questionnaire to qualify for acceptance.
Younger, healthier consumers can choose a paramedical designation for a life insurance policy that will designate lower premiums according to the health level of the consumer. Rapid Decision Senior Life insurance is an insurance product offered for consumers between the ages of fifty and eighty-five. Although a few companies require a few medical obstacles, most companies do not require a medical exam.
However, they do have a set questionnaire and some internet database inquiries. People age fifty through seventy can purchase ten thousand to one hundred and fifty thousand dollars of coverage in policies with ten, twenty, and thirty year term lengths. However, the coverage is partial until the beginning of the policy’s fourth year of maturation, but the death benefit is paid for any cause after year three until the end of the term period.
Cheap life insurance Policies
Term life insurance policies are simple, cheap life insurance policies. It only offers coverage that is necessary without frivolous add-ons. Therefore in some form, term life is accessible to the masses, and quite often it is the best choice for most people. Term life is a policy that is in effect for a limited time or term. This term can range for a year to even thirty years. Life insurance is only necessary when a person does not have enough money to have their families live comfortably at this point in life.
Often, families do amass the amount of money that makes simple life insurance policies very unnecessary. If this point in life is expected, the term a person chooses should coincide with that time in which the money is saved elsewhere. If death occurs prior to the term or the money is saved elsewhere, the term life policy will pay the beneficiaries a death pay out.
Of course, if the policy is not extended and death occurs after the term expires, there will be no payout. Term life insurance is often not accessible for people that past the age of eighty years. However, term life is rarely necessary in that age group.
Term is life is available in two designations. The first is annual renewable term life. This is a single year of coverage that is also renewable annually. Level premium term life insurance is purchased in the preferred length of the term life policy. Level premium term life insurance is often offered in five year increments and in up to twenty year policies, but there are some level premium term policies that have term lengths for longer periods of time than that.
Annual renewable term policies are commonly having the lowest initial premiums of any life insurance available. However, the premium rises as the person that is covered ages. If a person or family is just starting out or are expecting to have more income in the future for whatever reasons, starting with a low premium that gradually rises with age, may be a suitable form of insurance. Therefore, for this purpose, annual renewable term life insurance is the cheapest option.
In contrast, level premium term insurance allows the premium to be locked in for the entire term of the policy. This fixed rate protects the insured from future premium increases that could cause the insured to lose coverage at the most vulnerable ages. However, the premium is based on the amount of the death benefit payout, age and health. This means that premiums are cheaper for younger, healthier individuals.
A common breakdown of the price is that a five hundred thousand dollar, twenty year term policy with a fixed annual premium will cost a healthy forty year old approximately three hundred and fifty dollars a year.
If this person waits until fifty years of age, that same policy’s premiums will triple. By age sixty, that premium will cost ten times the amount the policy would have cost at forty. This means that the three hundred and fifty dollar annual premium for the forty year old healthy man would cost three thousand dollars annually if the same policy was purchased at sixty.
Policies that accrue a cash value have considerably higher premiums. This is because a portion of the premium goes toward the investment instrument contained in the policy. A policy that builds cash value may cost a healthy forty year old approximately three thousand dollars annually.
The best place to shop for the cheapest life insurance is to look online to find different types of life insurance. In addition, look at life insurance reviews because the local market in the consumer’s area may be only able to represent a single company. Because the agent is not able to shop around and find the cheap life insurance, the premiums are often higher from these insurance professionals. However, if the agent is independent, they can shop multiple companies to discern the best rate for their client.
In addition, these agents may be able to consider their client’s particular situation in determining the best coverage at the best price. This, by nature, may not be the cheapest premium, but it may be the best coverage. However, because the agents can represent hundreds of companies, the companies must compete for the client’s business.
This means that the independent agent will offer the lowest premium when covering their client with the appropriate amount of insurance. Buying too much coverage is a problem for consumers. Independent agents prevent this from happening, thereby, saving their clients even more money.
What are some of the top insurance companies?
The advice given to people who are seeking life insurance policies is to obtain policies from companies that are financially sound and that have high ratings from the leading ratings agencies, but this system is hard to navigate for people that are not informed in the technical matters of the situation. However, this includes most people.
Another discrepancy with simply using an insurance company’s ratings to determine if they are a suitable company for the consumer’s needs is that most insurance agencies and these ratings agencies have prior relationships that may cause the ratings garnered from the agencies appear to have conflicts of interest. These ratings agencies also suffered considerable credibility damage in the latest financial meltdown. They were active participants in overrating and concealing problems with companies that would later tank the global economy and specifically the American economy.
In addition, these companies suffered significant damage in the particular portfolios that are used to determine the financial stability of these companies. In some cases, the company’s damaged credibility was correctly assigned to the companies that played a part in the demise of the economy. However, if the companies recovered and returned to providing a quality insurance product, the damage that is contained in those portfolios will unfairly cast doubt on companies that have sufficiently recovered and are strong and viable again.
Although most states offer an alternative to the open market when purchasing insurance by offering state mandated minimum coverage policies that often only address end of life issues, people entering this market will find the coverage lacking significantly. These policies often only offer half of the current payout of life insurance policies in the open market.
However, the ratings systems are sound by certain parameters. Their basic credibility is upheld in that companies with the highest ratings have the least chance of facing insolvency. In comparison, companies with the worst ratings suffered a significantly higher rate of subsequently facing insolvency.
Of the companies with low ratings, thirty-three to a hundred percent went insolvent according to the severity of their low rating as compared to the higher rated companies. Still, because companies use their ratings as a draw for potential customers, some still question the validity in their ratings. This provides a profit motive for insurance companies to influence the ratings agencies.
This also allows moderately rated companies to appear much stronger financially than the companies actually are. This in turn, muddies the waters surrounding the consumer’s ability to decipher the system and determine the best company with the best value that also services their needs without over buying coverage. In addition, the top tier companies have lobbied the ratings agencies into instituting a system that uses several types of A ratings.
This means that a company that has influence can qualify in a myriad of ways for any of the A ratings. This is effective as a marketing tool because the public will only see the rating as an A rating when in fact, their particular A rating could be the last of at least four variations on the A rating.
The financial strength of the companies is, in some part, determined by the analysis of the company’s balance sheet, financial vitality, capital ratios to reserve ratios. The data is discerned from governmental reports, as well as analysis from outside sources. This determination of financial strength only accounts for a part of the ratings agencies system of assigning ratings.
The top agencies then approach the companies to assess if the companies are actively addressing any issues that were related to impaired ratings. The companies then have the opportunity to directly influence the ratings system.
However, in spite of this influence, because of newly formed credible reporting agencies and the public’s ability to search the Web for pertinent information about these companies, ten companies have continued strength financially and also have reviews for customers that are satisfied with the range of their services, the costs and their customer service involved. There are some consistencies that customers and reporting agencies like to see in the top rated companies.
They are twenty four hour customer service support and guaranteed death benefit protection. The top rated companies also all offered the full range of life insurance products like term, universal, variable and whole life policies, but because the top tier matrix is so convoluted by top tier company lobbying, it is appropriate to list the top ten in no particular order.
Top 10 Life Insurance Companies
|1. Met Life|
|3. American General Life|
|4. John Hancock|
|6. The Hartford|
|7. JCPenney Life Insurance|
|9. Bankers Life and Casualty|
Guaranteed issue life insurance and critical illness insurance
Americans are most often afflicted by three primary critical illnesses. These are stroke, heart disease and cancer. However, critical illness insurance may also protect individuals against the costs of bypass surgery, major organ transplants including kidneys, blindness, heart valve and aorta surgery. Today, there are approximately over a half million Americans with critical illness insurance, and the industry is approaching approximately twelve billion dollars in active critical illness policies.
Critical illness policies are available through a variety of outlets including online, financial professionals, personal insurance agents, employer plans and as rider policies provided to supplement some individual life insurance policies by their insurance provider. However, there is some critical illness insurance that is dedicated to particular illnesses. Cancer insurance is one of the most common types, and other non-specific critical insurance is still obtainable regardless if a cancer policy is already in effect.
Individuals purchase critical illness insurance because there is a good chance that many people will survive these illnesses, but may be too impaired to return to a normal life or health as a result of the disease and the related treatment. In addition, a family’s total financial resources can be expended fighting these diseases and entire careers can be lost forever. Being underinsured or without insurance can cost a family everything. Even those with adequate insurance will face high deductibles, prescription costs and other expenses that will come directly from the cash savings of individuals or families.
These expenses could total many hundreds of dollars monthly causing the family or individual considerable hardship. Creditors lend no credence to the hardships of their customers, therefore, mortgages and car payments will have to be paid, as well as utilities and food. One bill that is not often considered even in these circumstances is that the insurance will also have to continue to be paid. The consequences of losing coverage at this point could be detrimental to living.
Critical illness insurance will pay a single, tax free, cash payment in a lump sum. This is payable if the insured survives a diagnosis of a critical illness for the period of time specified by the policy. In addition, there are several polices that will pay additional increments if further stipulations are met. The cost of critical illness insurance is often based on the age and health of the insured when the policy is purchased.
It also takes into account gender and if the insured ingests nicotine either by smoking or other delivery devices. In the smaller increments of the policy values, like those in the seventy thousand dollars of coverage range, the health stipulations are fairly moderate, but they can become significantly more expensive the more complicated the case is.
However, coverage can be purchased in virtually any amount from five thousand to a million dollars, but most policies average form ten to fifty thousand dollars of coverage. Some rates are guaranteed on the critical illness policies for a standard time. After this set period, the insurer will often petition their state’s insurance regulatory division for the right to increase the rate.
The set guaranteed period is often from 3 to 5 years. However, they cannot apply for an increase on an individual policy holder. They must apply to raise the rates over an entire group of policies at once. They commonly cite that many more claims were initiated than were anticipated by the company.
Critical insurance is designated as a health policy for sickness and accident. Because of this, the premiums are not tax deductible for the individual purchaser. However, the benefits are free of taxes. Often, businesses purchase critical insurance for their most necessary employees, and sometimes for founders and owners.
When that business is the beneficiary of the policy, both the premiums and the paid benefits are tax deductible. Because no one can accurately predict these events under any circumstances, the weight of the premiums is carried by those that are in a less healthy state and older than by those that are healthy and young.
This is the industry’s method of providing coverage for those less healthy people. This means that height, age, weight and smoking are significant factors in determining the costs of the premiums. However, some employer based plans cover everyone in the company.
This type of guaranteed issue life insurance or guaranteed acceptance life insurance is called a guaranteed issue basis policy. This makes an employer based plan for individuals that are in a less than healthy state, smoke or are slightly older, but young individuals that are healthy may find better value searching the open market for this type of product.
No exam life insurance
No-medical exam life insurance does not require a medical exam for acceptance. It allows a policy to be started with only a few initial queries. The policies are often only issued as term life policies. These policies typically provide a death benefit that is payable if the insured passes prior to the termination of the policy. The most often issued terms are in five, ten, twenty and thirty year policies.
The coverage amounts for life insurance without a medical exam are restricted to certain amounts, but the policies often range to half million dollar policies. This often varies greatly depending upon the company that the insurance is written under. These policies are beneficial to consumers in a myriad of ways. If a person needs life insurance immediately, these policies are offered with very little delay.
Often, many people simply do not want to have physical exams for many reasons. In this case no-exam policies provide coverage. In any case, it allows the family to not incur undue financial burdens due to the demise of the insured. However, as stated before, these policies do have a questionnaire that requires full completion before coverage is commenced.
These questions ask health related questions that must be answered truthfully. This is the only method of insuring that the death benefits will be paid to the beneficiaries of these particular types of policies. In addition, these policies commonly have two types of waiting periods, and it is incumbent upon the insured to understand which waiting period applies to them, but they are standard.
The first waiting period is termed the Suicide and Contestability Waiting Period. This means that the insurance company has up to two years to substantiate the claims that the insured made when applying for this type of no medical exam life insurance. In addition, the same two year period applies to investigating the cause of death after the claim is made by the beneficiary and denying the claim based on the investigations.
If a person takes their own life within this initial two year time frame, the company is well within its rights to deny the claim. This is to diminish any chances of purchasing policies to benefit families by the suicide of the insured. The next form of waiting period is the time allotted for guaranteed issued life insurance policies.
This waiting period is for the same initial two year term, but no benefits will be paid for any death that occurs before the termination of the two year period, but in this case, the premiums will be repaid with interest if the death does occur before the termination of the initial two year period. These policies are commonly reserved for people that were unable to be covered under most other term life policies.
It is important to remember that deceit in this arena can be discerned by intricate methods that are employed by the insurance companies. In addition, only surrender the information that is asked of the applicant. It is not necessary to divulge information that is not requested by the interviewer. However, honesty will insure the insurance provides for the circumstances that the insured intends.
If it is revealed to the company that the information is not accurate, the company can sever ties with the insured by denying any claims, canceling the policy and refunding the premiums. There are several conveniences connected with no medical exam life insurance. The policies are quick and easy to obtain and can be commonly approved within twenty-four hours.
However, the policies are sometimes considerably more expensive than policies that are not life insurance no exam. Life insurance no medical exam insurance may be five times as expensive as insurance that requires an exam. Often, when people receive a medical exam for insurance, various health problems are revealed that could severely shorten life. This process often allows the time to treat these problems effectively and before the problem causes death of severe impairment.
Not having the extensive exam that comes with insurance that requires an exam, may leave those problems to cause more significant problems and even death. These policies are very convenient and although they are more expensive than other forms of this type of insurance, they offer immediate coverage without incurring the expense of a medical exam.
This means that coverage can be accessible if a person needs insurance after receiving a clean bill of health. Medical insurance without an exam is also a favorable policy for people in rural areas or that need coverage after moves into areas before they have established a relationship with suitable doctor’s offices.