Choosing the right term insurance
At 25, you bought a 30-year term life insurance policy. You are now 63, the term ended years ago, and health concerns are on the horizon. Your previous policy was fairly cheap; after all, at 25, chances of declining health are low. What do you do now?
First off, let’s take a look at what term insurance is, and whether it is right for you compared to general life insurance.
Term life insurance covers a period of time – or a term – usually of 10, 15, 20, or 30 years. The younger and healthier you are when you apply, the better the premium. It might cost less for a $500,000 policy than a $100,000 life policy, but there are risks involved.
How likely are you to suffer a drastic decline in health between the ages of 25 and 55 on a 30-year term policy? Not likely. You probably won’t see the $500,000 – but it’s still there, as insurance, just in case. It is better to have and not need, than need and not have insurance. But, the more expensive $100,000 policy that is just life insurance, no term added, is guaranteed to pay out. It should be noted, though, that term policies are much more stringent in qualifications. An application could be denied based on height, weight, cholesterol, or blood pressure.
Term life insurance can be bought at later ages, but the premiums won’t be nearly as good as those buying at 25. Despite this, great prices can be found, and it’s a great option for a child to cover their aging parents.
It’s also important to note that term life insurance covers more than just nursing home care. In-home aides can be covered, or adult day care, depending on the policy. They are flexible in both terms of what is covered, such as installing ramps or grab bars, and actual care provided.
Let’s look at an example of what term insurance can do. A couple marry at 29, and decide at 35 to get term life insurance for 30 years. At 61 years old, the wife discovers she has brain cancer. Two years later, she is confined to bed, health rapidly failing. The insurance could cover a ramp for the front door; grab bars for the bathroom; the hospital bed; and a daily nurse. Some policies also allow for family caregivers, or even family friends who offer their time. Reimbursement for their services and training could fall under the insurance policy. Premiums for this policy were locked in at a young age, when the wife was healthy, enabling her husband to easily take care of her.
But, getting term insurance at 40 or 50 is possible, and will still give the same coverage – just at higher premiums. If you don’t qualify for term insurance, there are still life and burial insurances.
Burial insurance, as the name implies, will help cover funeral costs, and may cover other death-related financial matters. Burial insurance tends to be open only to those between the ages of 50 and 85; policies and qualifications differ depending on the company offering insurance. Be sure to compare prices and benefits.