Will My Rates Every Increase?
Have you ever purchased something only to find out later that it wasn’t what you thought it was? This often happens because we were misled or we didn’t ask the right questions.
When purchasing life insurance for seniors, it is very easy for this to happen. These policies are often purchased for an individual, an elderly parent, or a family member with the intentions of covering the insured’s final expenses. This can be a very valuable asset to those left behind and is often referred to as burial insurance.
Many companies offer senior life insurance policies. It’s important to understand how to decipher the differences between the various plans. Let’s look at three areas to consider when purchasing a senior life insurance policy.
First, let’s consider the monthly premiums. We often are asked if the monthly premiums are fixed for the life of the policy. If the premiums are not fixed, the policy becomes unpredictable. The majority of individuals purchasing a burial insurance or final expense insurance policy are on a limited or fixed income. If the monthly premium increases over time, the policy may become unaffordable, causing it to cancel.
Not all policies have a fixed premium, so it’s important to clarify this point at the time of purchase. Even if a fixed premium policy is a little more expensive at the time of purchase, nine times out of ten it will be a better value in the long run.
The second area to consider is whether or not a policy has a waiting period. This means that the policy is not fully in effect until it has been in place for a waiting period of typically two to three years. If the insured passes away during the waiting period, the insurance company would simply return the monthly premiums paid in plus interest. The full death benefit would only be paid out if the insured passes away after the initial waiting period.
There are times that a waiting period policy can be required due to an individual’s significant health situation. However, more often than not, individuals can qualify for a no waiting period policy. Be sure to clarify this prior to purchase.
The third area to consider is whether a policy has a cutoff or termination point. Since you don’t know when you will pass away, it’s important to have a policy that will cover you for the rest of your life. Many companies offer burial insurance policies that terminate at age 80 or 85. If the insured lives beyond that age, the policy is no longer in force, and at that point, it can be difficult to find a replacement due to health or age.
We feel that by considering these three areas, individuals can avoid the most common misunderstandings or mistakes made when purchasing senior life insurance policies.
If you need help finding a policy that’s right for you or simply want to explore your options, you can call us directly. We have licensed insurance professionals available in most states and would be glad to answer your questions.