What Seniors Need to Know About Life Insurance
Most states require drivers to carry auto insurance, and every smart homeowner knows that homeowners’ insurance is a necessity. But what about life insurance? It’s often seen as an “extra,” not a necessity, but nearly every adult can benefit from purchasing a life insurance policy. Seniors should work with an independent insurance agency to find a policy that best fits their needs and goals.
Before you can choose a specific policy from a certain carrier, you need to determine if term, whole, or universal life insurance is best for you. Term life insurance has a built-in expiration date. The most common terms are 10, 20, and 30 years. If the policyholder dies when the term life policy is still active, then the beneficiary receives the death benefits. The advantage of term life is that it’s typically more affordable than universal life. The downside is that it holds no other value—unless the policyholder dies when the policy is active, the beneficiaries receive no benefits.
Whole life tends to cost a little more than term life because it offers lifelong coverage. And unlike term life, it can benefit the policyholder directly. It has an investment component—a cash value that grows slowly and is tax-deferred. The policyholder can borrow against the cash value, but must repay the loan with interest or the death benefit will be reduced. Although whole life is pricier, the premiums are locked in for life.
Universal life is a hybrid policy that combines elements of term and whole life policies. Like term life, universal life has low premiums. But like whole life, universal life insurance has an investment savings option. However, universal life tends to be better suited to people in their 20s and 30s because it takes time for the investment to pay off.
American Senior Benefits specializes in helping seniors find the right insurance products at the right price. They are an independent insurance agency located in Hudson, WI. You can contact their office at (612) 865-3318 to request an appointment.