People generally have fewer financial obligations as they get older. A home mortgage might be paid off or nearly paid off; the expense of raising children and putting them through college may no longer be a factor.
In addition, you may have a substantial amount in your retirement savings.
So, is life insurance for seniors necessary? Maybe yes, maybe no, although life insurance at any age can be important. You might not need the same level of life insurance as when you were younger, but the risk of not having life insurance may still be greater than the cost of having it. A lot depends on how many loved ones are dependent on you and how much of a safety net you already have.
Here are a few questions to consider when thinking about buying life insurance for seniors:
Is anyone dependent on your income? This is a question that you need to consider when buying any kind of life insurance, not specifically when you’re a senior. If you’re retired, your spouse may be financially dependent on your pension. The same goes for Social Security benefits. Would your loved ones need to make drastic lifestyle changes in order to maintain their current quality of life? If your answer is yes, you should consider life insurance coverage to ease the financial burden of your loved ones, should the unthinkable happen to you.
Do you have any debt? The total amount of your financial obligations may decrease as you get older, but you may still owe money. If you become ill later in life, do you have enough health insurance plus supplemental coverage to cover about 80% to 100% of the cost? Do you want to give your loved ones peace of mind by knowing that your medical bills, funeral costs, and other final expenses could be largely covered by insurance?
How much do you have in retirement savings? Because people tend to live longer than ever, the senior years can last for decades. Are you still working? Have you retired? How long do you think you’ll be able to work before needing to retire? The amount of money that you have set aside for retirement may not match your actual life expectancy. Life insurance can help ensure that your estate could remain intact, as well as alleviate some of the impact that your loved ones might feel from the loss of your income.
Do you have an estate plan? Frequently, seniors buy life insurance to leave something behind for the loved ones or charitable causes that they care about most. Life insurance policies can accumulate cash value, and can add value to your estate.
Are you in good health? The amount of life insurance coverage that you can buy, and its cost, are often but not always dependent on your health. Insurance companies typically take into consideration the following factors to determine if you are in good health:
- Family history
- Height and weight
- Cholesterol levels
- Blood pressure
- Any existing medical conditions
Even with a less-than-perfect bill of health, it is still possible to buy certain kinds of life
insurance. Learn more about the different kinds of life insurance for seniors to consider.
When exploring whether life insurance could be important during your senior years, and to calculate how much coverage you might need, be sure to take into account any outstanding loans, mortgages, or business obligations you might have.