For years there has been the idea that older people do not need life insurance. There was a time when insurance companies even refused to cover seniors. Today, in many states, laws have changed and require life insurance companies to provide guaranteed coverage to people over 63 years of age.
But people 65 and older still find it difficult to purchase life insurance. Whole life insurance premiums are quite expensive. But there is a way to cover your golden years with an insurance policy that serves an important purpose and is relatively affordable.
It is called Term Life Insurance and is generally purchased for a temporary need, such as covering a bank loan or mortgage. Term life is the most affordable type of life insurance to purchase and, for our purposes here, cover the potential final years of your life.
Seniors with a history of good health up to age 75 may qualify for a 10- to 15-year policy worth between $10,000 and $25,000 with a premium of less than $100 per month and no medical exam.
You may be thinking that it is not worth spending $10,000 to $25,000 for a 10-year period, but as you will see, this is not the case.
If you have a mortgage, $25,000 will allow your beneficiaries to make mortgage payments for approximately 2 years. Your loved ones can stay in the home you worked so hard to keep until they decide what to do with the property. This will give them time to grieve and remove any immediate financial burden.
And what better way to preserve your legacy than with a $25,000 donation to a favorite charity or organization of which you were a member. A tax-free gift that will be used for something worthwhile will be greatly appreciated and remembered for years to come.
Another great way to help someone is to leave money to fund their education. A cash donation of this magnitude will go a long way in helping any college student with tuition, housing, books, etc. Others can find a creative way to use the money by investing in an endowment to help fund 4 years of college or more.
Most importantly, the money is used to cover final expenses at the end of life. With average burial costs ranging from $8,000 to more than $15,000, a $25,000 term life policy is practical and eliminates the financial burden that an unexpected death can create.
When your loved one turns 65, start determining if they need more insurance coverage. It is better to be overinsured than underinsured. When my mother passed away last year, she once told me that she had enough insurance to cover her final expenses. The death benefit on her life insurance policy was only $1,500 and I had to pay the rest out of pocket. Between $10,000 and $25,000 would have been helpful.
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