Monday 10 June 2013

What is Seniors Life Insurance?

The need for life insurance changes during different stages of a person’s life. Typically, life insurance policies are held by individuals under 40 years of age as a way of providing young families with financial support in the event of an accident or tragic circumstance that takes the life of the household’s primary earner. Younger families with mortgages and other forms of debt have a much greater need to access funds in the event of an untimely death than older individuals. Seniors with properties that have already been paid for and have grown children that support themselves often do not have the same financial needs as younger individuals, but there are numerous reasons why older individuals might need senior life insurance.

What is Seniors Life Insurance?

Types of Life Insurance Policies for Seniors

Most seniors opt for term life insurance. With term life insurance, designated beneficiaries receive a single lump sum payment if the insured loved one passes away within the dates specified in the policy. The funds can be disbursed and spent however the inheritors choose.

Funeral insurance is a form of life insurance that is specifically designed to help seniors cover the expenses of their funeral. This type of insurance instrument is very similar to standard life insurance in some ways, but it is different in some regards as well. Standard life insurance policies do not restrict how the funds may be used in any way, which allows inheritors to use their own discretion when disbursing and spending funds. Funeral insurance, however, has certain restrictions in place that dictate that the funds from the life insurance policy can only be used to cover the funeral expenses.

Reasons for Senior Life Insurance

A senior life insurance policy is a unique financial instrument that is typically used by older individuals that want to provide for their heirs or simply cover their final expenses. However, the following benefits can also be witnessed by having a senior life insurance policy:

Resolve Outstanding Debts

Seniors that have spent their lifetime providing for their families may not have excess funds to live a debt-free lifestyle in their older years. Unfortunately, many of today’s seniors have been forced to take on debt similar to their younger years. Unpaid debts become the burden of loved ones upon death, so some seniors choose to use life insurance benefits to supply their loved ones with the financial means of taking care of their debts when they pass.

To Provide for Heirs

Rather than creating a financial burden for their loved ones, seniors are able to use senior life insurance to provide their heirs with a healthy sum if they choose.

To Provide for a Surviving Spouse

The disruption of an income stream can cause a severe financial hardship for a spouse that has no other means of supporting themselves financially. Spouses that have not worked and do not receive their own social security or pension benefits need a way of continuing the lifestyle they have known their entire lives.

To Pay Estate Expenses

Often, people do not consider the legal fees associated with the settlement of an estate, but they can be substantial and create a financial burden for surviving family members. There are various legalities associated with estate settlement, and the use of an estate attorney can significantly add to a person’s final expenses.

To Cover Funeral Arrangements

Funeral costs can amount to thousands of dollars. Seniors without the financial means to cover their final expenses can benefit from the financial support provided by life insurance policies to keep their loved ones from acquiring the burden of paying for their funeral expenses.

The reasoning behind having life insurance may change throughout a person’s life, but people of all ages utilize life insurance policies as a means of securing their financial arrangements and providing for their loved ones. Senior life insurance policies reassure seniors that the financial security of their surviving loved ones will be taken care of, which provides them with a strong motivation to maintain life insurance in their older years.

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