Underwriting Still Needs To be Completed
Something to keep in mind is that underwriting will often still need to be completed and your overall return and the total death benefit is going to be gauged by your risk profile, current age, and current health.
According to Joshua Martin (Founder of Good Life Protection), this is one of the most significant reasons why you always need to work with an independent life insurance agent who can find you the best rates with the best potential life insurance company.
All life insurance companies have unique strengths and weaknesses.
Additionally, certain life insurance companies cater to certain health niches.
This is when using an independent life insurance agent with access to dozens of top-rated life insurance companies can become very beneficial for the consumer.
Not doing so can equate to the same thing as throwing your hard-earned money out the window.
Living benefits are a vastly under-rated benefit of single premium life insurance.
They are specifically designed to help provide financial relief during a financial crisis that occurs often due to illness.
According to Danny Ray, owner of Insurance for Burial, these riders often act as your “long term care” in these situations providing tax-free access to your death benefit to help cover these backbreaking medical costs.
Something to keep in mind in this situation is that the money is deducted from your total death benefit that will be passed on your beneficiaries’ tax-free at your passing.
Here’s an example.
Ted owns a single premium life insurance policy that he purchased for 205,000.00 when he was 52 years old that has a current death benefit of 510,000.00.
If Ted happens to fall ill and incurs significant medical expenses, he would be able to forward or “accelerate a portion” of these death benefits up to a maximum percentage such as 75% or 90% with some life insurance companies.
Let’s assume Ted needs 132,000 to pay for the cost associated with having cancer.
When Ted does pass away, the remaining death benefit provided to his beneficiaries will be the following.
510,000- 132,000= 378,000 (Given to Beneficiaries at Teds Death Tax Free).
Clearly, the versatility and protection provided from multiple angles is something not to ignore.
Especially if you have the financial means to add this barrier and outer layer of protection to your financial fort.
Finding the Best Companies for Single Premium Life Insurance
Plans are not hard to find, and plenty of life insurance companies offer the ability to purchase this form of life insurance.
However, we do recommend considering a few companies before exploring secondary options.
Again, as stated before, this is when it becomes essential to work with an independent life insurance agent or agency that understands your goals and situation, and that can effectively find you the best company to tailor towards your needs.
The Three Best Life Insurance Companies for Single Premium Life Insurance
American National (ANICO) has been around for over 100 years, initially founded in 1905.
American National is also known by independent life insurance agents as a top-rated life insurance company for permanent life insurance and currently is backed by an impressive A+ financial strength rating from A.M Best.
American National is also regarded as a top option in the industry for living benefits afforded to their policyholders on a wide range of life insurance products.
Protective Life Insurance
Protective Life Insurance is another great option to consider when shopping single premium life insurance.
Protective Life is another A+ rated company that was initially founded in 1907.
Protective Life is also known as one of the most competitively priced life insurance companies you can choose for term life insurance and guaranteed universal life insurance (GUL) among other products.
Lincoln Financial Group
Lincoln Financial Group has been a powerhouse in the life insurance and financial services market for years.
Lincoln Financial Group is another life insurance company on the list that’s been around over 100 years founded initially in 1905.
Additionally, LFG has some of the highest regarded permanent life insurance products on the market due to stable performing returns and excellent policy riders.
While plenty of other life insurance companies certainly offer single premium life insurance, these three companies are at the top of the list and should be considered.
Consumers are often curious of their options when it comes to accessing cash value with single premium life insurance policies or permanent life insurance in general.
In most situations, individuals will need to elect to either take a loan against the policy or can have the option to pull a certain percentage due to illness as we discussed previously.
It’s also important to realize that any money you remove from the policy will be deducted from the total death benefit or cash value (refer to our previous example).
This ultimately is reducing your total payout or total cash surrender for the policy and removing money from your beneficiaries at your passing.
This is not ideal, but sometimes it’s necessary. It all depends on your unique circumstances.
A majority of life insurance companies also have stipulations on your withdrawal options such as only allowing you to withdrawal 10% of the premiums paid into the policy or 100% of the policy gains.
Whichever is greater.
It’s imperative to discuss these options, stipulations and potential tax consequences with your agent, financial advisor, or accountant before making any withdrawals from your policy.
Drawbacks and Negatives with SPL
Single premium life insurance doesn’t come without a hindrance or two. Typically, SPL (Single Premium is life) is going to have large minimums to apply for a policy.
This may be $5,000 or higher depending on the company and all other factors involved.
Additionally, most investments in life don’t require medical underwriting.
This is not the case with single premium life insurance.
When purchasing this form of life insurance, your premiums, and the total death benefit will be significantly impacted by your age, overall health, and even your tobacco use.
Final Word, Single Premium Life Insurance Is a Versatile and Robust Option
While single premium life insurance may be cost prohibited for a significant number of consumers, it’s still a great option if your budget and financial plan allow for it.
With the options to cover costly medical expenses and the ability to get an immediate return for beneficiaries, it’s certainly a path worth discussing with a licensed agent who can place you with a life insurance company that can tailor towards your needs.
Absolutely. You could have 10 insurance policies at the same time if you wanted to.
What are some reasons for having multiple life insurance policies?
- Diversify your life insurance investments with policies from different companies
- Extend your existing life insurance coverage.
- “Stack” multiple policies to obtain the coverage needed
- “Ladder” term life insurance policies.
1. Diversify your life insurance investments with policies from different companies:
Some individuals want to make sure they’re covered no matter what happens with an insurance company, so they purchase policies from different companies. Other people choose to get two policies for different terms while they are young and healthy. One policy for a short term period, and another for either a longer term or a permanent policy.
Option 1 – Two term policies
- Banner $250,000 20-year term policy ($12.94/month)
- AIG $250,000 20-year term policy ($12.95/month)
$500,000 in coverage for 20 years from two policies
Option 2 – One term policy and one permanent
- Lincoln $400,000 20-year term policy ($10.52/month)
- Sagicor $100,000 permanent universal life policy ($42.75)
It is a great idea to mix term and permanent insurance. One policy protects your children until they are grown, and the other policy provides cash for your legacy.
2. Extend your existing life insurance coverage:
If you have a term life insurance policy that is nearing expiration, you may want to extend your policy with a new one. There is no reason why you cannot have two policies at the same time.
You may find yourself with one year left on a 10-year $200,000 term policy and want to start a new 10-year 200,000 term policy.
It can be difficult when applying for a policy that is meant to “replace” one you already have. It involves quite a bit of extra paperwork because the new insurance company is tasked with canceling the old policy. It is easier to get the new policy and cancel the old one yourself.
3. “Stack” multiple policies to obtain the coverage needed:
Some insurers may be looking for a specific amount of coverage, but may not qualify for the amount they need from a single company. They may instead choose to “stack” policies to get to their desired level of coverage. We see this most often with Guaranteed Acceptance policies because they have lower coverage limits.
If you need $90,000 in life insurance coverage you can stack:
- $25,000 on an AIG policy,
- $25,000 on a Gerber policy, and
- $40,000 on a Great Western policy.
The stacked guaranteed acceptance policy strategy can be beneficial for the following situations:
- For divorces, stacked guaranteed acceptance policies can guarantee child support payments in the event the individual pass away.
- Business owners can stack guaranteed acceptance policies to help secure small business loans, fund buy-sell agreements, and protect their interests in their company.
- You can stack guaranteed acceptance policies to make sure there is plenty of money available to cover your final expenses when you pass away.
4. “Ladder” multiple term life insurance policies:
Similar to stacking, you can also “ladder” a collection of term life insurance policies, with coverage that decreases over time, to affordably reach your desired coverage goal. We see this when families have multiple children. As each child reaches age 21, they lower their total life insurance coverage amount.
Here’s one way you could ladder your policies over a 30-year period
- A $500,000 policy with a 10-year term
- A $250,000 policy with a 20-year term
- A $250,000 policy with a 30-year term
How much life insurance coverage can you combine?
The limitation is the maximum amount of insurance you are allowed, based on your financial situation.
Most insurance companies determine how much you can have in total based on your income. This is why insurance applications ask whether you own additional life insurance policies.
The below table is an estimate of the maximum amount of life insurance a person and have.
|Your age||Maximum available|
|66 or older||5x|
How can you figure out the best strategy for having multiple life insurance policies?
If you’re still not sure how you can make multiple life insurance policies work for your situation, reach out to a knowledgeable life insurance agent here at True Blue! Our agents have the know-how to help you find the policies that will best fit your needs.
Because it is difficult to request multiple policies on our quote comparison engine, let us do the work for you!
Give us a call: (866) 816-2100
Accelerated death benefits, sometimes called “living benefits,” speed up the payout of your life insurance policy, tax-free. This allows you to access benefits via a rider if you are deemed either terminally, critically, or chronically ill.
They’re called “living benefits” because they are benefits you can get while you are still alive.
It is a hard comparison to make, though some compare these riders to long term care and disability policies.
Types of Accelerated Death Benefit Riders
Here’s what you need to know about each type of accelerated death benefit rider:
*Requirements to initiate these riders may vary by insurer.
1. Terminal Illness Rider
For a time, terminally ill people were selling their life insurance policies in “viatical settlements” for pennies on the dollar. It was awful for people to essentially give away their life insurance policies in order to pay for medical bills or end of life activities.
The good news is that insurance companies are required by law to include a terminal illness rider free of charge to every life insurance policy they sell.
The terminal illness rider, also known as an accelerated death benefit (ADB) rider, lets you withdraw up to 75% of your death benefits if you are diagnosed with less than 12 or 24 months to live.* You are also required to show proof of diagnosis from a doctor before you can receive accelerated benefits.
*Exact terms vary by companies and products. The amount available to withdraw can range from 25% – 90%. Most companies enact this rider when the insured has less than 12 months to live, while others like American National allow for 24 months.
2. Critical Illness Rider
A critical illness rider allows you to withdraw from your life insurance death benefit to cover medical expenses in certain instances. Depending on the policy, you can withdraw up to 100% of the policy or up to a maximum amount, such as $250,000.
The list of eligible illnesses vary by company, though normally consist of:
- Cancer (Life-threatening)
- Heart Attack (Myocardial Infarction)
- Stroke (Cerebrovascular accident)
- Renal Failure
- Amyotrophic Lateral Sclerosis (ALS)
- Loss of 2 or More Limbs
- Major Organ Transplants
The insurance company typically requires proof from a doctor of medicine who is duly qualified, licensed in the US, and performing in the scope of his/her license. The insurance company reserves the right to request a second opinion when needed.
There are some exclusions to this if the cause of the illness is from attempted suicide, self-inflicted injury, misuse of drugs, or involvement in illegal activity.
This rider acts separately from your health insurance policy and can be invaluable in saving your life and avoiding huge financial bills.
3. Chronic Illness Rider
A chronic illness rider provides the insured to withdraw from his/her life insurance death benefit under two conditions.
1. The insured is unable to perform at least two of the following six “activities for daily life:”
- Dressing yourself
- Using the toilet
- Moving around
This means you cannot perform at least two of the above without substantial assistance from another person.
2. The insured requires substantial supervision by another person because of severe cognitive impairment.
Insurance companies typically allow you to withdraw up to 90% of the death benefit amount for chronic illness, though the fine print varies greatly depending on the company. Many companies put a maximum allowable amount of withdrawals, and the withdrawals are typically calculated on a per diem basis to cover the costs of medical care.
How Do Accelerated Death Benefits Pay Out?
Consider this example:
Once, we had a client with pancreatic cancer that was diagnosed with 16-24 months to live. He contacted us wanting to know if we knew of anyone that may want to purchase his policy. He had an offer from a company to purchase his $500,000 policy for $175,000; potentially losing $325,000 of his total benefit in the process. Thankfully, we informed him that American National provides a terminal illness rider that allows him to withdraw his full $500,000 in coverage if he wanted to.
Exploring his options for accelerated death benefits wound up saving him, and his beneficiaries, $325,000.
Most companies have accelerated death benefit riders you can purchase. There are also some that provide the riders free of charge.
For quotes from companies that include living benefits at no additional cost, visit our Living Benefits Life Insurance Quoter.
If you have questions about accelerated death benefits, feel free to reach out to True Blue Life Insurance at one of the links below.
How are no medical exam policies different?
The only difference is the maximum coverage amount available. There is no difference in how and when the insurance provider pays the death benefit or any additional features the policy may provide.
Is there a cost difference?
Only for about 5% of people, those that are super healthy.
Most individuals who choose a no medical exam policy are approved at Preferred and Standard health classes, which translates to healthy and average health.
If you think you qualify for the Preferred Plus health class, or in other words, exceptional health, you could save money by taking a medical exam.
When is a no exam policy a great fit?
- If you need less than $500,000 of coverage.
Most no exam policies max out at $500,000. There are a few that go up to one million.
- If you need a life insurance policy immediately.
No exam policies typically get approved in 1 – 10 days. Compared to 4 – 8 weeks for policies that have an exam.
- You’re too busy to use the traditional life insurance process.
Applications are done over the phone. Signatures are collected digitally. If you have 20 – 40 minutes, that is all that is required to complete the process.
- You have a fear of needles.
Nobody likes needles. Some people really don’t like needles.
- If you haven’t been to a doctor in a long time (over three years).
Undergoing a medical exam poses the risk of revealing unknown medical conditions. If you haven’t seen a doctor for a while we recommend you first secure a no medical exam policy. This way you avoid surprises that can increase your rates or cause uninsurability.
How Long Does it Take to Get a No Medical Exam Policy?
Depending on the company as well as your health, approval time is anywhere from instantly to 30 days.
While there is no medical exam involved, insurance providers rely on public records to determine your health.
If you’re not certain if an instant approval company would be the right choice for you or not, we’re here to help. We know all the differences between companies, and can recommend the ideal company based on your needs.
|Instantly||Some policies we offer are instant approval, though these are typically more expensive because they only have a single health class for everyone.|
|1-4 days||If you have few health minor conditions that are well controlled and are taking 2 or fewer medications, then you are looking at 1 – 4 days.|
|5-14 days||If you have a few health conditions and are taking more than 2 or more medications, then this can extend the timeframe to 5 – 14 days.|
|14-30 days||If you have recent health conditions you are being treated for then someone at the insurance company (an underwriter) reviews your application and may order medical records from the doctors you have seen. This can extend the timeframe to 14 – 30 days.|
If I don’t take a medical exam, how do they determine my premium?
The insurance companies can pull four main reports when you apply for a policy.
|Pharmacy Report||This report contains every prescription medication you have been prescribed over the last 10 years.|
|MIB Report||The Medical Information Bureau report includes any previous life insurance applications. If you have been declined by another company this will show up.|
|Motor Vehicle Records||Life insurance companies can see information about past tickets, DUI’s, and warrants.|
|LexisNexis||Some insurance companies, also use LexisNexis to crosscheck your financial and criminal history. They can see credit scores, any bankruptcies, short sales, foreclosures, tax liens, late payments, and residential history.|
What is the process to get a no exam policy?
Getting a no medical exam term life insurance policy is simple, and depending on the company you apply with, the entire process typically only takes an hour or less.
1. Get an Instant Quote:
Run a free and anonymous quote on our comparison engine. We compare the rates from over 40 different top-rated life insurance companies.
2. Choose a policy
We provide prices, reviews, features of the policies, and a health questionnaire that takes into account the questions and guidelines of every company we represent. Don’t worry if you are not 100% sure. We verify your information and make sure you choose the best company. Or just give us a call.
3. Complete the application online or over the phone with an agent:
After you choose a policy you can either request for an agent to call you and take your application, or you can complete the application online.
4. Confirm your identity and sign the application:
Law requires that we need to briefly speak with you over the phone to confirm that it is you submitting the application.
5. Let us handle getting your policy approved
From here we take over. We check on the status of your application daily and answer any questions the company needs to clarify. We act on your behalf to get you approved at the lowest premium possible. It typically takes 2 – 10 days for us to get you the policy to you.
Let True Blue do the heavy lifting
Do you like the sound of everything a no medical exam term life insurance policy has to offer, but you don’t feel like doing the shopping and comparing yourself?
We’re here to make the entire process a breeze. Have us shop for you and present you with options at no-cost and no-obligation.
Not the online type? Give us a call. We are here to help make getting life insurance easy for you. 866-816-2100
Expect the process to take 3-6 weeks on average; however, products like no medical exam life insurance, instant issue life insurance, and guaranteed issue life insurance are quicker but carry a higher premium when compared with a traditionally underwritten life insurance policy.
Obtaining life insurance can be a notoriously long process — so much so that more than 18 million give up before the process is over. When you review the figures, this consumer apprehension starts to make sense. The average life insurance application can take 3-8 weeks to complete. That’s longer than it usually takes to get a driver’s license or receive mail from around the globe. It can even be longer than the process to get a U.S. passport.
If you’re in the insurance market and you’d like to get a better idea of how long your application might take (and learn what the insurer is doing while you wait), following our step-by-step walk-through will help you better understand the life insurance application process.
The Life Insurance Application Journey, One Step at a Time
Step 1: How Much Coverage Do You Need?
The first step is defining how much insurance you need.
At a bare minimum, True Blue recommends that you have enough coverage to pay off your current debt. However, selecting an amount that covers your long-term debt AND covers 5 years of your income is a much better plan.
Once you’ve decided how much you will need, you can run a quote through True Blue’s life insurance quote engine. No personal contact information is required, and you’ll get a rough estimate of what a policy will cost you. If you want a more detailed and accurate quote, we recommend taking our General Health Questionnaire. Not only will that give you the most accurate life insurance quote but it will also match you with the best life insurance companies and policies if you have some blemishes on your medical history.
Step 2: Filling Out the Application
After you select an insurer, you’ll be asked to fill out your application form. Expect to answer questions about your lifestyle, activities, and occupation. Some questions might feel intrusive or personal — but these are standard questions that pretty much all insurers ask. In most cases, applications take less than 30 minutes to complete, and most are done electronically, which helps save time and paper.
Obviously, the sooner you fill out your application, the sooner you can expect a decision. Whether you submit it by email or fax or you drop it off in person, try to do so within 24 to 48 hours.
Step 3: The Life Insurance Underwriters and Medical Exam
The insurance company will review your application and decide whether to continue with the application process. If the process moves forward, you’ll have a phone interview during which you’ll need to answer basic medical and lifestyle questions. If your answers are to the insurer’s satisfaction, a paramedical exam will be scheduled (if the policy requires one).
Expect to wait a week or two for the exam to be scheduled. Usually, you have the option of requesting that it be done in your home or office, but some insurers might require you to go to their exam center. A blood sample and possibly a urine sample will be taken, along with the same basic vitals that would be taken at a doctor’s office. You’ll also be asked to answer basic medical questions (again) and have your height and weight measured. It shouldn’t take more than about half an hour.
After the exam, there could be a somewhat lengthy waiting period, depending on your medical history and the amount of life insurance coverage you are seeking. The insurer will be waiting for the medical lab to process and send your results, which could take anywhere from a few days to three weeks.
Step 4: Additional Information May Be Needed
If the exam reveals any additional health conditions, the insurer may ask your doctor or hospital for an Attending Physician Statement (APS). This document is fairly expensive to request, so insurers typically only rely on it if they’re giving an application an unusually close examination. Should the insurance company take this extra step, you can add another three to five weeks to the time it will take for your application to be processed.
Whether the insurer requests additional medical records or is satisfied with the exam results, the final step is underwriting.
At this point, the insurance company’s underwriters will conduct an actuarial analysis, in which they’ll calculate your medical and lifestyle risks, and then decide how to price your premiums — or determine that you’re too risky to cover. You may also receive some follow-up calls from the insurer to discuss particulars of any risk factor or a medical condition you reported.
Step 5: The Policy Is Issued
Seven to 10 business days later, assuming everything goes as planned, you’ll receive coverage.
Get Coverage Today.
Our Agents Are Experts in Getting The Best Price Possible.
No Medical Exam Life Insurance Policies
No exam life insurance policies are best for people who want a much quicker approval process. As the name implies, these policies don’t require a medical exam. But, you can still expect there to be a review of medical and other records, as well as questions about your overall health.
There is a downside to no exam life insurance policies. Insurance companies typically charge a considerable amount more for them — from 10 to 20 percent more, in some cases.
In addition, you will need to be in good physical health to qualify. As noted earlier, you will have to answer a series of medical questions. The insurer can verify your responses by assessing your Medical Information Bureau report, along with pharmacy records and information from the motor vehicle department.
No medical exam life insurance is best reserved for those in good health who can’t wait for the full life insurance application process, for people who haven’t visited a physician in many years, or for those with a severe aversion to needles.
Additional Factors That Can Affect Your Application Processing Time
We can guarantee that the application process won’t take forever, but it does vary from one person to the next and can be unpredictable. We’ve listed a number of factors that can affect your wait time.
If the insurer requests a credit check, that could delay your application. The reason for a credit check can vary, but usually, it occurs when there’s been a recent financial event, like a bankruptcy. Expect another week or more for full processing.
Applicants who request high-dollar policies will be scrutinized much more carefully than average. Expect a significantly longer waiting period (and possibly more paperwork) if you’re seeking a policy with a high payout.
Specialty policies, such as indexed universal life insurance and cash value life insurance, will be considered with extra scrutiny. Instant issue and guaranteed issue life insurance are the easiest/quickest to get, followed by guaranteed universal life.
Age is a big factor in life insurance, for exactly the reason you expect life expectancy. Typically, the older you are, the longer you’ll wait for a decision. Insurance providers use extra caution when considering applicants of advanced age. But, term life insurance and plans created specifically for seniors are readily available.
Medical records requests
A request for medical records can take a substantial amount of time, so it’s a good idea to call your doctor’s office in advance of a medical records request. That way, they’ll be prepared if the insurer makes such a request. By the way, there’s no cost to you for this — the life insurance company will pay any applicable costs.
Omissions in your risk disclosures
You might be tempted not to disclose any significant chronic health problems you have, but this is not advisable. One reason is that the life insurance company will spend a lot of time and resources verifying the information in your application. For instance, it might peek at your social media accounts. It will probably also check to see if any procedures you’ve had were related to a risk factor, such as a disease or a dangerous hobby. Another reason is that the consequences for lying on your application, called “material misrepresentation,” are not light. You can be denied coverage during the application process, or if your insurer discovers untruths after you’ve been granted coverage, your premiums may be increased, your policy’s death benefit may be reduced, or your coverage could be discontinued.
Know What You Need, and Keep All Parties Accountable
Countless factors can play into how long it takes to process your application, and many of them are beyond your control. Assessing your needs from the beginning is the best bet to ensure that you’ve made the right choice. After that, all that’s left is to keep track of the various parties involved in your application and gently nudge them if they fall into a holding pattern.
Having a proactive agent will help minimize the time and stress involved in getting the life insurance you need. Properly educated agents know exactly what’s needed and how to make the process quicker, so they can get you the coverage you need in less time. Finding an agent who’s focused more on service and less on the commission to be earned will help make the life insurance application process easy and carefree.
In this challenging economy, the typical worker who is employed by a medium to large-sized corporation and receives full benefits is certainly not the norm as it was 10 or 20 years ago. That group is shrinking and an increasing number of Americans are now working part-time, starting their own businesses or are unemployed. These three scenarios share at least one thing in common—they offer few to no company benefits.
As a result, part-time workers, business owners and those unemployed look to outside insurance companies to purchase the minimal medical and dental coverage they need for themselves and their family members. While that is a good start, there is another coverage that is often overlooked by people when purchasing benefits on their own — life insurance. Or for those who do work for companies that provide life insurance coverage, it is often not enough to fully cover their family’s expenses should they die prematurely.
To assist you in understanding how life insurance works and tips on how to purchase it, check out a Guide to life insurance types. This guide helps answer some basic questions you may have regarding life insurance.
Why Is It Important?
Because a life insurance premium payment has to compete against more obvious monthly expenses like housing, food and transportation, it’s important to understand why purchasing life insurance is a priority or it will continue to sit on the bottom of your to-do list. Some of the reasons people put off buying life insurance is because they view it as a low financial priority, don’t understand how it works or think it is too expensive. Basically, buying a life insurance policy gives your family a financial safety net in the unfortunate event you have an early death. This financial protection gives you peace of mind knowing that if your spouse were to lose your regular salary, he or she would be able to pay for the funeral costs and monthly expenses. Depending on the coverage you select, the death benefit can also help pay off remaining debt, medical bills and in some cases, fund college tuition for your children. No one wants to add a financial burden to their grieving spouse when the reality sets in that they are left with the same expenses but half to all of their regular income now gone.
What Is Universal Life Insurance?
Now that you know why you need life insurance, there are two types to choose from. The first type is called a universal life insurance plan, also known as a cash-value or permanent insurance. This type of insurance combines a death benefit with a savings or cash value benefit and is effective over your entire lifetime. You accumulate savings, which is reinvested and grows tax-deferred, during the life of the policy and the savings is available to use in the future or to borrow against if needed. However, you are penalized if you terminate the contract earlier than its full term and the value of the policy is reduced as you age. When you are younger, more cash is diverted into the savings part of the plan and as you age, less goes into savings and more goes toward the purchase of the insurance. While this might not be the best choice for the average consumer, it can be a good option for those looking for a tax-deferred plan and don’t mind the additional costs that are included.
What Is Term Life Insurance?
Term life insurance is a policy that is set for a certain length of time. For example, a husband and wife in their early 30s with young children might want to purchase a 20-year term life policy to provide financial security for the remaining spouse and children (while still at home) should the other spouse die prematurely. The cost of the policy is low since they are relatively young when they purchase it and as long as they keep up their monthly premiums, they will have coverage until it expires. Many term life policies also provide a feature you can add called Return of Premium that reimburses you all the premiums you paid into the policy should you live until it expires. The term insurance policy of today still remains an affordable cost for most age groups and only requires you to fill out a questionnaire and participate in a general health exam. It’s easy, simple and the approval process goes relatively fast.
Tips On Purchasing Life Insurance
Whether you decide to purchase a universal life insurance policy or the popular term life type, here are some things to keep in mind:
- Whether you work part-time or full-time, check with your current employer to find out what, if any, life insurance the company provides and then order a separate supplemental policy should the amount be less than what your family would need for after-death expenses. It is a good idea to have a private policy of some type anyway in the event you suddenly lose your job—that way your family has coverage at all times.
- Save yourself time by working with an independent insurance broker like True Blue Life Insurance. They represent many of the country’s top insurance companies and help consumers save time and money by giving them online information to help them to compare companies and policies.
- Be sure to purchase enough coverage for your family, about five times your annual income is normally recommended but adjust accordingly.
- Look beyond rates when deciding what company to go with for your insurance plan. You want to choose a reliable company that has been in the business awhile and has a good insurance rating. Do a comparison of at least two to three companies and compare each death benefit to the monthly premium.
- Evaluate your policy each time you have major life change such as having or adopting a child, changing jobs, caring for an elderly parent, getting married or divorced, starting a new business or experiencing a major illness, disability or death in the family.
- Remember to never cancel a life insurance policy unless you have another one lined up so there is no lapse in coverage. Call your insurance agent or broker to confirm that you have coverage up until the time you start a new policy.
10 Things to Know About Buying Life Insurance
1. There are essentially two types of policies.
You can consider purchasing a term policy, otherwise known as pure insurance coverage, or you can go with one of many types of whole-life policies, which combine an investment product with a pure term life insurance policy to build cash value. You will need to determine which of the two is right for you.
2. Insurance is something that is sold, not something that is bought.
Agents sell the vast majority of life insurance policies written in the U.S. because the life insurance industry has a vested interest in pushing high-commission (and high-profit) whole-life policies. Consider what’s in it for you, not your agent, when you’re looking at which policy to purchase.
3. Whole life policies can be more expensive.
A whole life insurance policy that has an investment component added in can cost many times more than a simple term policy. The risk with this is that many people who purchase these types of policies often buy less coverage than what they need because of the cost. This can leave them underinsured.
4. Whole-life policies are built on assumptions.
Agents have to base the returns they quote you on guesses, not reality. In order to attract buyers, these guesses can err on the higher side. Remember that the quotes with whole life policies are not a guarantee of return.
5. You should keep your investing and insurance separate.
There are many other places to invest your money that will not cost you the high commission prices of whole-life policies. You are better off focusing on a term policy and exploring completely separate ways of investing in other income.
6. Make sure you purchase enough coverage to suit your needs in the future.
Because low rates make life insurance very affordable, this is not the time to skimp on coverage. Assess how much you will need, and don’t short change yourself.
7. Consider what the term of the policy should be.
Your policy should be sure to cover your dependents when they need it most — before they are on their own. Also, consider when your retirement will be kicking in before you determine your term.
8. Buy when you are healthy.
An older person or one who’s not in the best health will pay much higher rates than someone younger or in good health. Buy your policy as early as you can, but it’s not necessary to buy until after you have dependents.
9. Be honest.
Lying on your application to try to get a lower rate is not a good idea. If a large claim is made, the insurance company will surely investigate the facts before paying. Better to be upfront than to risk having surprises discovered when it’s too late.
10. The internet is your friend.
Buying life insurance online couldn’t be easier, or faster. You can shop anytime and review dozens of life insurance quotes and polices, all while avoiding the pressure of pushy salespeople.
Four Reasons People Buy Life Insurance
What turns a life insurance shopper into a life insurance buyer? In today’s blog post, we focus on the top four reasons people go from shopping for life insurance to purchasing a policy for their family.
Let’s start with the shopping process. Perhaps our readers can identify with one of these top reasons why people shop for life insurance.
- 41% of life insurance shoppers said life events (getting married, having or adopting a child, or buying a home) prompted them to shop for life insurance.
- A quarter of life insurance shoppers considered life insurance because their financial advisor or sales rep initiated contact or suggested the need for life insurance.
- 25% of life insurance shoppers looked at buying life insurance because they thought they might need more and wanted to review their coverage.
- One in eight life insurance shoppers said a friend or family member recommended a sales rep or financial advisor, prompting them to shop for life insurance.
So, what turns a life insurance shopper into a buyer? These top four reasons are why people decide to purchase life insurance.
- 78% of shoppers with previous relationships with their sales rep bought life insurance – almost 10 percentage points higher than shoppers who had no prior relationship with their sales rep.
- Providing a needs-based analysis to customers helps them understand how life insurance can work for them and their families. Three-quarters of shoppers who received a needs analysis bought life insurance, compared with less than half of those who didn’t have a needs analysis.
- Shoppers more likely to buy life insurance — and larger policies — after getting a recommendation from their sales rep.
- 35% of non-buyers said they were still shopping and the sales reps should have followed up with them; one-third were still making a decision.
Finding a reputable and honest life insurance agent can be hard. At True Blue Life Insurance, we are focused on providing the best life insurance quotes for our customers. We don’t believe that purchasing life insurance should be a high-pressure process.
Checklist for Buying Life Insurance
A good agent will ask you about the following information when assessing your need for life insurance:
- Financial situation
What level of daily expenses are you currently comfortable with? This makes a huge difference in how much money your life insurance policy should provide in the event of a payout.
- Long-term goals
Do you want to gather wealth through your life insurance policy, or do you have other retirement methods for the long term? This is a major factor between permanent life insurance and term life insurance policies.
Do you currently have children? If so, how many? Ultimately, your dependents are the beneficiaries of your life insurance. If your children are grown, then it might be your spouse. Or, perhaps the payout will be used to help cover your burial expenses.
There are many more questions that a life insurance agent will ask you, but these are three basic points that make a big difference in the type and volume of life insurance you purchase.
Preparing for Your Life Insurance Medical Exam
After you’ve applied for a life insurance policy that requires a medical exam, you’ll be asked to schedule the exam. This medical exam can make a difference in your monthly premium, so you’ll want to do everything you can to make sure the exam comes out as good as possible.
First of all, please know that there is no way to change your entire medical history or improve your health in just a few weeks. We do not condone partaking in any risky miracle diets or trying some crazy herbal remedies in an effort to improve your medical exam. Instead, we’ve put together a shortlist of tips that can keep your medical exam from showing poor results that are not warranted. A nervous mind can cause increased blood pressure and affect your vitals in negative ways. So, use these tips to keep yourself from bombing the medical exam.
- Don’t lie to the medical examiner. If you lie, it could result in the loss of your policy, even after years of paying the premiums!
- Do the medical exam in your own home. This will help limit the amount of stress you experience because you’ll be more comfortable at home.
- Wear a short-sleeved garment. This will make rolling up your sleeves much easier when the examiner needs to take your blood pressure.
- Avoid tobacco and alcohol. We’d really like for you not to smoke or drink at all, but we know that some people will. So, please try to avoid these for a least a few days before the exam.
- Schedule the exam in the morning. We say this because it’s likely that you will have to fast for 8 hours before the exam.
- Avoid taking the exam during the holidays. The holiday seasons can be stressful for some people, and an eating binge can have a negative effect on your blood pressure readings.
The Best Way to Buy Life Insurance
To many people, the process of buying life insurance may seem like a daunting task. However, once you understand the basics of life insurance and understand your own personal goals, the process becomes simpler. Here are some key things to keep in mind:
- If an agent is pushing a policy on you, walk away. Honest agents make recommendations and allow you to make the choice. Unethical agents try to guilt you and push you into a policy they think is best.
- Determine the long-term strategy. Are you looking to “own” a life insurance policy (permanent) and use it as an asset? Or, are you looking to “rent” a life insurance policy (term) and invest money in other areas?
- Stick with what you can afford. Most insurance policies either lapse or are surrendered because people don’t keep up with the payments. Choose a policy you can afford right now and down the road. You can always buy more life insurance later if needed.
- If you don’t want to take a medical exam, apply for a no-exam life insurance policy. It may cost slightly more, but you don’t have to deal with the hassle of physicals and blood draws.
- Always use independent agents. Independent agents represent numerous companies and can find the policy that best suits your needs, unlike some “branded” insurance agents, who only sell one company’s product and often have high quotas to meet. Going independent helps you make a better choice all around.
Buying life insurance doesn’t have to be hard. With the advances in technology, you don’t even have to talk more than 10 minutes with an agent. And, in some cases, policies can be issued instantly. The best way to prevent confusion and ensure transparency is to be informed first and discuss life insurance options with someone you trust.
It was Daniel DeFoe, best known for his novel, Robinson Crusoe, who wrote in another work, The Political History of the Devil, published in 1726: “Things as certain as death and taxes, can be more firmly believed.” Sixty-three years later, Benjamin Franklin wrote in a similar vein, in a letter to a friend in France, “In this world, nothing can be said to be certain, except death and taxes.”
What, you may wonder, does this have to do with the benefits of life insurance? Everything, really, as a well-customized term life insurance policy is one of the few truly effective things that will take care of any financial issues associated with your death and the considerable taxes that may also be due. You can’t avoid death and taxes, but you can mitigate their effects. You need life insurance, and you’ll also love all the many benefits it can bring you and your family.
Life Insurance Benefit #1
Funeral costs have risen over the years to become a quite considerable, but necessary, expense. Without insurance coverage in place, the entire funeral costs fall to the family to find. At the time of writing, the average traditional funeral can cost between $8,000 and $10,000, a very significant amount, especially if money is tight. When you add to that the possibility that the person who has died was the main breadwinner, the lack of a life insurance policy can bite hard.
With proper life insurance coverage in place, your family will have peace of mind and no financial worries to think about. They will, of course, have their grief at your loss to concern them, but no insurance policy can cover that adequately. They will, however, be able to grieve naturally, without having to worry about the cost of the funeral, and if you were the main breadwinner for the family, they can be properly looked after financially too when you are gone, all thanks to your life insurance policy.
Life Insurance Benefit #2
If your house is mortgaged and you are the main breadwinner, your family would most likely find it very hard to make the monthly mortgage payments if you die. This could result in them losing the family home if things got worse and the bank foreclosed. A well-structured life insurance policy could take care of that issue for your family, giving everyone peace of mind and greater security.
Upon the death of the insured person, if that is you, the insurance company will cover all the necessary financial debts. There will be no surprise bills for your family, no wondering how they will find the money with all the worry that can cause. A death in the family is a stressful enough time, and while there are many things the family will have to pay, estate taxes, funeral costs, etc, your life insurance policy will take care of it all with the minimum of fuss.
Life Insurance Benefit #3
Your term life insurance policy doesn’t have to be just for covering things after you die. With living benefits, it can also cover expenses should you have a serious illness – even a terminal illness – or an accident that prevents you from working. Medical expenses piled on top of the loss of earning can amount to a considerable sum, so it’s peace of mind once again to know this can be adequately covered by what can effectively be a kind of health insurance policy.
Life insurance policies can be structured to provide a kind of education plan for your children. It can kick in when your child reaches 18 and enrolls in college. All the many expenses associated with higher education can be met, and should you die unexpectedly while your child is still young, the money already paid into the policy can still be paid out by the life insurance company to be used to help offset education costs.
The Secret Behind The Benefits Of Life Insurance
Compound interest is the secret to how life insurance works. You pay the insurance company a monthly premium, which they then invest over a period of time. In general, the longer the period of time involved and the more the amount of money that can be accumulated, the cheaper the insurance policy will be for you. The idea is that when you as the insured person dies, the insurance company pays back to your beneficiaries a portion of the money they have accumulated from you while keeping back some of it for themselves.
The cost of your life insurance policy depends on several things. In general, the easier it is for the insurance company to perform this service for you, the cheaper it will be for you. The interest rate and the time involved are the two main things that determine how fast and by how much your money grows. The longer you have to pay into your life insurance policy, the better it will be. Starting early allows compound interest to do its magic much more effectively.
Compound interest takes time to become really effective. It is in the final years of your policy’s maturing that the greatest effects are seen. This is when a large amount of annual interest is added to the principal sum (which after 20 or 30 years of regular payments has become a significant amount) to generate even more interest, and the snowball effect comes into play in a very noticeable and impressive way. Albert Einstein understood all the mysterious factors at play when he said, “Compound interest is the eighth wonder of the world. He who understands it earns it … he who doesn’t … pays it.”
Purchasing a life insurance policy to provide a safety net for remaining family members in the event of a wage earner’s untimely death makes good financial sense. Just like purchasing insurance for home and auto, life insurance provides peace of mind in the event of a tragedy. However, unlike home and auto insurance, the consumer not only has to decide how much life coverage to purchase, but what type of life insurance? And what exactly are the differences in universal life insurance vs. term life insurance?
Understanding Term Life Insurance (Temporary Life Insurance)
Term life insurance is the more popular of the two and is purchased for a specific period of time—typically at 10, 20 or 30-year increments. Some people choose annual increments called an annual renewable term, which usually comes with a premium increase each year. Term life is a simple and affordable option that works best for those with specific short term goals. The younger the person is who purchases the policy, the less expensive it will be and the monthly premium will never increase during its term. However, if even one monthly payment is missed, the policy will terminate.
Term life works especially well for a single or married parent who wants money available for their children in the event they pass on while they are of school age. Depending on the parent’s age when purchasing the policy, the parent can select a time period that would last until their children are of adult age, graduate from college or when their mortgage is paid off, for example. A married couple with no children could purchase a term life policy that would extend until each other’s retirement benefits kick in. This insurance is best when a specific goal is in mind and the purchaser can take advantage of buying the policy when they are younger and in good health. If they wish to continue the policy after the term has ended, they would need to renew the policy for another time period but it would be at a higher price and the application could possibly be rejected if the purchaser was in poor health.
Understanding Universal Life Insurance (Permanent Life Insurance)
A form of permanent life insurance, known as universal life insurance, differs from term life in that it offers an investment component. Premiums are higher than those of term life but the policy is intended to be permanent and provide coverage over a person’s lifetime –up until 100 years old or as much as 120 years old. There is no need for additional medical exams down the road or worry of renewing the policy at a higher rate when older. People who purchase permanent life insurance usually do so because of the investment and savings components they can build into it.
While a typical universal policy may cost thousands of dollars a year at first, the cost goes down as each year passes and at a certain point, there are no premiums and the policy holder can choose to keep the policy intact until their death where the cash value would go to their designated beneficiaries or terminate the policy at some time and receive a cash payout for the current value of the policy. As the tax-deferred funds add up, the policy owner can borrow against the funds, cash some out or use the accumulated funds to pay monthly premiums.
In summary, the biggest advantage to purchasing a term life insurance policy is that it is simple to understand and has low monthly premiums as compared to a universal policy. It covers a specific time period to meet certain short-term financial coverage goals. The downside is there is a definite end date and should the policy owner decide to extend the time, he or she will have to reapply at a higher premium rate and pass a current medical exam. In contrast, the advantage to a universal policy is that the person is covered for their lifetime and while the monthly premiums are higher than term life, a portion of the premium are being invested for them and are available in the future to cash out or borrow against. When the person eventually passes on, both the cash value of the policy and the life insurance payout will be given to their beneficiaries. The downside is the premiums are more costly and the policy does not offer a lot of flexibility should the policy owner want to increase or decrease the amount in the future. Also, the rate of interest earned on the policy may be less than other investment options the person could find on their own.
After making a decision on what type of life insurance to purchase, the purchaser will need to decide on the amount of coverage. When doing their comparison of life insurance companies, the purchaser can work with each company’s representative to determine the best amount of coverage needed based on their financial goals and the type of policy they selected.
As the insurance industry moves into the 21st century and technology advancements provide people with more access to information, the way life insurance applications are being reviewed and approved is also changing. Life insurance companies, with access to digital data from providers like LexisNexis, are now able to more effectively gather the information they need to make a more accurate decision on life insurance rates and minimize risk in order to help keep life insurance costs low.
Editor’s Note: Per the request of LexisNexis, we have removed the link showing an example of a LexisNexis inspection report.
What Is LexisNexis?
LexisNexis has been around for years, primarily in a law research function, and is a massive data repository and aggregator. They house millions of records across various niches of data, both public and private. As technology and the need for information have grown, LexisNexis has become one of the main players in data analytics and aggregation for industries around the world.
Who Is LexisNexis Risk Solutions?
The arm of LexisNexis that the insurance and financial services industries rely on for information is known as LexisNexis Risk Solutions. This branch of the company is the main source of data that is used to help underwrite a life insurance policy during the “consumer reporting” part of the process.
Who Uses LexisNexis Risk Solutions?
Every major insurance company that states they check a customer’s “consumer report” (which is almost all of them) is primarily using LexisNexis data. Collections, healthcare, government, insurance, finance, corporate HR, and law enforcement all use the aggregated data LexisNexis provides to help mitigate risk and to get a better understanding of the person’s overall digital life. They also provide a “Risk View” score, which is a credit score that ranges from 501 to 900. While it is different than credit scoring models like FICO, many banks use the Risk View score to make credit approval decisions such as auto lenders or credit card companies.”
For the insurance industry, they are given what is called an “Electronic Inspection Report”, which is then used to help classify your potential risk.
What Is On A LexisNexis Report? What Does LexisNexis Background Check Include?
The electronic inspection report shows underwriters the following:
- Criminal Offenses
- Property Ownership
- Professional Licenses
- Weapons License
How Does LexisNexis Get Information?
LexisNexis pulls their data from databases all over the country and assembles the information in one central location, allowing underwriters the ability to learn more about the person’s overall financial standing outside of just a credit report. Federal, state, and county databases provide much of the information housed inside these reports.
Why Does My Credit Affect My Life Insurance?
Underwriters believe there is a correlation between someone’s credit history and an increased probability in that person being a higher risk, both for life insurance as well as other forms of insurance like auto insurance. Because of this, insurance companies are best able to review your information and make decisions based on their perceived level of risk. There are a few companies who opt to not use this information but more are switching to this type of digital underwriting to stay competitive.
Buying life insurance as a senior can be a needlessly difficult and treacherous experience.
Unethical insurance salespeople and agents from less reputable providers prey on seniors over 75, by selling low-quality final expense policies. This is because agents’ commissions are based on a percentage of the first year premiums, in some cases up to 110%. So, their job is to sell these low-quality policies to unsuspecting and vulnerable seniors.
We encourage anyone who is being solicited with these types of policies to contact an independent agent for a second opinion on the policy being offered and to obtain other quotes from higher quality companies before making your final decisions.
Who Are The Best Life Insurance Companies For Seniors?
- AIG American General
- Mutual of Omaha
- Great Western
- United Home Life
- Columbian Life
AIG is an international brand and one of the largest life insurance companies on the market. They write everything from small guaranteed acceptance policies to multi-million dollar life insurance policies for CEOs. Basically, AIG gives customers one of the largest selections of insurance products on the market. Though, AIG’s competitiveness depends largely on the product you select. Their guaranteed life insurance policies tend to be some of the most affordable options for seniors looking for life insurance.
Gerber is probably best known for their “Grow Up Plan,” insurance for children aged 14-days-old and up. But, they also provide a popular, financially strong, Guaranteed Issue policy which is extremely popular for seniors. Their rates are extremely competitive and provide final expense protection at a reasonable cost.
Mutual of Omaha is well-known as one of the most trustworthy big names in life insurance and financial services. For seniors, Mutual of Omaha provides a no-exam, whole life, final expense policy which provides excellent overall coverage.
A relative unknown, Great Western provides a high-quality product for seniors looking for life insurance. This is also coming from one of the most financially secure life insurance companies in the marketplace. On top of life insurance, Great Western also is a leader in the pre-need insurance which is used to cover predetermined funeral expenses and often sold through local funeral homes.
For life insurance customers aged 65 and older, Sagicor offers an excellent, affordable solution. Their term life insurance policies are convertible at age 70 and accelerated death benefits are included at no cost. These benefits provide the lesser of 50%, or $300,000, to the insured if they’re terminal or chronically ill.
Assurity provides a strong life insurance solution with affordability for seniors looking for a life insurance policy. Their guaranteed acceptance life insurance policy is one of the cheapest on the market for those looking for final expense coverage.
Having been around for 100 years helps when life insurance companies, like Americo, want to tout their overall stability. Focusing on annuities, final expense, and mortgage protection; Americo provides multiple options for customers to place themselves in a better position with multiple end-of-life options.
After their acquisition by Nassau RE, Phoenix rebranded itself as one of the major players in the retirement income and final expense marketplace. One of the biggest downsides is that some of their policies terminate when the insured reaches 75. This makes Phoenix’s offering a bad option for those who want long-lasting final expense coverage.
Unite Home Life is a little known company with great options for life insurance for seniors. Their application is simple, they don’t require medical exams, and they issue policies up to age 80. UHL offers great coverage for those diabetics who are insulin dependent or those on disability as well. We highly recommend this policy for those with less than ideal medical histories, who want affordable final expense coverage.
Similar to Great Western, Columbian Life Insurance offers guaranteed issue policies and pre-need coverage on top of some standard type life insurance policies. This company does focus heavily on the permanent life insurance market (whole life and universal life) but also offers standard term policies. Columbian Life tends to be more expensive than some of the other options offered on the market. This is why it’s worth looking at all options available before making a decision to purchase.
What Are The Best Types of Life Insurance For Seniors Based on Age?
Given that many life insurance underwriting standards change during the twilight years, seniors are often left with limited options as they age. While everyone is looking for cheap life insurance, prices for insureds over 60, unfortunately, aren’t cheap. Here’s what we recommend based on your current age:
Best Life Insurance For Seniors Over 60
If you are under 65, we recommend you focus on a standard term life insurance or a no medical exam term life insurance policy. These policies offer you an excellent value and better bang for your buck. However, many companies will stop offering these policies the minute you turn 65.
Best Life Insurance For Seniors Over 65
Once you hit the age of 65, life insurance becomes more expensive and there are fewer options. You may be better off looking into a universal life policy like one from Sagicor. This provides life insurance coverage up to age 121 if you are seeking permanent coverage with a larger dollar amount.
Best Life Insurance For Seniors Over 70
Depending on the amount of coverage you need, life insurance for seniors over 70 becomes more difficult. We see more of a shift to guaranteed issue and other final expense products to help cover some end of life expenses and medical bills.
Best Life Insurance For Seniors Over 75
Once you are in the 75-year-old range, your options for life insurance are even more limited. In most cases, a Gerber Life or Mutual of Omaha guaranteed acceptance policy (or another similar company) may be the best option on the table from a cost perspective.
Best Life Insurance For Seniors Over 80
After you reach age 80, the majority of life insurance companies will no longer extend coverage, even for guaranteed issue. A handful of companies will offer coverage and AIG’s guaranteed issue life insurance generally tends to be the most affordable, coming in 25% cheaper than others in some situations.
Best Life Insurance For Seniors Over 85
To get life insurance at 85, you are left basically one main choice: it’s AIG’s guaranteed issue policy. Mutual of Omaha provides a simplified issue whole life insurance policy (with health questions) that cuts off at 85, but it isn’t a guaranteed acceptance policy. Both companies provide great coverage, but after 85 your options become even more scarce.
What Are You Looking For From Your Life Insurance?
- The cheapest life insurance policy?
- Life insurance with cancer?
- Life insurance with medical issues?
- Life insurance without health questions?
- Life Insurance without a medical exam?
What Is The Cheapest Life Insurance For Seniors?
In almost every case, the cheapest life insurance for seniors is going to be a fully underwritten policy (with medical exam). However, some insurance companies are only willing to cover insureds up to a certain age. In this case, we recommend a guaranteed issue policy, providing guaranteed coverage, with a low death benefit. If you’re still in the workforce, you can consider a group term life insurance policy as well.
In many of these cases, your insurability is going to be based largely on your age when you apply. Some companies stop underwriting traditional policies around 65, leaving seniors with very few options of affordable and cheap life insurance.
What Is The Best Life Insurance For Seniors With Cancer?
Health history plays a huge role in the overall determination process when it comes to seniors finding the best life insurance rates with cancer. While age is a concern for underwriters, a poor health history that includes cancer treatment is another red flag for many insurance companies.
If the cancer treatment happened less than 5-10 years ago, guaranteed issue life insurance is most likely your best option. Final expense life insurance policies like this are designed to cover your burial costs and medical bills. Many also come with “graded benefits,” meaning that death by natural causes is not covered for the first 2-3 years, but accidental death is covered.
Another option to consider if you’ve had a more recent battle with cancer is an accidental death and dismemberment policy. These types of policies only cover death in the event of an accident and have some of the lowest premiums on the market. Insurers usually care less about your health status, as they only pay out the death benefit if you die accidentally.
What Life Insurance Is Best For Seniors With Medical Problems?
Depending on the insured’s age, and the extent of their medical issues, they should consider a company with flexible underwriting regarding health issues. Companies like AIG or United Home Life may offer the best solution. If the medical issues are more severe or there is a more recent history of cancer, guaranteed issue may be the best (or only) option for life insurance. The most important thing is to talk with an independent agent and let them shop around to find the best policy at the best price, given your conditions.
What About Life Insurance For Seniors With No Health Questions?
A guaranteed issue policy is your best option if you don’t want to deal with any health questions. AIG American General offers one of the most affordable guaranteed acceptance policies on the market with no health questions required. We recommend this product for seniors looking for final expense coverage from a financially strong company. Another great company with no medical questions is Gerber Life and is a popular option for many seniors looking for life insurance.
What Is The Best Life Insurance For Seniors With No Medical Exam?
The main options for seniors looking for life insurance but are not wanting to deal with a medical exam is either a no medical exam term life insurance policy (if you qualify based on age and health standing) or a guaranteed issue/ final expense policy. These types of policies don’t require a medical exam, but some may ask health questions and verify that information with your MIB and pharmacy report. Guaranteed issue policies will not ask any health questions, but will often be more expensive to the other options on the table.