3 smart life insurance moves seniors should consider now
When it comes to protecting your finances, it's never too late (or early) to get started. While you'll generally want to buy the right insurance policies at the right time (and at the right cost) it's often better to be insured and protected versus taking risks you may not be able to afford. That said, each individual's financial situation is different and what may work for one person may not be as beneficial for another.
For seniors, many of whom are reliant upon savings and Social Security, some insurance policies may simply not appear to be worth it. Life insurance is often considered one of those. But, in fact, there are multiple, valid reasons seniors should consider life insurance. And there are effective moves they should consider making now to reap the benefits a robust policy can provide.
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3 smart life insurance moves seniors should consider now
Here are three smart and effective life insurance moves seniors should pursue today.
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As mentioned, life insurance for seniors is too often considered to be worthless. But if you take a closer look at what a policy can cover — everything from end-of-life expenses to outstanding debt to serving as a nest egg for loved ones — it becomes clear that even a minimal policy is valuable. But to determine exactly how valuable life insurance can be for your unique situation will require you to get started. So start shopping around for providers to see what rates and terms you may qualify for. You may be surprised at the potential cost-benefit ratio. You won't be able to get a gauge on a policy, however, until you get started. So don't wait (prices will generally only rise the longer you wait to get a policy).
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Investigate whole life insurance policies
There are two primary life insurance types. Term life insurance does not have a cash value and lasts only for a set period but is often the cheapest option. Whole life insurance, meanwhile, can last for the duration of the insured's life and allows for a cash withdrawal while still alive but can come with a larger price tag.
While the former is often a popular alternative for seniors the latter is also worth investigating, particularly if it can be secured early in the insured's life and, therefore, be relied upon as a cash alternative in the years to come. Plus, you won't have to worry about outliving a policy and thus having paid for a policy you can no longer use. And considering that whole life insurance policies tend to have fixed premiums, the slightly higher cost may be worth it if you're on a structured budget.
Carefully choose your beneficiaries
Whether you ultimately choose a whole or term life insurance policy, you'll want to carefully choose the beneficiaries of a plan. You'll want to avoid listing minor grandchildren, for example, who may not be able to collect any payouts without a custodian or other legal adult as a conduit.
You should also aim to list more than one beneficiary, in case the primary one isn't available to collect your policy when it becomes available. And remember the basics, namely who the policy was designed to help after you have died. It can be tempting to list multiple people on a plan at the same time but the ones on top of the list should be the primary ones you want to provide for in your absence.
The bottom line
Despite the conventional wisdom, life insurance can be valuable for seniors as well as many other age groups. For seniors, however, their approach may have to be slightly different in order to make the policy cost-effective and reliable. So get started by shopping around for policies and providers to establish a baseline understanding of what's available. And don't be afraid to shop for both term and whole policies, the latter of which may be more advantageous than you initially expected. Finally, be careful when choosing your beneficiaries to avoid any hiccups in disbursement after you have died.
