If your a senior you may have been running quotes on life insurance and realized how expensive life insurance for the elderly can really be. So in this article I’m going to cover what could be making life insurance so expensive for you and also give you some ways to cut those high cost down.
What Makes Life Insurance For Seniors So Expensive
The first thing that makes life insurance expensive for older people is old age. If you compare the difference in age from someone who is 50 years old to 65 years old the cost is astronomically. For example a 65 year old male looking for a term life policy with a $250,000 death benefit and in good health will pay around $435 a month while a 50 year old male will pay around $88 for the same exact coverage. This also proves the point that starting sooner than later is always a better option.
Next you also need to consider health conditions. This plays a huge role as well. For example, if you’re a male at age 55 looking for $250,000 of term coverage but you only qualify at a standard rating and you’ve been smoking within the last five years you could pay around $150 a month. On the other hand if you were 55 and in great health you would only pay around $70 a month. That’s a difference of $80 a month!
Next you need to consider the type of policy you want. My suggestion has always been to go with term in your older years because it will be much cheaper than a whole life policy or a universal policy. In fact the typical term policy will cost up to 60% less than a whole life policy.
How To Lower Cost For Seniors
Now that we know what makes life insurance expensive for seniors you may be wondering what could you do to make it cheaper. So in this section I’m going to give you a few ideas as how to do just that.
Buy Your Policy Young. First off, buy your policy as young as you can. As I proved in the example above a younger person can save a lot if they buy sooner rather than later.
Get Multiple Quotes. Get as many quotes as you can. Talk to your local life insurance agent but don’t forget about looking online as well. Sites like Insure.com and QuickQuote.com can give you tons of different options in minutes and all from the comfort of your home.
Consider A Term Rider. If you have an existing permanent policy like a whole life or universal life policy you could add a rider. For example on my life insurance policy I have a $300,000 policy but $125,000 is consider base insurance and the other $175,000 is on a term rider that cost far less than the base insurance cost.
Cash In Your Permanent Policy. If you have a universal or whole life policy with a decent amount of money in it you could cut down your premiums by closing the policy and switching to a term policy with a much lower premium. Then you could use the money in the cash value to make the premium payments as well.
Lower Your Term Period. If you already have term policy you could cut down cost by lowering the term period. For example a 60 year old male with a 30 year term policy with $250,000 of coverage will run around $70 a month. However if you would cut it down to a 10 year term policy it would drop your payment to only $25 a month. That’s a cost savings of $45 a month.
Return Of Premium Rider. Finally, if your looking for a term policy you may want to consider getting a return of premium rider with it. This is a rider that will pay back on all premiums paid into the policy minus the cost of any riders you add on and if for any extra cost are implied for impaired risk and health conditions. On top that you can use that money you get back to make premium payments when you go to renew your life insurance policy.
In the end you can can find a cheaper alternative, you just have to be willing to take the time to do the research it requires to find it. If you know of any other ways to cut down on life insurance cost for seniors leave a comment below.