Don’t Cancel That Policy Yet! 10 Benefits of Life Insurance for Seniors Over 65

Are you ready to die? Not emotionally, but financially?

Most people buy life insurance to secure the financial future of their family members. Some do not plan for it, but they get a policy from their employer as part of the benefits. So, what happens when you are a retired senior?

Majority of the people are not sure if life insurance for seniors over 65 is worthwhile. At such an age, your children may already be independent and raising their families on their own. You may also not have an employer to continue paying the premiums for you.

The thought of having a pension might prompt you to drop your life insurance policy. However, your age and health status can make you less productive and diminish your chances of earning an income. This puts uncertainties about your financial future. The following are:

Ten reasons why life insurance for seniors over 65 remains a valid investment

Keep on reading!

1. 1 Financial Security for the Family

Family members who earn spend most of their income to sustain their living standards. Couples are usually responsible for the financial well-being of their families. If one of the spouses dies, the household can get into an urgent need for money and suffer lasting financial implications.

The most popular role of life insurance is to cushion the family from the loss of income when a breadwinner passes away. There are different types of life insurance policies, and each comes with its advantages.

Seniors who still have dependents should continue with their life insurance policies for the interests of their loved ones. Primarily, the beneficiaries receive a death benefit when the policyholder dies.

2. 2 High Life Expectancy

According to the US Social Security Administration, life expectancy for Americans stands at 84.3 and 86.7 years for men and women respectively. 25 percent of today’s seniors will live past 90, and 10 percent of them could go beyond the age of 95.

Nowadays, seniors have to support themselves financially for many more years. Those with little savings or pension and cannot continue working are at risk of economic hardships.

A life insurance policy can be a convenient backup plan for such individuals. They can borrow the cash value of their policies as a loan to meet their financial needs. These kind of loans are tax exempt, have low interests, and borrowers are not subject to credit check.

3. 3 Mortgage Debts

Studies show that a growing number of Americans over 70 years are struggling with various debts, among them mortgages. The situation becomes worse when such a person experiences a further increase in expenditure for reasons like illness.

• Related – What is a Reverse Mortgage: Is Reverse Mortgage a Good Idea for Senior Citizens

A life insurance policy is a surefire way of clearing debts like mortgages without becoming a bother to your family. Having a life insurance policy will enable your family to settle the arrears and save the home.

4. 4 Medical Expenses

Medical conditions are more widespread in older people than the younger ones in most populations. Terminal illnesses and severe health conditions can disintegrate your savings within a short period. As a retired person, you should take measures to protect yourself.

Some of the permanent life insurance policies have a provision for accelerated benefits to cover terminal illness. The policyholder receives a percentage of the death benefit or the whole amount depending on the terms of the policy.

Life insurance for seniors over 65 is handy in paying medical expenses and other debts.

5. 5 Second Families

The lump sum payout after a policyholder’s death may also go to specified relatives. This method of allocation is appropriate when a person has more than one family. It can ensure that everyone gets satisfied to prevent wrangles during wealth distribution.

6. 6 Unplanned Dependents

Many seniors are taking care of their grandchildren whose parents are unavailable for different reasons. In most cases, it is an unanticipated occurrence. Such people can experience difficulties in raising the children with limited retirement savings.

Sometimes, retired people have to take care of their adult children due to the latter’s financial status. Life insurance can guarantee a future for such unforeseen dependents.

7. 7 Reduced or Lost Pension

The increasing number of elderly citizens continues to strain pension funds and social security benefits. Retired people have less to take home at the end of the month.

If a person has a reduced pension or loses it on death, the dependents can suffer economically. A death benefit payout can save the spouse from financial problems.

8. 8 Estate Tax

People with millions worth of assets can use life insurance to pay estate taxes. It may also take care of business debts.

Using life insurance for estate taxes can be quite complicated. You may have to consult an expert if you are not sure of how to go about it.

9. 9 Final Expenses

A final expenses policy covers your family against the expenses incurred at the time of your death. These may include medical bills and funeral arrangements costs. Even completing a simple burial may require thousands of dollars.

10. 10 Business Continuity

Business partners need to buy business life insurance to cover one another when one of them passes away. This policy is important when the parties are critical contributors to the business.

In most instances, small businesses rely on the financial contribution of one or a few people (key persons). A life insurance policy pays a death benefit to compensate for the financial loss experienced when a key person dies. This protects the business from financial hiccups.

Life Insurance for Seniors Over 65 – Final Thoughts

Life insurance for seniors over 65 is necessary. It can save you a lot of financial trouble in your old age. In a family situation, your family members remain economically stable after your financial input declines.

After the demise of a loved one, the family and friends are left grieving. Funerals costs and the associated expenses can aggravate the situation. A death benefit saves your family from the stress of funding the unfortunate event.

You can benefit from your life insurance policy while you are alive. You can supplement your income with the dividends from your insurance depending on the terms of the plan. You could also qualify for low-interest loans to address your various financial obligations.

For more information, here are must-have insurance plans for every American.