Many consumers had large term life insurance policies in their younger years. During the time that large mortgages were getting paid off, and children and spouses needed support it made sense to purchase term coverage. It was also fairly cheap because of the age of the applicant. We were told by insurance advisors that we should not worry that these policies would expire after 10, 20, or 30 years because by that time we would outlive our need for a large policy. Children would be on their own, mortgages would be paid off, and our savings could cover any future needs.
A large number of people had additional life insurance from a workplace group plan. However, those plans do not always follow retirees after they collect their gold watch either.
The problem with that plan is that it did not work out for many of us. Many people had periods of unemployment or other financial issues. Mortgages needed to be extended sometimes, and savings accounts do not always grow as quickly as planned. And those pesky kids did not always stick to our schedule either, and we may find ourselves facing retirement with people who still depend upon us for some financial support.
Well we do have some good news too. Statistics tell us that people can expect to live longer than they did, even ten years ago. People are also enjoying a longer working life, and many do not decide to take up a rocking chair at age 65. Large insurers recognize this, and they do extend term coverage into older ages, and the rates for coverage have dropped. The rates drop, and coverage extends longer, because life insurance companies have calculated that they can accept the risk at a lower premium, and for a longer time, because people are living longer.
So if you have found yourself in middle age, or approaching retirement, and realize that you have not outgrown your need for term life insurance, you do have options. Now a 70 year old cannot find a huge, 30 year old term policy. But that 70 year old, in reasonable health, can certainly find an affordable 10 year policy.
That extra ten years may be enough time to get the mortgage paid off, or to make sure the grown children are finally out of the house and on their own.
If an older person does have some serious health issues, they will probably not qualify for a term policy. In that case, if they still see a need for coverage, they may consider a whole life policy that has been designed for seniors. Since whole life coverage does not expire, and can actually build a cash value, it will cost more.
Instead of looking at large face values of hundreds of thousands of dollars, the applicant will have to accept a face value of $2,500 to $25,000. This smaller face value is designed to provide money for funeral expenses, debt settlements, and other expenses that come up when a person dies.
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