Life insurance that’s more lenient, with rates you can afford
Life insurance for seniors and those with health problems can be tricky. If you’re older and you’ve procrastinated on buying life insurance, you might find it hard to qualify for a traditional term or whole life insurance policy. Or if you’re as young as 45-50 but you have some health issues, you might have the same problem. Yet you may still want to protect your family from any outstanding debts and make sure you’ll have enough money left over for end-of-life expenses like funeral or burial costs.
If this sounds like you, simplified whole life insurance (also called simplified issue life insurance) might be the solution. Simplified life insurance belongs to a category of gloomily titled life insurance called final expense insurance. The two types of final expense insurance are simplified whole and guaranteed whole life insurance. Both involve no medical exam, and can be some the best life insurance for seniors.
What’s the difference?
Simplified whole life insurance:
Guaranteed life insurance:
If you can qualify for a simplified whole life policy, you’ll be able to secure a larger coverage amount (up to about $50,000) for a lower monthly premium than you would with guaranteed life insurance—so it’s well worth it to fill out that medical questionnaire.
Unlike traditional whole life insurance, most simplified whole life policies don’t have a savings component called cash value that builds over time. This is another way in which it’s “simpler” than buying a regular whole life policy. Rather than calculate savings and the interest you’re accruing with them, you’ll simply pay a monthly premium in order to secure the eventual fixed payout amount to your family.
Simplified whole life insurance gives you more coverage at a lower price point than other types of final expense insurance like guaranteed whole life, since it covers moderate risk people. If you’re on the older side and can’t qualify for a traditional life insurance policy, but you’re relatively healthy, simplified whole life may be your best bet.
Like all life insurance policies, simplified issue life insurance can be customized to meet a policyholder’s needs with add-on features called riders. Riders add extra coverage and will increase the cost of monthly or annual premiums. Here are some popular riders:
Allows policyholders to use the death benefit payment early in the case of terminal illness to cover necessary medical costs.
In the event that the policyholder requires long-term care that his or her health insurer won’t pay for, such as nursing home or at-home care, a long-term care rider will cover the cost.
If a policyholder becomes unable to pay monthly premiums because of loss of income stemming from a disability, a disability waiver rider allows the premiums to be skipped without the policy being canceled until the policyholder recovers. This may be limited by age, so be sure to ask your insurer for details.
Term life insurance is a type of life insurance meant for younger, healthy adults, usually with dependents. Term life offers coverage for a set period of time and then expires, and pays a death benefit to beneficiaries if the policyholder dies while the policy is in effect. Because the risk of insuring these individuals is lower, term life offers a much higher death benefit payment at a much more affordable monthly premium.
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