Do seniors need life insurance?

Like so many questions, this one is too general. Just as I can’t tell you there’s one senior health plan that’s right for everyone, I also can’t answer this yes or no question without learning more. But what I can do is give you some reasons why a senior might benefit from coverage. If some of the reasons apply to you or a senior you help care for, it may be time to start shopping for a policy.

asset transfers

Many people want to pass money on to heirs, and a life insurance policy can be a good way to achieve this goal. Most of the time, death benefit income will not be taxed. And since most of us only pay a monthly premium, it can be an affordable way to plan for a wealth transfer.

So if your goal is to leave money to your spouse or children after you pass away, consider using a policy.

Another inheritance problem

Here is a very common situation. Consider the example of a man who owns a small law firm who wants to leave him his daughter, who is also a lawyer. He also has two children, but they decided to become teachers, so they have no real interest in running a law firm. But the man wants to be fair to his children and knows that the law firm is his greatest asset.

So he buys a life insurance policy that names the two sons. This policy actually buys them out of any interest in the law firm. The owner of the law firm has used his coverage to distribute his assets fairly among all the children.

business insurance

A common reason seniors seek coverage is because they need it for their business. Many executives and business owners are older people. Financing sources may insist that their loans be protected by a policy. Additionally, key man insurance can ensure that a business can recover financially in the event that it loses a valuable team member. Therefore, companies, large and small, are one of the main buyers of policies for the elderly.

final expenses

Probably the most common type of senior life insurance we see advertised is a smaller face value whole life policy. In business this is called a final expense or burial policy. They typically have death benefits from a couple thousand dollars up to twenty-five thousand dollars. They are intended to help the insured person’s family pay final expenses. These could be things like funerals, medical bills, debt, and travel.

If a senior has little money saved and doesn’t want to pass the burden of final expenses onto a spouse or children, a small policy can provide security. Sometimes seniors buy them for themselves, but many times adult children will pay the premium for their parents. It can be difficult to bring up this topic, but once it’s done, it’s often a relief for the whole family.

Do you need a policy? Your own budget, savings, and unique situation must be considered. For some people, it would be better to set aside a few dollars each month to plan for final expenses. But many families find it easier to just pay a premium.


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