Finding a life insurance plan that benefits us and covers our needs is a tricky task, especially when taken into account the sheer volume of brokers, banks, life insurance providers, and advisors offering “the best prices in the market.” However, choosing a life insurance policy is one of the most important investments you’ll ever make, not only for you but also for your loved ones.
It is actually a very stable and safe way to save your relatives from going through a hard time because of an unexpected event. As well as life insurance coverage, there are many factors to consider when looking for a life insurance quote as a senior citizen, such as potential long-term care insurance, death benefits, a life policy, and a life settlement.
However, one of the most important factors that affect people’s decision when choosing a life insurance policy is how much money they are willing to spend on it. Taking into account income, expenses, and other aspects, how much can they afford to pay in premiums? This article is a basic guide for seniors that are looking for an affordable life insurance plan.
1. You Need To Be Aware Of How Premiums Are Calculated
This is the first thing people need to have in mind when looking for affordable life insurance plans. Look for a policy that can be considered fixed price; these are usually called “level-term.” In a level-term policy, rates remain the same during the entire length of the term. It is not relevant if the policy is 10 years long or 15 years long, premiums should be the same as they were established before the contract was signed.
Read The Contract Carefully And Make Sure There Will Not Be Any Increases Any Time In The Future.
2. Determining If The Company You Are Dealing With Is Reliable
Not all good insurance companies are extremely popular, just because you haven’t heard about an insurance company it does not mean it is not legit. The same goes to the other side, some companies that are very well-known are not reliable at all. The best way to make sure you are with the right provider is by doing some research and getting a clear picture of the company you are dealing with and its culture.
It is important to determine the financial strength of the company. A great way to do this is by checking the A.M. Best Rating which indicates the grade of financial strength an insurer has. It is also good to take into consideration how long the company has been established, 50 years is a good reference number.
3. Making Sure If The Policy Is Convertible To Permanent Coverage
This is done in order to assure your policy will have some flexibility in case something happens in the future. If you are getting a life insurance policy at age 45 then you need to know that you will probably want to convert it into a permanent policy.
As your health deteriorates while aging it becomes more difficult to find an insurer willing to cover you for affordable premiums. It is recommendable to inquire about the policy’s conversion rules and how long they will remain valid and in effect. Lastly, it is also recommendable to inquire whether it can be converted to a universal policy or whole life policy.
4. Keeping The Waiting Period In Mind
Now that you have found a life insurance plan at affordable rates, it is time to determine whether the waiting period is wise or not. Waiting period is the name given to that period of time insurers take before paying the full death benefit. This, like any component of an insurance policy, will change the cost structure and it’s an important thing to consider.
In most cases, life insurers only impose a waiting period if something happens to you during the first two years after acquiring the policy. Hoping nothing will happen to you (another reason why people should not look for an insurance plan the exact moment they need it) there should be no worries on waiting the first couple of years and from there on they will pay as soon as the event occurs.
5. Always Go For Medical Exams
There are many insurance companies which do not request a previous medical exam without an exam. They work exactly like any other insurance company but they usually have higher premiums than standard policies which do request medical exams. What is the reason for this? Well, life insurance companies need to cover the expenses of risks in some way and the only way they can do it is by distributing it in your premiums.
The purpose of the medical exam is to give the insurance company an idea of your overall health; but without that picture of your health, they don’t know how much risk that you are to insure. They are going to offset that risk by charging you higher premiums. There are more disadvantages to these policies, a great example is that you’re going to be limited on the amount of life insurance that you can buy.
In most cases, these insurance policies do not exceed $300,000 coverage which is not enough for most families. That being said, you need to take into account the possible expenses your family will have in case something happens to you—school expenses, if any of your children are going to college, mortgage, etc.
Not having enough coverage could leave your family with a massive amount about of debt and other expenses. Buying a not exam plan is not the best choice if you are looking for an affordable life insurance policy. It is always a convenient precaution to assure relatives and loved ones a stable future and the best way to fulfill this is by buying a life insurance policy—just in case.
It may be a difficult decision but it does not mean that it has to leave you in bankruptcy, you can easily find an affordable and reliable life insurance plan. Once you have made your decision, you will feel a great relief a sense of comfort and will feel sure that you have made the right decision.