LIFE ASSURANCE FOR THE OVER 50’S – Life insurance for senior citizens
Many people find thinking about life insurances and especially about the worries of becoming old as daunting perspectives. It is understandable that they avoid thoughts about death, illness or incapacity, but at a second glance they might just be the thoughts giving them a chance to prevent their loved ones from financial hardships.
Particularly for those who are heads of their family, providing the resources for living, this insurance should stop being just a random possibility.
One does not have to be in his/her 50s in order to start planning. Younger ones can begin comparing and contrasting insurance policy offers. The most affordable and recommendable type of insurance, insurance advisers say, is the term insurance. Of course, one can also choose the permanent life insurance. Why is term insurance better? Firstly, let us mention that the premiums for a term insurance have a lower price compared to the premiums paid for a permanent insurance. Term insurance periods range from one year to decades, the most common being those of 5, 10, 15 and 20 years. The insurance company only pays the beneficiary in case the policy holder dies within the insured period of time. Otherwise, the insurance does not come into effect. The good news and what makes term insurances more practical is the fact that they can be renewed if they expire or converted to permanent ones. For a clearer view, one must be aware of the different types of term insurance: level term insurance, increasing term insurance, decreasing term insurance, convertible term insurance and renewable term insurance.
The first type, level term insurance, has the same payout throughout the period of the policy. It comes into effect at death and if it expires before it pays no value. The increasing term insurance, as the name suggests, has a yearly growth in value, usually a small percentage (5%), depending upon the inflation. That is what makes it advantageous in the long run, because it is protected from the increase of prices and taxes. As opposed to it, the decreasing term insurance has a level of coverage falling down each year, until the policy reaches zero. The most strategic term insurence are the convertible and the renewable ones.
With convertible insurances, one can switch from the actual term insurance to a whole-of-life or endowment policy without having to pass medical exams. The only drawback is the increase of the premiums. The renewable insurance is also an option not to be overlooked, for it allows one to renew an existing policy when it expires. Similarly to the convertible insurance, it does not require medical exams, but depending on the company it may not be renewable for those aged over 65 years. Usually, the value of the policy should be seven times the value of one’s annual revenue.
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