Life insurance doesn’t only make sense for adults with children. It is still a valuable financial asset and form of protection if you’re in your senior years as well. For the elderly, health can change unexpectedly. You and your family deserve peace of mind if you receive sudden news about a disease or condition. It could be progressive, like Alzheimer’s, or more immediate, like cancer. No matter what the case may be, you can look after yourself and plan ahead for the rest of your life by evaluating your current life insurance policy. Here are a few tips for seniors to use their life insurance wisely.
Don’t Leave Your Cash Value
The cash value that your whole or universal life insurance earns does not go to your loved ones after you pass away. Beneficiaries only receive the death benefit you signed up for, which means there could be thousands upon thousands of dollars going right back to the lender if you never collect it while you’re alive. If you don’t feel the need to take out the money and spend it on yourself, you can withdraw it and put it in a savings account that also generates interest.
The money in this fund can then be bestowed to an heir after your death. Of course, there are also many practical ways to utilize your policy’s cash value. Depending on how long you’ve been paying premiums, you may have enough earned to cover your cost of living solely with the pay-out.
Understand End-of-Life Care Options
If you receive a diagnosis with a life expectancy of two years or less, you may be able to use your policy to provide monetary assistance to your family now. You can review a guide on viatical settlements to learn how to receive payment to use as you wish. This can take a tremendous weight off your shoulders if you are ever diagnosed with a terminal illness and want to make your hospice treatment and living expenses more manageable for your loved ones. While your death benefit will no longer go to your loved ones, you can use the settlement money to distribute funds to them how you see fit. Your estate planner can also arrange for a portion of the money to be saved and only dispersed after your death.
Term-based Coverage Can Save You Money
If you don’t need whole insurance, you can still get good coverage with a sizeable death benefit for half the cost in premiums. Term-based life insurance for seniors 70 and older is much more affordable than permanent coverage. It also may not require a medical exam or other health information to qualify. Even if you are healthy and fit you should never cancel a term insurance policy as you will lose out on the amount you have paid as premium up until now.
Many companies offer life insurance for seniors all the way up to age 85, so it’s never too late to begin exploring your options. Even small death benefits can be a good help for seniors whose loved ones may not be able to afford hospice care or funeral arrangements; keep in mind that your children or beneficiaries being financially stable does not mean they can afford costs that come at the end of someone’s life.