Yes, seniors can get good rates on life insurance
The amount of coverage needed
As obvious as that may be for some, not everyone understands that the amount of coverage you request can have a great influence on final rates. We are not talking about the simple fact that the more you request the higher the premiums but rather break points. Very few people seem to realize that life insurance has break point discounts. In other words, a senior may requests a quote for a $75,000 and pay more than another who requests a quote for $100,000. The reason for that is that insurance companies will discount their rates at certain amounts such as $100,000, $250,000, $500,000 and $1,000,000 in coverage. These discounts at the amounts just mentioned are called breakpoint. Another way to explain this would be that the cost per $1,000 of insurance is less at $100,000 and above than under $100,000. And that is the same for amounts over $250,000 which are lower than for under $250,000 and so on.
So, when a senior (or others for that matter) look for coverage, it is important to note that getting a little more coverage than originally decided can save you a lot of money in the long run and since seniors tend to pay more per $1,000 of coverage because of their age, then breakpoints discounts can be much more significant than for younger people.
The length of coverage needed
Unfortunately, this point is also often misunderstood or not considered at all. It is by far cheaper to get a 10 year term life insurance plan than a 20 year term plan. Universal life and whole life with their long term rate guarantees are even priced higher. Does that mean that, for the sake of money saving, all seniors should get a 10 year term. Not at all! The selection of the plan should be basically based on need and budget.
Need – If the need is for 20 years of coverage, getting a 10 year plan may save you money at the beginning but, since rates after 10 years will likely go up so high that they may become unaffordable, the individual senior may need to cancel their 10 year term and have no coverage for the following 10 years. So, try to get the plan length you need from the beginning.
Budget – The senior's budget is also very important. As we said above one should try to get the plan that works for their planned needs but what happens if that plan is not affordable. Then, by all means, do not do that. The point here is that if you get the plan you need but need to cancel it a few months down the road because it is no longer affordable, then you have lost everything. If for reason of budget you cannot get the plan you need, you should make sure that it is convertible. In other words, if you need a 20 year term plan but can only afford a 10 year plan, see that the 10 year term is convertible to a good whole life or universal life (long term plans) so that you have at least this option available in case, for health reason or others, you cannot get a 20 year plan later.
Since the above can be very influential in the final rate you pay, make sure that, to keep your insurance affordable, you select a plan that is as close as possible to the length of coverage you need and yet still remains affordable.
The health of the individual senior
This factor seems to be one that most seniors are aware of when shopping for coverage. If your health is perfect, then keeping your insurance affordable should not be a problem. People with great health usually have access to super lower ratings such as preferred plus and so on. But what happens if your health has not been so great, can you still get an affordable plan? It may take more work but yes. What it really comes down to is that you need to shop to more insurance companies and ask more questions. Never assume that term is always cheaper in cases where your health is not so good. We have seen many whole life plans that came out cheaper than term life. And doing an insurance exam is also not always the best route to follow. Many simplified whole life plans still offer good rates and very basic underwriting. In some situations, you may only have to answer a few questions to get an approval.
Regardless of which plan you select, please make sure to always ask a lot of questions and shop with, at least, three insurance companies and/or brokers. Once you receive your new approved policy, review it carefully. Bottom line is, you are responsible for your final decision so do your homework before and after you receive your new life insurance policy. We wish you well!
As obvious as that may be for some, not everyone understands that the amount of coverage you request can have a great influence on final rates. We are not talking about the simple fact that the more you request the higher the premiums but rather break points. Very few people seem to realize that life insurance has break point discounts. In other words, a senior may requests a quote for a $75,000 and pay more than another who requests a quote for $100,000. The reason for that is that insurance companies will discount their rates at certain amounts such as $100,000, $250,000, $500,000 and $1,000,000 in coverage. These discounts at the amounts just mentioned are called breakpoint. Another way to explain this would be that the cost per $1,000 of insurance is less at $100,000 and above than under $100,000. And that is the same for amounts over $250,000 which are lower than for under $250,000 and so on.
So, when a senior (or others for that matter) look for coverage, it is important to note that getting a little more coverage than originally decided can save you a lot of money in the long run and since seniors tend to pay more per $1,000 of coverage because of their age, then breakpoints discounts can be much more significant than for younger people.
The length of coverage needed
Unfortunately, this point is also often misunderstood or not considered at all. It is by far cheaper to get a 10 year term life insurance plan than a 20 year term plan. Universal life and whole life with their long term rate guarantees are even priced higher. Does that mean that, for the sake of money saving, all seniors should get a 10 year term. Not at all! The selection of the plan should be basically based on need and budget.
Need – If the need is for 20 years of coverage, getting a 10 year plan may save you money at the beginning but, since rates after 10 years will likely go up so high that they may become unaffordable, the individual senior may need to cancel their 10 year term and have no coverage for the following 10 years. So, try to get the plan length you need from the beginning.
Budget – The senior's budget is also very important. As we said above one should try to get the plan that works for their planned needs but what happens if that plan is not affordable. Then, by all means, do not do that. The point here is that if you get the plan you need but need to cancel it a few months down the road because it is no longer affordable, then you have lost everything. If for reason of budget you cannot get the plan you need, you should make sure that it is convertible. In other words, if you need a 20 year term plan but can only afford a 10 year plan, see that the 10 year term is convertible to a good whole life or universal life (long term plans) so that you have at least this option available in case, for health reason or others, you cannot get a 20 year plan later.
Since the above can be very influential in the final rate you pay, make sure that, to keep your insurance affordable, you select a plan that is as close as possible to the length of coverage you need and yet still remains affordable.
The health of the individual senior
This factor seems to be one that most seniors are aware of when shopping for coverage. If your health is perfect, then keeping your insurance affordable should not be a problem. People with great health usually have access to super lower ratings such as preferred plus and so on. But what happens if your health has not been so great, can you still get an affordable plan? It may take more work but yes. What it really comes down to is that you need to shop to more insurance companies and ask more questions. Never assume that term is always cheaper in cases where your health is not so good. We have seen many whole life plans that came out cheaper than term life. And doing an insurance exam is also not always the best route to follow. Many simplified whole life plans still offer good rates and very basic underwriting. In some situations, you may only have to answer a few questions to get an approval.
Regardless of which plan you select, please make sure to always ask a lot of questions and shop with, at least, three insurance companies and/or brokers. Once you receive your new approved policy, review it carefully. Bottom line is, you are responsible for your final decision so do your homework before and after you receive your new life insurance policy. We wish you well!
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