By Rita Charleston
No one likes to think about dying, but, like taxes, it’s inevitable.
So is the need for your loved ones to have money available after you’ve gone.
That’s where life insurance can come in. If you have a solid life insurance policy, the proceeds can help provide for those you leave behind. And after you’re gone, they may need that money.
For example, funeral costs alone average $6,500, according to the National Funeral Directors Association; and that doesn’t include cemetery costs.
“One of the obvious reasons you may need life insurance is to help prepare your loved ones for the financial consequences of your death,” says Donna Jermer, director of marketing for Colonial Penn Life Insurance Company. “Besides the funeral expenses, the family must deal with day-to-day expenses which they may have to pick up, plus existing bills, lawyer fees, credit cards, loans, and so on. So with life insurance, you’re preparing to relieve financial burdens they may face without you.”
“Social Security will stop, sometimes pensions as well,” notes Leon L. Levy, president of Leon L. Levy and Associates. “Life insurance is the greatest vehicle for making sure your loved ones have the money they need to continue living as you’d want them to.”
Which is best for you?
Many seniors mistakenly believe they no longer qualify — that they’re just too old. Not so, says Jermer, who puts the cut-off age for getting life insurance at 85. Levy says the general rule of thumb for companies is about 80, with some willing to insure up to age 90. But it’s best to check with a reputable insurance agent.
There are a number of important considerations when shopping for life insurance, advises Jermer, such as which kind is best for you. Two major types are whole life and term insurance. Also, she urges you to consider how much coverage you need and how much you can afford to pay each month.
“For some policies, companies want to know everything about you in order to evaluate whether to insure you,” says Levy, “and your past and present health are part of that process. When you apply for fully underwritten policies, you have to disclose everything about yourself. A company will write to your doctor and get copies of his reports, records or interpretations, as well as ordering their own insurance physical, including blood studies, EKG exams and more.”
Past and present health
“For other policies,” Jermer adds, “you’ll just need to answer a few questions about your health, but you don’t have to take a medical exam, so it can be easier to qualify. Some companies offer guaranteed acceptance life insurance to seniors. That means you needn’t answer any health questions at all or take a medical exam. For that reason, most companies will limit the benefit available in the first few years.”
Several more precautions should be taken into account when you apply for life insurance, Jermer and Levy agree:
• Don’t feel pressured. If you are made to feel that way, ask for all the details in writing so you can take your time and review them later.
• Don’t ever sign something you haven’t read or do not understand. “It might be better to ask a family member or trusted friend to go over everything with you,” says Levy.
• “Know who you are with,” adds Jermer. “Make sure your insurance company is properly licensed in your state. If in doubt, you can contact your state insurance commission.”
The bottom line, they say, is to evaluate your circumstances and your survivors’, determine just how much coverage the policy will provide and when it will pay out, take stock of your finances, think about what you want for your family and make the right choice.
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