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The first thing to consider whenever getting senior life insurance is how your loved ones will benefit from the coverage after you are gone. After grasping all that you need, and how the senior life insurance can help you, it will be easy for you to opt for the best senior life insurance that suits your situation. Other things to consider include:
As an aged person, you should be concerned with how you can provide for your loved ones after you pass away. With that, you'll want to consider the life of your dependents. Considering the number of dependents who rely on your income can help you know the amount you'll want in your coverage as well as how long the coverage will last.
Calculating how much insurance you need helps know the costs you're likely to leave behind. In turn, you will find solutions to certain concerns that your dependents may eventually need to deal with.
The best way to calculate the costs you may leave behind is via the "DIME" method. DIME is an abbreviation for:
D - Debt. This includes things like a car loan, private student loan, mortgage, credit cards, etc.
I - Income replacement. With this, you'll want to consider your spouse and/or dependents' life expectancy or anybody else who depends on your income.
M - Mortality. With this, you consider burial costs and wishes.
E - Education. With this, you put into consideration your dependents' education and childcare.
Essentially, life insurance coverage lasts in varied duration since there are different types of insurance coverage. As a result, some last for a specific time, known as term life, others are lifetime, where the coverage covers whole life, known as universal life.
Notably, the different life insurance coverages last for different periods. So, you need to review each type of insurance coverage to know the period it lasts. This way, you will protect your beneficiaries and/or loved ones with the best kind of life insurance that best suits them.
The different types of life insurance include:
That said, knowing the type of life insurance that suits you and your loved ones is essential in determining the coverage duration and the associated benefits.
Undoubtfully, if the life insurance coverage doesn't establish the beneficiary who will benefit after your death, the chances are that the insurance payout benefits won't reach the right persons.
You can avoid this by:
Listing Your Primary Beneficiaries - The primary beneficiary refers to the first-in-line to get the death benefit. In this case, a spouse serves better.
Identifying A Contingent Beneficiary - This is the second-in-line (children) who can receive your death benefit. He/she helps in cases where the primary beneficiary cannot receive your death benefit.
Selecting A Tertiary Beneficiary - This is the third-in-line who can receive your death benefit, e.g., grandchildren.
However, in some cases, contingent and tertiary beneficiaries aren't necessary. So, you must explore the best options when listing your death benefit beneficiaries.
Note: don't name a minor child when choosing your beneficiary (it may be daunting for children to get the funds) or your estate due to long and tedious tax implications. Besides, revisit the policy often, especially on the occurrence of a major change in your life, to verify and update your policy beneficiaries list.
Arguably, nearly all types of life insurance policies include or have an option for accelerated death benefits. With the accelerated death benefit, the coverage allows you to access a segment of life insurance payout while you are alive. This happens when you develop a health condition or terminal illness that qualifies you to get accelerated death benefits. This can help cater to your medical expenses, among other bills.
When you reach the retirement age with large debts, the amount that your family will receive may be impacted after you die. Besides, if your family won't settle the debts you leave behind, they may lose essential assets or the inherited estate. That means, as a senior, you must consider the following when purchasing the life insurance policy coverage.
• Will your family cater to your mortgage, among other responsibilities less your support?
• Would the estate that you've left lose lots of value if it had to pay your debts?
Parties involved in your life insurance contract:
Typically, insurance coverage for seniors involves many people, meaning you need to have a precise knowledge of all the various parties within your life insurance contract. At times, seniors settle for the purchase of life insurance before knowing the parties within the policy.
To avoid this, familiarize yourself with the primary parties to the contract. They include:
• The insured - the person whose life is insured
• Policy owner - the entity or person owning the contract and who's responsible for making payouts
• Beneficiary - the death benefit recipient
Essentially, life insurance riders add value to your contract. Ignoring them means you forgo the opportunity to use funds in a time when you may need it most. So, whenever evaluating the life insurance policy to apply, check with specific policies on the riders.
Some of the commonly used riders include:
This article represents the opinions, thoughts, and experiences of the author. This content has not been paid for by any advertiser nor does Answer.Expert recommend or endorse any products or treatments discussed herein. This article is provided for informational purposes only. Answer.Expert does not provide professional advice of any kind. You should seek guidance from your medical, financial, legal, or other professional representative with any questions you many have about your personal situation.