It’s common for seniors to be uncertain as to whether they need life insurance. Many seniors have achieved some major financial goals – they’ve paid off the house and sent their children through school. They only require day-to-day living expenses. But they may not realise the financial hardship they could put their spouse or other relatives through if they die.
There are two main life insurance options for seniors – funeral insurance and term life insurance. Deciding which one to choose depends on a number of factors.
Funeral insurance provides a lump sum payment to your beneficiaries if you die. The main benefit of this is that your family can pay for your funeral expenses and not have to worry about any resulting financial stress during an already distressing time.
In some cases, funeral insurance premiums may be more expensive than term life insurance premiums, so you need to carefully assess your situation. Often there is no medical exam required with funeral insurance, so it may sometimes be a suitable option for those with health problems.
Seniors who are fit and healthy might decide to think twice about funeral insurance. If you take out a funeral insurance plan at 65 and live until 90, the amount you will have spent on premiums will be significant. Prepaid funerals or funeral bonds might be a more affordable option.
Term life insurance
Term life is generally cheaper than funeral insurance, although there is usually the requirement for a medical examination before your policy will be approved. The rate of premiums will depend on factors such as your age, health, lifestyle, and whether or not you’re a smoker.
For some it may be worth getting term life insurance and investing the money saved elsewhere. Our advisors can discuss your individual circumstances with you and help you make the decision between funeral insurance and term life insurance.