Why Seniors Should Dump Their Expensive Life Insurance Policies

As we get older, we must confront our own mortality. The reality that one day, we will die. That is why most people get a life insurance policy in the first place. It’s a form of protection for loved ones against the financial expenses that are incurred after death. Life insurance offers beneficiary payments that can last the lifetimes of beneficiaries. If bought early enough.

Yet, life insurance policies are more beneficial for younger applicants. Younger applicants are in better health and will live longer to pay premiums. In turn, insurance policies gain more value over time. Advanced age won’t disqualify you from coverage. It will just make coverage more expensive with diminished benefits packages. For the elderly, applying for life insurance can be cost prohibitive and futile.

If you are over 65 and pay for an expensive life insurance policy, you may want to dump it. For practical reasons. Also, you may have less expensive and age-appropriate alternatives.

Too Old to Enjoy Benefits

The average retired couple will have to pay over $250,000 to $280,000 in medical expenses throughout their retirement years. The average person lives to be 69 to 71. Let’s say that you live to be 95. Unless you stay in Olympic-caliber, shape and mentally challenge yourself constantly, your body and mind will be impaired by advanced age.

Paying for medical expenses is a great benefit. However, consider the usual perks of a life insurance policy. Will you need to leverage a loan in your 80’s or 90s? You might have adult children and/or loved ones in middle or elderly age who can take care of themselves. Beneficiary payments might be redundant or unnecessary in such circumstances.

If you own life insurance over the age of 65, then the rest of your life can be anywhere from half a decade to 30-years. Your quality of life, physicality-wise, will progressively diminish. A better use of your money might be in a good health insurance policy.

Progressively Increasing Rates

Expensive life insurance policies are expensive for senior citizens for a reason. Statistically speaking, a life insurance company is more likely to begin paying out to beneficiaries for a 65-year-old compared to a 25-year-old. A senior citizen could wind up paying hundreds of dollars a month in premium to maintain an expensive insurance policy.

Unless you are paying an expensive life insurance policy to solely benefit others, then the current rates you pay are too high relative to the future payoff. If you have enough money to pay for an expensive life insurance policy, then consider your strategy for doing so. You are paying exorbitant premium rates, on account of advanced age alone, for benefits that may not benefit you in the long run.

Final Expense Insurance

If you are over 65 and possess significant finances, along with strategically saving your money, you may want to purchase final expense insurance. Final expense insurance is a trimmed-down life insurance policy that pays for all funeral-related expenses. A basic policy usually does not exceed $25,000, though you can pay for more.

Finalexpenseinsurance.com explains it like, “Final expense insurance is also known as burial insurance is a type of life insurance product geared towards seniors.  It helps to remove the financial obligations of a family when a person dies and provides peace of mind.”

You can leave behind a will to bequeath your estate. That will be a lot less expensive than paying inflated premium prices for a life insurance policy to pay beneficiary payments. You can get a burial policy so that your loved ones don’t have to worry about those expenses. The application process is simplified, and you can be approved in hours or days.

What Suits Your Needs?

No one is implying that you shouldn’t have a life insurance policy of some kind. You should just consider your needs as you get older. Bequeath your money in a will and buy a pared-down life insurance policy that suits your needs. Otherwise, you may just be paying a lot of money for an expensive policy for its own sake.