If you are over 65 and recently retired, you are probably already enjoying the retired life. However, one way to fully enjoy retirement is to have financial peace of mind. Will your spouse be able to continue enjoying retirement in your present lifestyle if something happens to you? Should you consider life insurance as a retirement planning tool? Can you get life insurance at your current age, or is it too expensive? This article will address these questions and more.
Key Takeaways
Life Insurance Helps Canadians After Retirement in the Following Ways:
- Final expenses: Life insurance proceeds can be used to pay final expense debts.
- Peace of mind: Life insurance provides peace of mind by providing benefits to pay debts or expenses instead of selling assets or using savings.
- Pension maximization: Pensions for retirees are paid until they die or continue payments to their spouse for a lesser monthly payment. Retirees may want to have a life insurance policy in force during retirement that will pay benefits to their spouse at death, allowing them to take full monthly pension benefits when they retire.
- Mortgage payoff: Life insurance can be used to ensure that you leave loved ones with a mortgage-free home.
- Care for aging parents: Many Canadians are taking on a more active role in caring for their parents as they age. Life insurance helps pay those costs, should something happen while they are providing care.
- Care for a disabled spouse, partner, or children: Life insurance is a necessary tool to provide continued care for those who are caring on behalf of an injured or disabled spouse, partner, or child.
- Supplement income: Your retirement income may be supplemented with the cash value build-up in permanent policies.
- Living benefits: Many life insurance policies include a provision where you can access benefits before your death to help with long-term care needs.
- Leave money to a charity: Donating money to a charity by listing them as your life insurance policy beneficiary is an effective way of giving back. Moreover, it allows you control over when and how much all those donations are used.
- Terminal illness: Some life insurance policies offer an optional terminal illness rider that allows you to access the death benefit early if diagnosed with an incurable condition.
Are Life Insurance Premiums Expensive for Those Age 65+?
Life insurance premiums do go up as you age. However, there are affordable options available for all kinds of budgets and needs even after retirement. After age 65, term life is still the most affordable life insurance option if you need a more significant benefit amount for a defined time. Permanent policies have higher premiums, but offer lifetime protection. In addition, permanent policy premiums can be lower than term life policies because lower death benefit amounts are available with permanent plans. Overall, there are many affordable life insurance policy options, even for those over 65.
What Types of Life Insurance Policies Are Available to Those 65 and Older?
Term Life Insurance
Term life insurance is a type of life insurance that provides you with benefits and premiums set to a specific period, typically from 10 to 30 years. The longer the term period, the higher the premium. For example, a ten-year level term premium is lower than a 20-year or 30-year level term premium. However, at the end of the term, the policy premiums go up every year. Another type of term policy is an annual renewable term. The death benefit on a yearly renewable term policy stays the same, but the premium increases yearly.
Permanent Life Insurance
Permanent life insurance provides a type of coverage that lasts a lifetime. It is more expensive than the term type, but it has guaranteed benefits. This is important for seniors who want to make sure they have money to cover funeral expenses or for spouses, partners, or children with disabilities who need financial help after a parent’s death.
Are Medical Exams Required for Those Age 65+?
For those who have potential health issues or dislike the idea of getting blood drawn or cannot find time for an exam, there are options. Many life insurance companies offer no medical exam applications where applicants do not have to undergo a medical exam before issuing a policy. These policies are often underwritten using the answers to questions on the application and through medical records provided by your doctor. Those in good health may be able to get an affordable premium without going through a formal examination. The death benefit you applied for and your health history will often determine whether you can apply for coverage without a medical exam. Those with medical challenges may consider guarantee issue policies.
What About Those With Pre-Existing Conditions?
Life insurance for Canadians aged 65+ is available, even if they have a pre-existing condition. There are also options for those who cannot get medically underwritten life insurance through Canadian life insurance companies that offer guaranteed issue life insurance products.
Guaranteed Issue Life Insurance
Guaranteed issue life insurance is permanent life insurance that offers lesser benefits than other types of life insurance. It can be obtained on the same day if specific criteria are met. The waiting period, however, means that death benefits are not paid immediately. If one dies before the waiting period, their beneficiaries will get the money they paid in premiums back.
How Do I Find Out More?
Are you a recently retired Canadian who is over the age of 65 and concerned about protecting your spouse or loved ones? Find out more about planning for retirement using life insurance by contacting one of the life insurance experts at Hometown Life at (289) 606-0103.
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