Term Life Insurance Articles
How To Maximize Life Insurance Coverage For Elderly Family Members
2010-08-18
Life insurance is a fairly straightforward principle. An agreement is forged between two parties, typically an insurance agency and an individual, to pay the individual an agreed upon amount at the time of death. To maximize coverage based on age, sex, occupation and a list of others criteria, an insurance company, with the help of an underwriter, determines the risk of executing such a policy, or in other words, the chance of paying out the policy for this individual given the known factors and what predications can be made with such factors.
For the young, insurance in the form of term life, whole life or universal life is often cheaper to acquire than later in life. The likelihood of a healthy, non-smoking, married male suddenly passing away is less likely than an octogenarian. And this is true for all types of policies.
The major difference between the three types of policies (term life, whole life and universal life) is how much of annual premium is paid to insurance. A term life policy receives a 100 percent of the premium for insurance to cover the individual in the event of death. Universal life and most types of whole not only cover the cost of insurance (the payout of death benefits), but also additional cash that the insurance company invests. This translates to a policy's cash value, and the term or period at which that amount is paid to the individual, and makes up the nuances between whole and universal life insurance.
Current financial planning advice for the prospective insured person is to purchase term life insurance because the costs for this type of insurance are so competitive and then to invest any additional funds to gain future cash. The same is true for the elderly. The rates for term life insurance may be somewhat higher, but many elderly maintain healthy lifestyles, have a great health report card and can maximize coverage by qualifying for many types of term life insurance. Products like hospital confinement, burial and serious-illness insurance may also be viable products for the elderly.
Whole life insurance policies do have a place as many do not require physical exams. The cash value of these policies is reduced (typically $5,000 to $25,000); thus, the only obligation to the senior is to keep the policy paid in full. Such polices mean the senior has insurance through the remainder of their life and will not need to search out additional insurance coverage when a term expires. Because the obligations to the insurance company are low, the senior gains not only a cash advantage, but death benefits.
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Life insurance is a fairly straightforward principle. An agreement is forged between two parties, typically an insurance agency and an individual, to pay the individual an agreed upon amount at the time of death. To maximize coverage based on age, sex, occupation and a list of others criteria, an insurance company, with the help of an underwriter, determines the risk of executing such a policy, or in other words, the chance of paying out the policy for this individual given the known factors and what predications can be made with such factors.
For the young, insurance in the form of term life, whole life or universal life is often cheaper to acquire than later in life. The likelihood of a healthy, non-smoking, married male suddenly passing away is less likely than an octogenarian. And this is true for all types of policies.
The major difference between the three types of policies (term life, whole life and universal life) is how much of annual premium is paid to insurance. A term life policy receives a 100 percent of the premium for insurance to cover the individual in the event of death. Universal life and most types of whole not only cover the cost of insurance (the payout of death benefits), but also additional cash that the insurance company invests. This translates to a policy's cash value, and the term or period at which that amount is paid to the individual, and makes up the nuances between whole and universal life insurance.
Current financial planning advice for the prospective insured person is to purchase term life insurance because the costs for this type of insurance are so competitive and then to invest any additional funds to gain future cash. The same is true for the elderly. The rates for term life insurance may be somewhat higher, but many elderly maintain healthy lifestyles, have a great health report card and can maximize coverage by qualifying for many types of term life insurance. Products like hospital confinement, burial and serious-illness insurance may also be viable products for the elderly.
Whole life insurance policies do have a place as many do not require physical exams. The cash value of these policies is reduced (typically $5,000 to $25,000); thus, the only obligation to the senior is to keep the policy paid in full. Such polices mean the senior has insurance through the remainder of their life and will not need to search out additional insurance coverage when a term expires. Because the obligations to the insurance company are low, the senior gains not only a cash advantage, but death benefits.
