Question by php1128: What is the best life insurance for seniors?
age 53, will retire in 2010 – federal employee
Best answer:
Answer by Diane T
colonial penn
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Ideally seniors do not need life ins. If you have a decent pension, SS income and personal savings to provide income that is enough. Life ins is to protect future income so your family can survive without you. If you still think you need it buy term insurance- at 53 it is still affordable- get a 10 yr guaranteed premium and save the difference that you would have pd for whole life. AS a Fed employee you will have lifetime health care coverage and that saves you a bunch. Figure out what your basic living expenses will be -at 56 you will still want to work at something for awhile. Many have no choice.
Life insurance is to replace lost income for those left behind, such as your spouse. Your retirement may have survivorship benefits. You should really not need a policy once you have retired. You may consider a term life policy to help with funeral expenses.
Compare term insurance with the group insurance available from the Office of Personnel Management.
My Dad had the group life insurance and had his annuity retirement with a rider to continue to pay my Mom something after he died.
We lost him last July. The paperwork was not that tough for us to handle. No lawyer required.
Why does the senior NEED life insurance? The older you are when you buy it, the more expensive it is – the shorter the odds are, payout vs. payin.
So. If you’re in GREAT health right now, what TYPE of life insurance do you want? What’s the POINT of the life insurance? If you’re a federal employee, I’m assuming that it’s NOT because you’ve got a $ 3Mil estate that you want to avoid estate taxes on.
Generally, term insurance is cheapest. And at 53, 20 year term would carry you to 73 at a FRACTION of the price of whole life. But establish the goal first, THEN find the product that fits.
And as you get older – frequently a SAVINGS ACCOUNT is the most cost effective way to the goal.
If you are going to retire with a pension and want a portion of that pension to continue on to your spouse as a survivor benefit, life insurance can be a less expensive and more flexible option than taking the gov’t survivor option. Talk to someone who can help you figure out how much life insurance you need to accomplish your goals and shop several companies to find the best one for you.
Most seniors do not need life insurance for the traditional purpose of income replacement, but some seniors decide that life insurance is a tool that can help them realize their remaining financial goals. For example they may wish to make sure their funeral expenses are paid for, if they have not set aside savings for that purpose. Others may wish to protect assets from estate taxes. Others may fear that long-term care might wipe out their life savings.
One form of life insurance popular with seniors is a single-premium life insurance policy. As the name suggests, the premium is paid upfront in a lump sum. The policy covers the policyholder until death. Depending on the age of the policyholder, the death benefit can be two or more times the amount of the single premium. Since life insurance death benefits usually are exempt from estate taxes, many seniors use a single-premium life insurance policy as a tool to pass on wealth to their heirs tax-free.
Some single-premium policies can include a provision to pay for certain kinds of medical care, such as nursing home care or hospice care. In this sense, the policy functions as a kind of long term care insurance. Any money remaining in the death benefit at the time of the policyholder’s death is passed on to the beneficiary.