According to the U.S. Census Bureau, the population is undergoing a major demographic transition. We’re now entering a period where seniors will outnumber the youth population. This has created a boom in many businesses which cater to the elderly including financial, medical and funeral service areas.
Seniors are increasingly purchasing life insurance, too. Life insurance is a great way to provide for your family financially in a leveraged and tax advantaged way. Small policies can be used to handle funeral expenses while larger policies can help provide for your family for many years.
Why No Exam Life Insurance For Seniors And The Elderly?
Here’s an in-depth look at everything you need to know about life insurance for seniors, from the benefits of having it, how to get approved for the best rates, hurdles you may encounter, and more.
Benefits of All Types of Life Insurance
Life insurance isn’t for the person who purchases the policy. Instead, life insurance is really for the surviving family. The benefits from a policy can ensure your family doesn’t have to pay for a coffin, burial plot, funeral service and other end of life expenses out of the blue.
Additionally, if you’re the primary provider for your family, you’ll want to leave them some money so they can continue to pay bills and expenses, as well as any medical or hospice care bills. The immediate aftermath of a death in the family can obviously be quite traumatic. A life insurance payout can at least help lessen the financial burden.
How Life Insurance Rates are Determined
Traditionally underwritten life insurance policies are determined after an assessment of the applicant’s “risk class.” This is a complete picture of your overall health and life expectancy, which ties to a defined risk and premium a carrier might consider.
Each insurance company has different “underwriting guidelines” but categories considered generally include:
- Annual Income
- General Lifestyle (type of job, types of hobbies, etc.)
- Medical History
- Tobacco and Alcohol Use
- and more…
The younger and healthier you are, the cheaper your life insurance policy will likely be. Unfortunately, seniors aren’t young already, and each year creates an exponentially more expensive risk for the insurers. They also are more likely to suffer from health issues as their bodies grow old, too. This means seniors can have a difficult time obtaining a good “risk class,” resulting in high cost, low benefit policies.
No Exam Insurance Policies: Another Option for Coverage
There is another option, however. Aptly named no exam life insurance, these are policies which don’t require a medical exam and ask fewer medical questions on the application. While each provider offers different types of policies, there are some similar characteristics. No exam policies typically:
- Provide coverage for those between 18 and 80 (with different durations available for those between 60 and 80)
- Offer payouts between $25,000 and $100,000
- Offer different styles of payout based on risk class
- Require no medical exam and limited to no medical questions
Instead of an exam, the policy provider will request a few different types of information. Typically, you’ll provide (or consent to provide) your medical records, motor vehicle report (MVR), prescription records (RX) and information from the Medical Information Bureau (MIB).
Some carriers can, additionally, request an attending physician’s statement, called an APS, if they still need more clarification.
Special Considerations for Seniors
People are living longer than ever before. This is great news. Unfortunately, this doesn’t mean you should avoid purchasing life insurance.
Seniors today are more likely to have children, grandchildren and even great grandchildren. Life insurance can provide for their future, and even their college education. A life insurance policy can also help pay for funeral expenses instead of these costs would otherwise normally fall on the surviving family.
Some senior life policies also include provision for end of life medical care, usually for critical illness or terminal illness. This will provide financial support if you become infirm or otherwise unable to take care of yourself.
What About Pre-Existing Medical Conditions?
Senior life insurance policies are created for seniors in mind. Many seniors already have at some kind of pre-existing health condition. Often, the insurance company is willing to still provide policies, though it comes with costs.
These are considered higher risk, or graded/guaranteed policies. They’re available for a variety of common senior health issues including:
- Hepatitis C
- High Blood Pressure
Even with these conditions, life insurance can still be affordable.
Medical records are used to determine rates. This means if your condition hasn’t grown worse over time, you still might get a low rate. No exam policies are often a good choice for people who have pre-existing conditions which prevent them from obtaining traditionally underwritten policies.
Head to head, fully underwritten policies should be first choice, as they’re they cheapest and don’t require any type of waiting period should the insured pass away within the first few policy years.
Sample Premium Prices
The exact cost of your policy is determined after a review of your specific situation. Aside from the documentation described above, insurers will also look at your age and gender. The length and type of policy you want will also be a factor.
Here’s a very general estimation for no medical life insurance policies for a 65-year-old male, non-smoker:
- $80 for a 10 year term policy with a payout of $50,000
- $95 for a 15 year term policy with a payout of $25,000
- $114 for a 20 year term policy with a payout of $25,000
Approval times vary by company. Some companies actually offer 24 hour approval. Most, however, approve policies in two to four weeks.
Faster approval is not always better. Some providers offer approval in as fast as 15 minutes over the phone. These types of policies don’t require medical records, though there is a cost of convenience and risk embedded in the final premium.
Most high risk individuals are ineligible for these. If you fall into the high risk category, you might find a better deal if you’re willing to wait a week or two for approval.
As a person ages, they naturally think more about their mortality. Seniors want to leave behind a loving family free from financial worry. Life insurance for seniors is often an excellent way to do so. A small policy can provide enough financial assistance to cover short-term expenses and funeral costs. Benefits from larger policies can pay off debts and help create financial security for your children, grandchildren and anyone else you designate.
No exam policies are often a great choice for seniors as they can provide instant leverage. They require no trip to the doctor’s office. Even if you have pre-existing health challenges, a no exam policy can provide the coverage you need.