Guaranteed Universal Life Insurance for Seniors
Key Takeaway
Guaranteed universal life insurance coverage can be a cost-effective life insurance product with a primary focus on a payable death benefit. Purchasing life insurance protection as a senior person can provide the peace of mind knowing that your family will be taken care of upon your death. The right life insurance policy will always depend on your existing resources and assets, so be sure to carefully evaluate your policy options and speak with a trusted advisor or life insurance agent before making a decision.
Why Purchase Whole Life Insurance Coverage as a Senior?
Life insurance policies cover a broad scope and can provide a blanket of assurance that should you pass away, you have insurance protection in place to settle certain debts, help prevent a family member from losing property, or pay other expenses such as medical and funeral costs.
Senior life insurance typically provides protection geared towards objectives such as:
- Leaving a lump sum payable to your designated family members
- Covering burial costs and any other expenses linked to your estate
- Replacing your income, such as when a spouse or partner is financially dependent on your pension earnings or other income
Purchasing life insurance protection as a senior person can provide the peace of mind that your family will be able to honor your life wishes and celebrate your life comfortably, potentially without the burden of large medical bills or other debts.
Well-structured life insurance policies may also offer tax advantages and present policy beneficiaries with an inheritance from the death benefit that is potentially less exposed to limited tax obligations.
Considerations When Purchasing Senior Life Insurance Coverage
Data from Statista indicates that in 2022, 2.55 million children throughout the US were living with a grandparent within their household. A report published by AARP further shows that 2.3 million grandparents were primary caregivers for grandchildren in 2023.
These figures indicate a demonstrable need for seniors to secure insurance coverage to protect their life interests, ensuring that grandchildren who depend on older relatives have the means to help maintain their lifestyle should a grandparent pass on.
Statista, AARP
Questions to Ask When Purchasing Life Insurance Coverage for Seniors
However, the most appropriate life insurance policy for you may depend on your expectations and objectives–for example:
- What level of life insurance coverage do you require, and which payouts or benefits matter most to you when selecting a life insurance policy?
- Do you have a fixed budget available to pay insurance premiums, or is there a minimum death benefit you require with your whole life policy?
- Are the rates for your preferred life insurance policy affordable for you, and are there any health-related circumstances that may impact your life policy decision-making?
We advise you to speak with an experienced, licensed insurance advisor should you need assistance evaluating your whole life options or deciding on the right policy for you. Life insurance companies may offer free policy quotes, so that you can understand how much you will pay each month for the policy and compare policies.
Understanding Guaranteed Universal Life Insurance Policies for Seniors
Guaranteed universal life coverage is an insurance product that can be purchased at a lower expense than other universal life insurance options, with a primary focus on a payable death benefit rather than accumulating a cash value within the policy. Insurance applicants who are seniors may choose this insurance policy since the ability to accumulate cash value is less of a consideration than it would be for a younger person, given the potentially smaller period the policy would have to grow.
The guaranteed universal life insurance policy that’s best for you will vary based on your circumstances and requirements, but in most cases, this insurance coverage offers lifelong protection, policy premiums that are typically more affordable, and a way to help make sure your family is taken care of through the death benefit.
Costs of a Whole Life Insurance Policy for Seniors
Insurance costs naturally tend to increase with age. Still, the possible advantage of a whole life or a guaranteed universal life insurance product is that policy applicants may be eligible as seniors. However, whole life policy availability is dependent on their assessed insurance risk. If you are looking to get a life insurance policy, an insurance advisor can help you determine what you will qualify for and the final expense for the whole life or term policy.
The Benefits of Guaranteed Universal Life Insurance for Retirees
Guaranteed universal life insurance coverage is designed to last for life, in a similar way to a whole life policy. Seniors may find this life insurance policy feature beneficial when searching for cost-effective life insurance that does not have an expiry date.
Lower Costs for the Life Insurance Policy
While guaranteed universal life insurance does not generally build cash value, forgoing this policy feature often makes insurance coverage more affordable, particularly for insurance applicants who have encountered high estimates for other kinds of life insurance policies.
Stable Insurance Death Benefit
This insurance coverage ensures that the benefit payable at death remains stable and assured provided you comply with the expense payment schedule and any other insurance policy conditions (based on the claims paying ability of the issuer). Note that missed or late payments may impact your whole life insurance policy coverage.
Flexibility to Modify Insurance Coverage
In some cases, you have the flexibility to modify your insurance coverage, which can be useful should your policy requirements change or if you would like to customize your life insurance.
The primary advantage of guaranteed universal life insurance for seniors is that the policy does not run for a set period before expiring and typically has a lower cost for coverage than indexed or variable universal life policies because these kinds of policies aren’t designed to build cash value. The whole life policy typically guarantees a payout of the death benefit, provided the policy is in good standing when the insured person passes away (guarantees are based on the claims-paying ability of the issuer).
Comparing Life Insurance Products for Seniors
Insurance can be a viable solution in later life if you require the assurance of having a policy that can pay a suitable value to your beneficiaries and cover any financial obligations that may have otherwise been difficult to cope with. For many seniors and retirees, their long-term financial liabilities decrease, and they may have retirement policies and savings as a financial cushion and own their property without mortgage debt to worry about.
However, end-of-life costs such as medical and funeral expenses may be high and can exceed the value of your life savings or erode the value of the estate you wish to leave to your loved ones. You may also want to obtain life insurance to help take care of a spouse's or partner's financial needs after your death.
Choosing the Right Life Insurance Benefits for Seniors
Your policy coverage and insurance expense will always depend on your existing resources and assets, whether you require a modest or significant insurance benefit payable to your family, your current age, health, and lifestyle, and what features you wish to add to your policy. For further information about guaranteed universal life insurance, policies designed for seniors, or assessing policies to meet your requirements, you should speak with a trusted financial advisor or licensed insurance agent.