Senior Living News

Life insurance provides benefits for people of all ages, including peace of mind about the future. But the type of life insurance you might need — or whether you need life insurance at all — depends on a variety of factors. At The Gardens at Barry Road assisted living community, we love to see our residents living a vibrant life with as little stress as possible. For some people — whether they reside in an assisted living community or elsewhere — the right life insurance can help reduce stress and support better quality of life.

Life insurance is a complex topic, and we're certainly not financial advisors. If you're looking at life insurance as an investment, a long-term planning tool or an integral part of your estate plan, it's a good idea to talk to an expert, such as an insurance agent or a financial advisor, about your options. Doing some research yourself to understand more about your options can be a good idea before you reach out to someone official, though. We've started you off with a quick guide to some various life insurance considerations and types below.

Main Reasons People Buy Life Insurance

Your goals for life insurance have a big impact on what type of policy you buy. Here are a few common reasons people of all ages might purchase life insurance.

• To provide for dependents. Individuals who have dependents, such as spouses or children, who rely on their income may buy life insurance to provide continued money should they pass away.
• To pay for debts. Buying life insurance to cover debts ensures loved ones aren't left trying to figure out those bills and how to pay them out of any assets you leave behind, such as a home or family heirlooms.
• As an investment. Whole life policies and other types of life insurance can build cash value that can be borrowed against or cashed out later, making them a potential investment product.
• To cover final expenses. Many older adults invest in guaranteed life insurance policies, which are low-cost policies that don't require a health screening. They're typically available with payouts in amounts that can cover final expenses such as funeral and burial costs.

Type of Life Insurance

You'll find a wide range of life insurance types, but we've provided a summary of some of the more common ones below to help you start thinking about how your financial goals might align with potential life insurance choices.

Term Life Insurance

This is an umbrella term that covers what most people mean when they say they need life insurance or have it. Term policies are in force for a certain number of years as long as the premiums are paid. Employer-sponsored plans are often term life plans, and individuals can buy these plans outside of work situations too.

Usually, terms are set for periods such as 5, 10, 20 or 30 years. Once you have a term policy, you're guaranteed that coverage as long as you pay the premiums and didn't lie on your application. Some term life insurance policies have premiums that remain the same throughout the entire term while others may have fluctuating premiums that can change with your age or health.

Term policies do tend to get more expensive on average — and can be harder to get — the older you are. Being older means you're a greater risk to the insurance bottom line because there's an increased chance they may have to pay out on the policy within the term. Because of this, older adults seeking term life insurance coverage may:

• Buy smaller amounts of coverage. A policy for $10,000 or $20,000 may be possible whereas a policy for $150,000 would be financially prohibitive.
• Opt for shorter terms. If you're 60 years old, an insurance company may not be willing to sell you a 20- or 30-year term life policy. They may, however, have a 5- or 10-year policy.
• Buy specialty life insurance. Some companies specialize in life insurance policies for older adults. These may not require health screenings and tend to be smaller-value policies with shorter terms than regular term life policies.

Note that once the term is up on your policy, even if you paid all your premiums, the coverage ends. You have to get a new term life policy to replace the old one if you want to continue coverage.

Whole Life Insurance

Whole life insurance policies are sold with premium periods of 10, 20 or 30 years, typically. If you make all your premium payments, you keep the insurance coverage for the rest of your life. This makes it a good investment for younger people who may want to ensure they have insurance coverage later in life.

Whole life policies also build cash value. You may be able to borrow from the cash value or convert the policy into cash once you're done paying premiums in lieu of benefits in the future.

Whole life insurance policies can be especially complex and have many unique riders and governing details. Talk to your insurance agent to ensure you understand all the fine print before purchasing such policies.

Guaranteed Term Life Insurance

These are small term-life policies for older adults. They're easier to get than policies that require a medical exam, and some don't turn anyone down. These are often the best option for seniors looking for life insurance to help cover final arrangements.