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What seniors should know about whole life insurance

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Whole life insurance policies come with unique benefits for seniors and older adults. Getty Images

Life insurance can provide vital financial protection for adults of all ages. Despite the conventional wisdom, there are times when life insurance can also benefit seniors. For older adults to get the most out of a policy, however, they should familiarize themselves with the types of insurance on the market and the related costs of those policies. 

The two most well-known life insurance types are term and whole. Term policies only last for a set period of the policyholder's life and they don't have a cash value that the insured can use while alive. Whole life insurance policies, meantime, come with a desirable cash reserve (and protection throughout the insured's complete life). 

Both of these life insurance types have unique benefits and drawbacks for seniors. Whole life insurance, in particular, can be especially advantageous. To secure a cost-effective and valuable plan seniors should familiarize themselves with the nuances of this specific type. In this article, we will break down three important things seniors should know about whole life insurance to better inform their decision-making.

If you're in the market for life insurance then start by getting a free price quote so you know what to expect.

What seniors should know about whole life insurance

Here are three things seniors should understand about term life insurance.

It can be used while they're alive

Life insurance is often thought of as something you set and forget; you'll pay the premiums, keep your policy in good standing and make sure your beneficiaries have all of the account information for the day when they submit a claim. But whole life insurance works differently. 

With a whole policy, seniors can access its cash reserves while they're still alive. This can be used to pay for major expenses, make household repairs or anything else the policyholder wants to use it for. Granted, the amount they withdraw will ultimately be deducted from a final payout. And it will take time to build up the cash reserves. But those factors may be negligible for older adults who like having the option of accessing their policy for emergencies or to pay for major items.

It may be more expensive

The cash reserve access that whole life insurance policies provide won't come without a cost. Because this specific type of life insurance can be utilized while the insured is alive - and because it lasts for the duration of the policyholder's life (not just a period of a few years, like term life insurance), it will generally come with a bigger price tag. The final cost will be determined by a multitude of personal factors as well as the coverage amount the applicant has requested. But be prepared to pay significantly more than you would for most other policies.

If you're a senior looking for life insurance but don't want to break the bank to get it then strongly consider applying for a term life insurance policy instead. Get a free price estimate here to find out what it would cost.

They don't need to take a medical exam to get it

Some seniors may avoid applying for life insurance amid concerns that a medical exam could lead to exorbitant costs. While it's true that most traditional life insurance policies request a medical exam, you don't need to automatically sit for one. If you're worried that the results of an exam could limit what you're offered (and potentially disqualify you in full) then skip the exam and pursue a no-exam whole life insurance policy, instead. No-exam life insurance policies have multiple benefits, not least of which is that they guarantee coverage. Because you're not risking the results of an exam your application will be automatically approved. This will also expedite the process from weeks to potentially days or even hours. 

Just understand that no-exam policies tend to be more expensive than those that incorporate the results of an exam. So if you're healthy and willing to take an exam to prove it you'll generally secure cheaper life insurance than if you skipped this important step in the life insurance application process.

The bottom line

Life insurance can provide important financial protection for adults of all ages, including seniors. Seniors should understand the types of policies available to them to secure the best type for their needs and goals. Whole life insurance could be a good alternative for multiple reasons. Its cash reserve can be accessed when the insured is alive but that access will typically come at a higher cost than other policies. That said, whole life insurance can also be secured via a no-exam alternative in which seniors skip the traditional medical exam and go right to the approval phase. 

Get a life insurance quote here now and learn more.

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