A Guide to Senior Life Insurance

You’re older, wiser and more accomplished. Years of career advancements, child rearing and home making has led to this point. Fewer financial obligations and the freedom to relax. Your kids are grown, your mortgage is (nearly) paid off and you’re finally comfortable in your own skin. Still, you’ve never completely stopped worrying about the future.

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You worry about how you’ll maintain your current lifestyle after retirement and how you’ll pay for increased medical expenses on a limited income. Affordable insurance for seniors isn’t difficult as long as you know what to look for.

Always start with your needs first. We’ve come up with some questions you might want to consider before you start comparing policies and companies.

Life Insurance for Seniors: Why buy insurance when you’re over 50?

Many people are remarrying and having kids later in life, delaying some decisions they would have made in their 30s, to be made during their 40s. If you still have dependents, you may want to leave them with some sort of financial comfort.

When you become a senior your needs change. You’ve moved through your highest income-producing years and might require some form of income replacement to protect your income as you approach retirement .

Or, you might be considering life insurance because you’re planning an estate or family trust, or you still have business obligations. People are living longer and staying healthier, that’s why people over 50 generally still maintain a level of / purchase life insurance.

If you still wish to maintain some level of protection against living expenses, accidents and illness you might want to look at what’s available.

For 50-somethings, a normal term life insurance policy may be the most affordable way to protect your loved ones as you approach retirement. This type of policy generally pays death benefit if you pass away or if you are diagnosed with a terminal illness. You may only require a lower level of cover if you have already paid down your debts and have no or little financial obligations..

When does life insurance no longer make sense? Generally when all of the following applies:

  • Your funeral expenses are already covered, and
  • You have sufficient savings set aside for retirement, and
  • You have no outstanding financial commitments, and Your children are no longer financially dependent on you, or
  • You have sufficient savings / assets to appropriately cover all of the above

Cover that gives your family financial support in the event of your death, paying out a lump sum to help your beneficiaries pay for your funeral. Generally covers you for $15,000 – $30,000 worth of cover and can be used to cover any final expenses you may have.

This type of insurance pays out a lump sum benefit if, due to an accident or sickness, you are constantly and permanently unable to perform at least two of the below activities without assistance:

  • Bathing and/or showering
  • Dressing and undressing
  • Eating and drinking
  • Using a toilet
  • The ability to get in and out of bed or a wheelchair
  • Moving by walking, wheelchair or walking aid

Provides a monthly benefit if you should become significantly disabled (unable to perform at least two of the above mentioned activities without assistance) due to an accident or sickness, and remain so during and after the waiting period.

Am I eligible for cover?

This may vary between insurers and the type of cover you require, but generally insurance is available to Australian citizens between the ages of 50 and 75, with an expiry age of a 100.
To apply for cover you will need to go through the application process known as underwriting , this process involves answering health related questions and may require a nurse to do a physical exam. If you manage your health with regular exercise and balanced meals, going through this should be no problem (However this is not required for funeral insurance).

What you should consider if you are:

When you’re over 50, or on your way there, your personal and profession goals change as your financial needs do. Many people reach their peak income potential at 50, with employers valuing your wealth of knowledge and experience. However, at this stage of your life it’s more important to focus on where you’re going than where you came from. At age 50 you need to actively prepare for the next half a century of your life by:

  • Paying off your debts
  • Saving for retirement
  • Ensuring you have sufficient income protection to support you during your golden years
  • Consider lowering your life insurance cover as your kids are now more likely to be financially independent and your mortgage will soon be paid off

You can increase your retirement savings by adding to you Super. You can do this a number of ways:

  1. Entering into a sacrifice agreement with your employer.
  2. Making personal contributions to your super fund.
  3. Transferring super from foreign super funds or
  4. You may be eligible for government contributions.

Remember, the more you put in while you are still working the more you will have in retirement.

You’re over 65, you hate being compared to an aging wine and have gotten used to the idea that reading glasses and wrinkles are here to stay. Turning 65 can be an exciting time, with many benefits and should feel like a triumph. Now that you are a senior your needs will change again.

You’ve moved through your highest income-producing years and now probably won’t require any income replacement. So, what can you expect?

  • At age 65 you can access your Super.
  • Most income protection insurance polcies expire at age 65 or 70, depending on the insurer.
  • TPD and Trauma insurance might now be very expensive due to the high probability of claiming & or depending on the insurer definition changed to Modified total and permanent disablement cover , therefore
  • You may want to consider reducing your cover, so at to keep premiums affordable.
  • If you do not have TPD and/or Trauma insurance you might want to consider Living Expense Cover, which will pay you a monthly benefit if you were to become significantly disabled due to illness or an accident.

Over 70 now and a few years into your retirement. All or most of your debt has been paid off, but you are probably on a tight budget and need to consider all expenses.

  • You’ll be more focused on estate planning
  • You’ll only require a low level of life insurance or funeral insurance
  • The TPD and Trauma insurance definition’s has now changed to Modified TPD Cover
  • It’s very difficult to claim on modified TPD at this age, therefore a number of individuals cease this cover during this time.

Some tips when comparing insurers:

1. Don’t buy too much

If you’re over 50 consider your needs, you probably need less insurance today than you did a few years back. You can save a bundle by simply not overbuying. Make sure you know how much insurance you really need before you go shopping. Speak with a specialist; they’ll usually guide you in the right direction.

2. Shop around & compare premiums

Different companies price age groups very differently.. Take advantage of the competitive nature of these companies by getting lots of quotes. Use our quote form below and we’ll get the quotes for you.

To learn more about Seniors Insurance and for tips on choosing an insurer you can trust, please contact us on 1300 135 205.

If you have any questions regarding senior insurance we did not answer in this article, please feel free to ask one of our experts on the topic.

Published: November 5, 2015
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