It is no longer novel to us hearing grandparents raising their grandchildren. For grandchildren to be depending on their grandparents, it may be a big problem once they lost one.
Which is why the grandparents and the grandchildren must be co-equally prepared when things run out of control. They say there is never a way to be prepared for death because death keeps no calendar.
Actually, there is one way and that is getting life insurance for our loved ones, our grandparents in this case.
Before we discuss the importance of getting a plan, let’s have a look at the options available for seniors.
Types of Life Insurance Available for Seniors
There are lots of types of life insurance but we will bring them down into two most important components as stated below:
1. Whole Life Insurance
Termed as how it should be understood, whole life insurance is designed for lifetime coverage. Due to its lifetime coverage, it helps on the preservation of the wealth until it is transferred to beneficiaries.
This type of life insurance is a fix model. Meaning, once you set up a premium amount to pay every month, you can no longer change it. You cannot downgrade or upgrade this type of insurance.
2. Universal Life Insurance
It’s a permanent insurance, the only difference it makes with other life insurance, is that it provides you an option whether to lower your payment or raise your payment. Therefore, this type of life insurance is a variant. It may change from time to time.
Which One is Suitable for Grandparents?
It is quite hard for seniors to find a life insurance policy because of their age and health condition.
However, there are only few companies who work with seniors. In most of the cases, grandparents are aged over 85 years and it becomes quite hard to find a suitable policy.
The good news is, there are life insurance for over 85 and with the plan it is possible to cover the funeral expenses and leaving some money for the grandchildren. Jason Peterson of Burial Insurance Pro states ” many seniors will have a plethora of choices when it comes to finding a burial insurance or final expense insurance policy. These whole life insurance products do not require a medical exam, and are fairly easy to qualify for. Having a policy in place simply provides peace of mind knowing that their family will not have to worry about paying for a funeral as the insurance policy will cover this.”
Both of the above policies are suitable for seniors. However, it depends on your needs and choice. If you don’t want to lower your payment, whole life will be the best choice.
Importance in Getting Life Insurance
There are various reasons why we should apply for life insurance, but we will highlight only 10 in no particular order.
1. Security for Dependents
Insurance is a long term investment but it is undeniably a credit aid that could support dependents in terms of funeral expenses and other financial goals, as life insurance serves as a safety net for the beneficiaries. This way education of the grandchildren is secured, since the proceeds of insurance may cover up educational expenses.
The older a person gets, the harder for him to be able to land a job in order to support their grandchildren.
In getting life insurance, the grandparents are given an assurance that their grandchildren’s future is secured. The insurance policy coverage has already noted where the proceeds would go and it always goes to the beneficiary. It is upon the choice of the insured however; on who they will choose as beneficiary.
2. Preservation of Wealth
Life insurance can turn future investments in real life property, stocks, and bonds. The subject of transfer of insurance may be the direct family, and it would be the reason why life insurance has the capacity to preserve the wealth of the family. Life insurance cuts expenses.
Say for example, you set an amount of $1000 for basic needs, without life insurance, the tendency of spending the whole amount is highly probable. On the other hand, if you obtain a life insurance, you’ll be able to preserve that amount because that amount had turn into an investment.
3. Life Insurance Non-Taxable
All types of life insurance are non-taxable, meaning it is free of charge, and therefore beneficiaries may enjoy full benefits the moment they received the proceeds of life insurance.
You are no longer charged of tax insurance fees because it would tantamount to double taxation and which is a prohibited act.
4. Covers Mortgage and Personal Loans
Mortgage is a real or personal property given as a security to satisfy the fulfillment of an obligation. But you would be able to save your mortgaged property if you obtain life insurance.
Say, you loaned $20,000 to a friend, and in order to secure the amount loaned you intend to mortgage a jewelry in your possession.
Having life insurance, you no longer have to worry of losing a valuable jewelry because it gives you the capacity to return the money you owed to another person.
5. Peace of Mind
Everyone wants peace of mind certainly and that is exactly what life insurance can give you. You may be asking; how can life insurance give you peace of mind?
Simple, it makes you go to bed at night not worrying what tomorrow will bring. You won’t be afraid of death knowing something could cover up your financial expenses.
Saying that life insurance covers your financial expenses also means you have the money which you may allot for amusement such as travelling or other types of entertainment.
6. Cover for Health Expenses
Illness comes as a theft and threat in our savings. Most often than not, we lost part of our savings without realizing it due to unexpected illness that comes within the family. But, who needs to prepare for sickness when someone or something covers you up.
The proceeds of life insurance do not only cover financial but also health expenses. There may come a time where our grandparents are at the period of senility and we might need to send them for the care of an institution. Life insurance gives you the capacity to pay services of such institution.
7. Incontestability of Life Insurance
Once a life insurance has become incontestable, the insurer is bound to it for all purposes it deems proper and cannot evade payment.
Life insurance therefore is not that much of a risk, rather, it is very secured since it is protected by incontestability clause.
8. Protection Function of Life Insurance
While a policy is in force, how can life insurance company agrees to pay whenever an insured die? First is the fact that all insurance is a matter of pooling, of group sharing of losses.
For every insured who dies in a year, there are other new insureds who are not expected to die and will pay premiums for that year. Which makes it almost impossible to lose funds for every insured’s beneficiary.
9. Savings Function of Life Insurance
Through the medium of life insurance, hundreds of thousands of individuals have accumulated savings while providing financial protection for their families. These savings are pooled by insurance companies and injected back into the financial bloodstream of the economy in the form of investments.
Apportionment of policy owner dividends is one of the most important functions of life insurance companies writing participating business.
We don’t know what will happen to us in few minutes. To save the family and grandchildren from financial problems, it will be a wise decision to obtain a life plan as early as possible.