Is term life insurance for seniors a good option?
While everyone’s financial goals are different, there are some viable reasons why term life insurance may be a good fit for seniors.
For instance, because term insurance offers death benefit protection only (without a cash value component), it can be much more affordable than a comparable permanent life insurance plan.
But the disadvantage of term life insurance for a senior is you can outlive the term, and the policy would expire worthless, leaving you with no coverage.
When a senior buys a term life insurance policy, the first thing they look at is the conversion guidelines.
Conversion options are important because you do not have to prove insurability when converting from a term to a permanent policy. So if you get sick and your term is about to expire, you can convert it to a permanent plan.
For instance, if the plan is not convertible to a permanent insurance policy, the insured – and his or her survivors – could be left “stranded” without financial protection if the insured survives throughout the entire length of the policy. Worse yet, it could be that they are no longer insurable due to age and health at that time.