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A term life insurance policy can be a crucial element of any person's long term financial strategy, as it offers a unique way to protect a person's family or investments. Good term life insurance can provide high amounts of coverage without enormous monthly premiums, and many people buy term life insurance well into their golden years; in fact, older term life insurance buyers may even have more of a reason to buy. However, seniors' insurance can eventually become an unnecessary expense, so many older term life insurance buyers should carefully consider whether or not they need their policies before renewing. Here are a few things to keep in mind.
First of all, think about cost. The cost of a term life insurance policy gradually increases with each renewal period, because older policy holders represent more of a risk to insurance companies. They're more likely to die within the periods of their policies, so insurance companies need to charge more in order to offer them policies at all. Over time, the cost of even a low-coverage term life insurance policy can increase drastically, and older
term life insurance buyers may be unable to afford the costs. Some insurance companies may even refuse to offer seniors insurance policies, as they consider the risks too great.
Of course, senior citizens can look for ways to reduce the cost of their term life insurance policies. They can decrease their coverage levels or buy shorter-term policies, and extremely healthy senior citizens can often get great rates well into their later years. However, this may not be a good strategy, as the value of term life insurance for older people is limited. Seniors' insurance is often unnecessary or of a low value due to the investments and retirement accounts that the senior has built up over time. Most seniors have IRAs, 401ks, mortgages, and other investments that could serve the same purpose as a term life insurance policy--they could pay for funeral and living expenses for loved ones or cover the costs of other debts.
There's no right age to stop buying a term life insurance policy, so every senior citizen needs to carefully consider whether or not a policy is worthwhile before a renewal period. Consider all of your investments, not just the insurance policy, and make sure that your insurance limits are set at a reasonable level to avoid overpaying. Look for term life insurance quotes and make sure that your policy is fair. Senior citizens often spend more time thinking about their life insurance policies, and doing so can yield a great financial plan for your golden years.