How to Choose Life Insurance for 55 and Over Rental Communities in Ocean County, NJ
Buying life insurance is one of the financial decisions that some people make when they are young. What if you’re planning to purchase one when you’re 55 and over? Rental communities in Ocean County, NJ — such as Barnegat 67 –provide the required amenities for comfortable living.
However, life insurance is also an aspect that cannot be overlooked, though it can become more expensive and complicated due to age. This is because there’s a higher risk that the insurance company will have to pay. According to Investopedia, age affects the life insurance rate. The premium account increases on average about 8% to 10% for each year added to your age. If you’re in your forties, the increase can be as low as 5% annually and as high as 12% if you’re over 50. Your age also determines whether you will qualify for insurance coverage at all.
What Is Life Insurance?
A life insurance contract is between an insurer and a policyholder. The insurance firm guarantees payment of a death benefit to named beneficiaries when the insured dies. The insurance company offers a death benefit in exchange for premiums paid by the policyholder.
The policyholder is required to pay an agreed amount to the insurance company monthly or on an annual basis. The amount you pay is known as a ‘premium’. It is to be paid to the insurance company for a specified number of years.
The insurance company will pay a tax-free lump sum amount to your heir or any member of your family that you nominate after your death. In this way, your death does not cause financial distress to your family.
While you may buy other insurance types to provide for you in times of financial hardships, life insurance offers for someone else after you are gone.
Benefits of a Life Insurance Plan
If you’re 55 and over in rental communities in Ocean County, NJ, the following are reasons you may buy a life insurance:
To Protect Your Financial Dependants: Life is full of uncertainties. Unexpected occurrences, such as an accident, illness, or even natural causes, can put an end to the financial support you’re giving your loved ones. Life insurance enables your loved ones to pay the bills, mortgage, and even education fees, thus reducing financial stress. It is also useful in settling estate and death duties or as an inheritance. First, determine if you have financial dependents. Then examine the amount of money that would be sufficient to replace what you are currently giving them.
Some Life Insurance Policies Earn Dividends: Some policies earn dividends and accumulate interest. It can also be a financial backup to set off unforeseen expenses or to secure loans. A few permanent life insurance policies enable the terminally ill to use most of the policy’s value through living benefits. As such, when choosing life insurance, look for a plan that fits your priorities. Are you looking for a smart investment strategy that leaves behind a financial legacy? Or do you want a death benefit that will cover funeral expenses?
To Resolve Business-Related Financial Obligations: Life insurance is not only for individuals. It can help protect the business you’ve worked so hard to build. In the case of a permanent disability or illness, a life insurance policy can be used to run the company seamlessly, defending against financial loss. As such, business handover doesn’t become a significant deterrent in case of untimely death. Besides, it allows senior citizens who intend to start a small business to move forward with optimism.
It Makes Financial Sense: No matter what condition your finance is in today, an unexpected event can unravel it in no time. With an insurance payout, your family will continue to move forward. Besides, life insurance is considered an asset. Some policies have a cash value that creditors can’t take over. Others can help you get a loan or health insurance.
Getting Life Insurance Over 55
When it comes to getting life insurance, premiums increase as you age. Seniors usually have to pay more. In other cases, you will have to jump many hurdles.
Also, many life insurance companies set age limits for buying specific policies. You would have to go through underwritings. The process requires answering health-related questions. A nurse or doctor will also carry out a physical exam to ascertain the state of your health. You will also give access to your health records.
Seniors over 55 who are smokers or have moderate health troubles may be able to get life insurance. However, it will cost more than what a non-smoking, healthy senior would do.
Also, the older you get, only shorter-term policies may be available to you. For example, many companies don’t offer 30-year term policies at age 50 or 55. The options keep decreasing with each year that passes. As such, a senior over 70 years will be limited to a 10 to 15-year policy. Each company has its standards and what medical conditions it accepts. Seniors in over 55 rental communities in Ocean County, NJ, should endeavor to get quotes from multiple insurance providers to get the best for their needs.
Components of Life Insurance
Life insurance involves a death benefit and a premium, while whole life or permanent insurance policies also have a cash value component,
Death Benefit – This is the amount of money that an insurance firm guarantees to the beneficiaries specified in the policy when the insured dies. This insurance company, on its part, will determine if you qualify for the coverage based on the firm’s underwriting requirements related to age and health.
Premiums – Premiums are the amounts that an insured person pays during the insurance term. It could be yearly or monthly. Factors such as medical history, life expectancy, age, occupational hazards, high-risk hobbies, and gender determine how the insured pays as premium. Also, premiums are higher when the insurance policy entails higher death benefits, if it’s a permanent policy that accumulated cash value, or if the individual is higher risk.
Cash Value – A permanent life insurance has cash value. It is a savings account from which the policy holder may withdraw money during the insured’s life. Some policies may have limits on withdrawals, depending on how the money is to be used. For instance, a policyholder may take out a loan against the policy’s cash value or use the cash to pay premiums or buy additional insurance.
Types of Life Insurance
Here are the different types of life insurance policies, depending on your circumstances or priorities:
Guaranteed Universal Life Insurance: This is the most commonly marketed to seniors. It doesn’t require medical examinations or medical records. As such, you cannot be turned down for it. However, the price is high since there’s no medical information about you. Rates are based on gender, age, and coverage amount. This type of policy is good for smaller expenses, such as cushioning the expense of estate taxes or paying for a funeral.
Term Life Insurance: Term life insurance is an excellent option for most people because it is the least expensive. Though this type of insurance is more suitable for younger people, healthy older adults can also consider it. It offers insurance coverage for a specific number of years at a fixed price. You’ll pick the amount of coverage you want and the length of the policy.
Whole Life Insurance: Like its name, whole life insurance provides coverage for your entire life with guaranteed premiums. It is a way to ensure your beneficiaries will get a payout, no matter how long you live. You cannot outlive your policy, and there is no specific term length. Also, a portion of your premiums goes into a cash-value account. You can borrow against it or withdraw cash. Though it has high premiums, it is useful for older adults who want a safety net for loved ones.
Annually Renewable Term Life Insurance: These plans are like term life insurance, but the premiums increase each year. It could be suitable for short-term insurance of two to four years to offset income loss. Maybe you are about to complete your mortgage payments or on the verge of retiring. Most annually renewable policies don’t require that you requalify each year based on your health. And the insurance firm usually discloses the fixed term amount you pay as premium. While most seniors may not need this type of insurance, it could save you money. Instead of purchasing a regular five- or 10-year term policy and canceling it later, you’re only paying for your current risk.
Burial Insurance or Final Expense: A burial insurance policy is whole life insurance with a small death benefit. It provides a small amount, usually $5000 to $25,000, to cover funeral expenses. Though you may have to complete a health questionnaire, you won’t need to complete a medical examination. This makes it suitable for those with serious health problems. It can help offset the costs you’ll leave behind in 55 and over communities in Ocean County, NJ.
Universal Life Insurance: This type of insurance provides coverage for death but is tied to how well the policy performs in investment. For this reason, it is known as non-guaranteed universal life insurance. If your investment falls flat, you have to pay higher premiums. It’s for risk-takers who want to assume some risks for higher rewards. The cash value aspect of a universal insurance makes it expensive. Besides, the rates are not guaranteed, and the policies have costly management fees.
To determine the best life insurance company, consider the financial stability ratings, history, and experience in offering policies to 55 and over. Communities in Ocean County, NJ have many options when it comes to buying insurance policies. For residents of Barnegat 67, consider examining the variety of products offered by the insurance firm and the flexibility of policies before purchasing a life insurance policy.