| The reasons for buying any kind of life | | | | death benefits when the death is from natural |
| insurance are always personal. What makes | | | | causes. This is to prevent the writing of |
| perfect sense for one person may not add up | | | | "deathbed" policies that insure patients who |
| for another. For example, a 65-year-old man | | | | are terminally ill. If the insured dies |
| wants to buy a million dollar life insurance | | | | within the first two years of the policy, |
| policy. He doesn't have to insure against | | | | most insurance companies will pay the |
| lost income. He doesn't need to pay off his | | | | beneficiary the premium amounts plus interest |
| home. He just wants to leave behind a large | | | | as a death benefit, but not the full face |
| amount of money for his family. It's his | | | | value. Accidental death-from an automobile |
| dream. Since he can afford it, it's his | | | | accident, for example-is covered as soon as |
| choice. | | | | the policy is written. |
| | | | |
| Life insurance usually is intended to | | | | Another unconventional type of policy is the |
| maintain a family's lifestyle in the event | | | | single-premium life insurance policy. The |
| that one or both of a family's wage earners | | | | premium is paid upfront in a lump sum and |
| dies prematurely. Most seniors do not have to | | | | covers the policyholder until death. |
| worry about this. The vast majority are no | | | | Depending on the age of the policy holder, |
| longer providing for their children. Many | | | | the death benefit can be two or more times |
| have already paid off their homes or have | | | | the amount of the single premium. Since life |
| sold them for a profit and moved into a more | | | | insurance death benefits usually are exempt |
| affordable housing. The traditional reasons | | | | from estate taxes, many seniors use a |
| for life insurance may not apply, but some | | | | single-premium life insurance policy as a |
| untraditional ones may. | | | | tool to pass on wealth to their heirs |
| | | | tax-free. |
| Some seniors are concerned with final | | | | |
| expenses-funeral and burial costs. These | | | | Some single-premium policies can include a |
| costs have risen dramatically in the last | | | | provision to pay for certain kinds of medical |
| decade or so. Some seniors who thought they | | | | care, such as nursing home care or hospice |
| had saved enough for final expenses or had a | | | | care. In this sense, the policy functions as |
| small life insurance policy to cover them are | | | | a kind of long term care insurance. Any money |
| finding that they might come up short. They | | | | remaining in the death benefit at the time of |
| can take out final expense policies. | | | | the policyholder's death is passed on to the |
| Generally small, some final expense policies | | | | beneficiary. |
| do not require a physical. They are known as | | | | |
| "guaranteed acceptance" policies. | | | | Most seniors do not need life insurance for |
| | | | the traditional purpose of income |
| To minimize risk on the guaranteed acceptance | | | | replacement, but some seniors decide that |
| policies, insurance companies often require a | | | | life insurance is a tool that can help them |
| two-year waiting period before paying full | | | | realize their final goals and dreams. |