Senior Insurance

What is Final
Guide
Expense Purchasing
Coverage? Life Insurance

What is
Simplified-Issue
Life Insurance?

6
Things to Avoid
when Shopping
for Life Insurance

Understanding
Final Expense
Life Insurance

The Importance of Planning Ahead

Table of Content
Understanding Final
Expense Life Insurance 3
Defining the Terms  3

Understanding the Different

Types of Life Insurance 4

What is Final
Expense Coverage? 4

What is Simplified-Issue
Life Insurance?  5
What about Guaranteed-Issue
Life Insurance? 5
Purchasing Life Insurance  6

Informing Your Beneficiaries 6

The Importance
of Planning Ahead 6

Final Expense Life Insurance

Options for Specific Situations  7
Things to Avoid when Shopping
for Life Insurance 8
 Senior Insurance Guide 3

Understanding Final
Expense Life Insurance
L
et’s face it - consumers tend to have a
negative perception of life insurance.
Maybe it’s because of its association with a
negative event, or maybe it’s because of the very
nature of the industry. Either way, life insurance
is not a popular topic of discussion.
Now, the Covid-19 pandemic has forced
Americans to acknowledge the unpopular
reality of their own mortality, not to mention
the financial hardship often faced by those they
would leave behind.
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Suddenly, the much-maligned insurance
industry has been brought squarely into focus.
The discussion has primarily been on the needs
of younger individuals, but what if you’re older?
Is life insurance still an option for you?
Of course!
But life insurance, while sounding simple,
actually has many variables to consider,
especially for seniors. In addition, the process
and terminology can be confusing.
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Defining the Terms

Life insurance, just like any industry, has a
language all its own. Understanding a few key
terms will make the process of finding the right
policy easier.

l Insured - the individual covered by the life

insurance policy.

l Premium - periodic payments made to the

insurance company to keep the policy active.

l Underwriting - the process that the insurance

company uses to assess an applicant’s risk
profile and determine a premium amount.
Your age, gender, and medical information
are the major things considered as part of the
insurance company’s review.

l Death benefit - a lump-sum cash payout from

the insurance company upon the death of the
insured.

l Beneficiary - person(s) or entity named in the

life insurance policy that receives the death
benefit upon the death of the insured.

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4 Senior Insurance Guide
Understanding the Different
Types of Life Insurance
Life insurance can be divided into two broad
categories:
1. Term life insurance, which only lasts for
a certain period of time. The simplest form of
insurance, it will pay a death benefit to your
designated beneficiaries while the policy is in
force. It’s the least expensive type of life insurance.
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What is Final Expense Coverage?
One type of permanent life insurance is known
as final expense coverage. This type of insurance
pays a lower death benefit ($2,000 - $35,000) than
others, so the premiums can be more affordable.
If your funds are limited, you may want to
consider this type of coverage if
l You don’t have life
insurance, and you don’t
have enough savings
to cover your final
expenses. This will
leave your family with
a financial burden
when you die.
l You have enough life
insurance, but you
want to pay less for your
coverage because every
dollar matters.
l You have some life insurance, but you
want more coverage, hopefully for the same
monthly cost.
Many applicants mistakenly believe that they
could never qualify for a policy that requires
medical underwriting. But, different insurance
companies have different underwriting
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Table of Content
2. Permanent life insurance, which will last
the lifetime of the insured. This type of insurance
will pay a death benefit, and it will usually allow
you to build up some cash value.
Naturally, for either type of policy you must
pay the premiums to keep it from lapsing.
requirements and risk tolerance. Depending
on your health and the requirements of the
particular insurance company, you could still
qualify for coverage.
When you apply for final expense coverage,
your age, your medical history, and
your budget will all play a role in
determining the right policy for
you.
Underwriting for final
expense coverage is
handled as part of the
application process. While
you should know right
away whether or not you
are approved for the policy,
some companies may take
a few days to review your
application.
If for some reason your approved
coverage amount comes back as “other
than applied for” due to your medical history,
the company will either lower the coverage
amount to accommodate the agreed-upon
monthly premiums, or they may ask for a higher
premium. In either case, you will need to sign an
amendment to the original agreement.
 Senior Insurance Guide 5

What is Simplified-Issue
Life Insurance?
Another type of permanent life insurance is
called simplified-issue life insurance. Designed
for healthy individuals who don’t want to take a
medical exam, the short application for this type
of coverage asks few, if any, medical questions.
The insurance company may also review
electronic records like your driving history,
your background, and any available medical
information.
Simplified-issue life insurance can be obtained
within a few hours or, at most, in a few days. In
comparison, traditional life insurance requires
full medical underwriting and has a 6 to 8 week
waiting period before the policy becomes
effective.
Because the life insurance company is taking
on a bigger risk by not administering a medical
exam, coverage amounts are capped anywhere
from $250,000 to $500,000. In addition, the
premiums will be higher when compared to
those for traditional life insurance.

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What about
Guaranteed-Issue
Life Insurance?
Another option for final expense coverage
is a type of permanent life insurance known
as guaranteed-issue life insurance. Also called
guaranteed acceptance insurance, the simple
application process for this coverage does not
require a medical exam or even ask health-
related questions.
l Available coverage amounts are very low,
usually between $10,000 and $25,000.
l Because you can’t be turned down,
guaranteed-issue life insurance is one of the l In the event you die in an accident, the
most expensive ways to buy life insurance. insurance company will pay the full coverage
l These policies usually have graded death amount, even if you just bought the policy.
benefits, which limits the amount of the death l Some guaranteed issue policies build cash
benefit that will be paid for the first two or value, which you can access through a policy
three years of the policy. If you die for any loan. If you don’t pay the loan back before you
reason other than some type of accident, pass away, the payout to your beneficiaries
your beneficiary will most likely only receive will be reduced by what you owe.
a refund of the premiums you paid, plus l Even if you have built up some cash value, the
interest, typically around 10%. payout to your beneficiaries would only be the

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6 Senior Insurance Guide
Purchasing Life Insurance
No matter the type of life insurance, you can
purchase a policy in one of two ways:
lD
 irectly from the life insurance company.
You can call them, go online, or work with one
of their dedicated agents.
l From an independent insurance broker.
Because brokers don’t have contracts with spe-
cific insurance companies, they can offer you a
broad range of options.
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No matter your life insurance needs, we’re here to help.
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Table of Content
No matter what, be honest when complet-
ing the application form for the life insurance.
If upon your death the information that you
provided is proven to be fraudulent, your ben-
eficiaries will not receive any payout from the
insurance company.
Because every insurance company is different,
you may want to apply for life insurance from
several different companies and then select the
one that best fits your needs. An insurance bro-
ker can assist with this.
Informing Your
Beneficiaries
Finally, once you’ve purchased your life
insurance, be sure to tell your beneficiaries
about your policy.
l They need to know the name of the company
that issued it, where a paper copy of the policy
is located, and your intended purpose for the
death benefit.
l Otherwise, despite your best intentions, the
death benefit will go unclaimed.
The Importance
of Planning Ahead
While life insurance and final expenses
are unpopular topics, take the time now to
plan ahead. Don’t put it off any longer. Your
preparation will be deeply appreciated by those
you leave behind.
 Senior Insurance Guide 7

Final Expense Life Insurance

Options for Specific Situations
1 For seniors with a Direct Express Card connected to their monthly Social
Security payment, Transamerica is one of the few top companies that will
allow you to use it to pay life insurance premiums.

2 For seniors who have no or minimal health complications, three top

insurance companies to consider are Assurity, Foresters, and Oxford.
Applying over the phone for coverage from one of these companies can
result in a lower premium than choosing a different company just to avoid
answering medical questions.

3 For those with COPD, Transamerica has the most favorable underwriting
guidelines.

4 For Type 2 diabetics who are on Metformin (not insulin), both

Transamerica and Foresters offer very competitive rates.

5 For individuals who have major health conditions and are unable to qualify
for level premium plans, Mutual of Omaha offers a guaranteed issue policy.

We can help you navigate the entire

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8 Senior Insurance Guide

Things to Avoid when

Shopping for Life Insurance
1 Selecting a policy solely based on price. Instead, look at the overall value, such
as the customer service available, or the amount of coverage offered based on
your individual health factors.

2 Considering life insurance as an investment. Policies that allow you to build

cash value typically have high premiums, hidden fees, and expensive penalties.
A traditional investment vehicle like a 401(k) or IRA would be a better option.

3 Agents that offer only one type of policy, or offer policies from only one
insurance company. This limits their ability to really find the best option for you.

4 Pushy salespeople who want you to make an immediate decision. You

should feel comfortable taking the time to fully understand the policy before
finalizing your purchase.

5 Insurance companies that are not financially sound. This could negatively
impact their ability to pay claims or meet other financial obligations. AM Best
is a credit rating agency that specializes in the insurance industry.
www.ambest.com. A life insurance company will usually list their AM Best
rating rating on their website.

6 Going it alone. You run the risk of being overwhelmed by the large number of
insurance companies to choose from and the many factors to consider.

We can help you easily avoid the pitfalls of choosing life insurance coverage.
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