Life insurance is among those necessities that everybody should consider having. But with so many life insurance options and conditions imposed, getting the right policy can be quite intimidating. That is why people seeking life insurance are advised to tread with caution in order to land policies that fully meet their specific needs. As a senior citizen, purchasing a life insurance policy can be trickier and costly. Remember as we age, we become too vulnerable to death. Typically, when it comes to life insurance for the seniors, great care needs to be observed. This article expounds more on guaranteed universal life insurance and why it is the best for the elderly.
What is Guaranteed Universal Life?
Guaranteed universal life insurance, also called no-lapse universal life insurance, is a form of permanent life coverage with unique features. This kind of policy provides a guaranteed death benefit at a guaranteed fixed price. This is only possible if the policyholder continues to pay premiums defined in the policy on time.
Typically, most of the universal life insurance plans being sold are guaranteed up to 121 years. The concept behind the whole thing is that they offer lifetime protection. In addition to permanent protection, policyholders tend to understand the proposed premium beforehand. Thus, there is no confusion whatsoever down the line. As long as you adhere to the payment of your monthly premiums, you are fully guaranteed that the policy will not lapse.
Features of Guaranteed Universal Life Insurance
There are certain guarantees with GUL policies. Such assurances tend to favor the elderly. For instance, GUL premiums will remain the same during your policy, which is a positive thing for the seniors, especially those with weak financial muscles. Another thing is that GUL is a safe insurance policy. This means it is prone to market fluctuations. Thus, premiums are defined without any surprise increases in premiums.
Also, premiums can be set for a long time. This can go up to 121 years of age. A death benefit is guaranteed regardless of how long you are going to live. You can select the age of maturity of your policy. For instance, there are options for GULs to ages 90, 95, 100 and 121.
As a senior, it is good to select the highest age option in order to reduce the risk of outliving your policy. Most people would want to avoid outliving their policies. This is because if they do, they will be required to re-purchase another policy, probably at a higher premium than the previous one.
How Does Guaranteed Universal Life Insurance for Seniors Work?
One of the reasons why seniors opt for GUL is because of its simplicity in design. The GUL is actually a very simple life insurance product to understand. Generally, this type of policy operates just like a term policy whereby guaranteed premiums and death benefit are offered. The good thing about GUL is that the coverage periods can be customized to last a lifetime. This is good, especially for the seniors who anticipate living beyond 90 years. This means they can structure the coverage to last different ages, such as 90, 95, 100, 105, or even 121.
It is good to note that the premiums to be paid depending on the selected age bracket. For instance, a person who selects age bracket121 will definitely pay more than the one who chooses 95 years. And since premiums are leveled throughout, seniors are advised to choose term lengths that they are sure they can manage to pay their premiums. This is important because late premium payments may cause big problems with your GUL policy.
Why Guaranteed Universal Life Insurance is Ideal for Seniors
The seniors mostly purchase guaranteed universal life insurance policies. The ability to leave a legacy to their loved ones, enjoying level premiums, and getting a policy that will outlast the entire life are some of the top reasons why older adults never try their backs on GUL.
This type of permanent life insurance policy has unique characteristics that are found in both term and whole life. Some of these top features are discussed below:
- GUL is quite affordable. Most of the seniors might not be able to afford premiums for other forms of permanent policies, such as traditional universal and whole life insurance policies. As such, GUL can be an ideal option for such people who are overwhelmed financially.
- Its simplicity in design makes this particular policy perfect for the elderly. As we grow old, our minds usually become less active. And for that reason, an older adult does not need anything that is going to complicate him or her. So, GUL could be an ideal option since you only need to make an application, pay your premiums, and get covered right away. This is something any senior person can understand.
- Again, GUL policies are safe and secure since they are not depended on the financial market. This means they are not affected by the market fluctuations whatsoever. The premiums are defined at the start, and there will be no any surprise increases in the rates. This is a great favor for the seniors considering that most of them have tight budgets.
- Also with GUL, seniors can select the highest age to reduce the risk of outliving their policies. Outliving your policy is something you should avoid at all costs. If you happen to outlive your policy, you will have a chance to purchase another policy, but at a higher price than the previous one. So, it is highly advisable to choose the highest age bracket to avoid the problem of outliving the policy.
- The elderly can easily cope with leveled premiums. Remember that most of them depend on pensions, and therefore a slight increase in premiums may lead to inconsistency in the payments. So, GUL is better than term life since premiums remain the same throughout the covered duration.
- Again, seniors are highly exposed to death. This is because they are mostly neglected and minor ailments can easily drive them to the grave. That is why they need a policy with guaranteed death benefit so they do not leave their loved ones in financial difficulties when they die.
- Given a maximum length of 121 years, it is evident that the policy’s length is going to outlast your life. For older adults, this is good because they are pretty sure the coverage is for a lifetime.
Why Should Seniors Have Life Insurance?
For those who wish to leave a more significant amount for their families, GUL is the best option. The main reason for purchasing life insurance will help you make a sound decision on which type of policy to go for. Some of the common reasons why seniors need life insurance coverage include the following:
- For debt coverage. Your life insurance policy is going to cover any debts or bills you leave behind when you die. You need to choose a good policy with a guaranteed death benefit. By doing so, there will be enough money to cover any outstanding debts, such as a mortgage.
- You may be having dependents. These are people who used to depend on your income. In the event of your death, they need not face financial problems. With a good policy that has guaranteed death benefit, your loved ones can be assured of living an even better life.
- A significant death benefit can act as a legacy to leave your loved ones or charity organization. This is important because you will remain a hero for your good deeds.
- Helps take care of your funeral expenses. A death benefit helps cover your funeral costs. There is no need of burdening your family financially during your funeral. Part of the death benefit from your GUL policy should go to catering your funeral expenses.
It is vitally important to decide on the amount of death benefit that you want when purchasing guaranteed universal life insurance. For most seniors, a high death benefit is not that important. If all that you need is an amount to cater for your funeral costs or clear outstanding debts, then a coverage amounting to $100, 000 is more than enough. But if you want to leave behind a significant amount for your family, then you can opt for a company that is willing to offer coverage for an amount of up to $10 million or more.
Make sure you check on the time length of your GUL policy when making your application. Even though a policy covering up to 121 years will have a higher premium, the death benefit will be huge, and vice versa. If, for instance, you need a short-term coverage, you may opt for term life because it is more affordable as compared to GUL. But if you want to enjoy longer policy duration, then GUL is a better option because you can be covered up to 121 years of age.
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