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Options for insurance in your later years

Kelly Kowalski, Cliff Noreen, and Bronwyn Shinnick

Posted on May 31, 2023

Our executives and experts team up to write educational articles, covering a variety of financial topics such as life planning, college savings, and retirement.
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Detail the two types of life insurance those in later years looking to help their families with final expenses often turn to.

Note that other life insurance options with more flexibility may be available, depending on individual circumstances.

Point out other ways to defray the costs of final expenses when life insurance may not be available.

If you’re approaching or in your golden years with no savings or life insurance in place, your loved ones may struggle to cover your final expenses, such as outstanding bills and funeral arrangements. No one really wants that to be their legacy.

So, you may want to explore simplified issue whole life insurance (SIWL). This type of insurance offers affordable coverage to people in a later age range, typically around 40- to 80-years old, to help with final expenses like funeral costs, medical bills, and other debts. With this insurance, someone can help insulate his or her family from financial burdens that may arise from his or her passing on.

Generally, to qualify for simplified issue whole life insurance, an applicant has to answer a number of medical questions, but doesn’t have to go through a full medical exam. The answers to those questions will determine the applicant’s ability to qualify for SIWL and the cost of the coverage.

Seniors who don't qualify for simplified issue whole life coverage may want to look at the possibility of another type of insurance, guaranteed acceptance life insurance (GALI), typically offered to those between the ages 50 and 75. This kind of coverage is available regardless of health, although the cost of a policy tends to be higher than other types of insurance.

Just like with any other insurance policy, the policyholder lists one or more beneficiaries. Those beneficiaries can use the eventual payout in any way they choose, though these policies are usually purchased with the intent to cover the policyholder’s final expenses, such as funeral costs, credit card or medical bills. (Related: Beneficiary mistakes)

Unlike whole or term life insurance, these types of life insurance policies are only available to people over a certain age.

Considerations before buying SIWL or GALI

Sound too good to be true? If you’re considering going for these kinds of insurance coverage, there are some things you should be aware of.

First, while these policies can be a good option for someone looking to lighten the burden on their family after they’re gone, they don’t have the full range of a more robust life insurance policy. The tradeoff for simplified or guaranteed insurance policies, unlike traditional life insurance policies, is that they don’t offer much in the way of cash value. These policies can be designed specifically to cover final expenses, so the coverage amounts tend to be small relative to other life insurance products and cash value accumulation is minimal. (Learn more: Cash value explained)

That helps to make the premiums more affordable depending on the level of coverage you choose, but it also means that a simplified or guaranteed policy is not the product you’d buy if your goals include tapping into the policy’s cash value while you’re still alive or leaving an inheritance behind.

Potential buyers should explore other options available before going for a such insurance. Consider the plight, said Jeremy Hallet, CEO and founder of Quotacy/Hallett Financial Group in Minneapolis, Minnesota, of a person who starts to get nervous when they see a TV commercial talking about paying for final expenses.

“You are healthy,” he said in an email interview, “or maybe you have a morbidity-type disease like diabetes, or you have had a stent put in your heart, but otherwise you are in pretty good health. There may be other plans available for those consumers that will be less expensive” than such policies, particularly a GALI policy.

As with any protection product, it’s important to do your research before buying. (Need financial advice? Contact us)

Who are such policies for?

Simplified and guaranteed acceptance life insurance policies are designed to meet the needs of people approaching the end, who worry they don’t have enough savings to cover final expense costs, and want to avoid placing that burden on their family. (Learn more: Memorials and crowdfunding shortcomings)

This option may be just right for someone who can’t get a more traditional policy, either because a pre-existing medical condition makes them ineligible or because their age would make a traditional policy’s premiums prohibitively expensive.

For those in a position to write a check or set aside some extra savings, pre-planning and pre-paying for at least some of your funeral is a good way to help your family through a difficult time. But those who lack that financial leeway may find an SIWL or GALI policy’s monthly premiums more manageable, depending on the coverage amount desired.

Such policies may also appeal to those on a budget who still want a little extra flexibility for their family when the time comes to pay final bills. Because SIWL or GALI policies pay out to beneficiaries who can then decide how best to put that money to use, you may find them a more appealing and flexible alternative to making payments to a specified memorial contract.

SIWL or GALI life insurance may be a good option for those who can’t afford or don’t qualify for a more traditional life insurance policy, but it’s a good move to do some thorough research before you make any decisions.

Learn more from MassMutual…

How much life insurance do I need? (Calculator)

Got a will? Why you should …

How to score some sweet senior discounts

This article was originally published in March 2017. It has been updated.


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The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.