Personal Insurance Considerations for the Elderly
June 23, 2012 Lifestyle

There are a wide range of insurance products on the market providing financial protection for a person or their loved ones in the event of death, disability or the development of certain chronic diseases. Personal insurance is not always a consideration for the elderly who may find that their financial obligations, in terms of a house mortgage or young family, have passed. On the other hand, some seniors become more adamant about maintaining or growing their insurance portfolio. It is a personal decision that has financial implications, and decisions in this regard should not be take lightly.

Starting a Policy in the Senior Years

Insurance policies are best started early in life, especially when one is fit and healthy. Insurers minimize their risk by offering lower rates to younger and healthier candidates. This means that an insurance policy earlier in life is much cheaper than one started in the senior years. Furthermore, the insurer may choose to relinquish liability in terms of pre-existing ailments. Therefore the elderly may be subjected to exclusions in the policy for chronic diseases that they may already be suffering with at the time of policy inception.

Ultimately, this can mean that an older person will pay more and have less coverage than a younger and healthier candidate. It may not seem sensible to start an insurance policy in the senior years, but individual budgets and needs may make it a necessity rather than an option. As with any purchase, there is always the price and quality issue. Insurance premiums and the policy benefits should be weighed out carefully with one’s current needs and budget. Many brokers may be able to do a needs assessment for a senior which objectively looks at the necessity and viability of starting a policy later in life.

Continuing a Policy in the Senior Years

Policies may come up for renewal and reassessment at different times in one’s life. At this point, the premium structure can significantly change if an older person chooses to continue a policy. It may not be as expensive as starting up a new policy in the senior years, but it can still mean a larger expense than one is prepared for in the twilight years, where the budget is often tighter.

An older person should therefore discuss the pros and cons of continuing the policy with a broker. It is important to seriously consider whether continuing to pay for a policy will hamper the quality of life in the senior years and if it is truly needed at this stage of life. Children may have left the homestead and a spouse may have passed on. While passing on an inheritance from a life policy, no matter how small, it may be your last gift to your loved ones. However, it may also not be  feasible to do so.

Ending a Policy in the Senior Years

Terminating a policy should not be a decision that is taken lightly. It is often better to continue with an existing policy than start up with new insurance in the senior years. Sometimes the elderly are misled into buying insurance plans that seem cheaper. However, closer inspection may reveal that the newer and “better” policy lacks the same benefits and has a host of exclusions that would not have been applicable with a previous older policy.

Staying Insured in the Latter Years

Insurance can be confusing for the average consumer. Most of us understand the basic concepts and the importance of financial protection offered by an insurance policy. However, our understanding of the fine print is where misunderstandings may arise. Newer financial products for the ever changing modern lifestyle can sometimes prove to be confusing to the elderly. It is therefore important that insurance matters are discussed with a reputable broker or directly with the insurance provider. Ultimately, it is a personal decision as to whether to amend one’s insurance portfolio, but knowing the facts can save money and spare disappointment at a later stage.

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