Seniors insurance in Canada can be confusing and overwhelming, and often, it’s hard to know what you need or want. North Americans are living longer than ever before, so having a solid financial plan and seniors insurance is crucial. As you get older and start to think about retirement, you also begin to think about making sure your family is taken care of and won’t be burdened with unexpected financial debts.
Recent studies show that more seniors are carrying debt into retirement. If you are over 50 and have not looked into a seniors insurance quote, don’t panic! It’s not too late! No medical life insurance for seniors is a good option and can help pay for final expenses like debt, loss of income and funeral-related expenses.
What is no medical life insurance for seniors?
No medical life insurance for seniors is commonly purchased by adults over 50 to cover the cost of final expenses, including funeral costs. Unlike other whole life insurance, the policy typically has less coverage (face value) and does not require individuals to undergo a medical exam prior to being approved. There are two types of no medical life insurance:
Simplified issue life insurance: This policy does not require a medical exam but still requires applicants to answer some health-related questions. Typically, the longer the health questionnaire, the lower the insurance premiums. On average, this type of policy has a limit of $150,000, and if you were denied life insurance in the past two years, this policy might be not available to you.
Guaranteed issue life insurance: This policy has neither a medical exam nor a health questionnaire to answer. It is available for you even if you were declined for a traditional policy in the last two years. Typically, the coverage (face value) will be limited to $25,000 and there also are a few limitations in terms of payouts if the insured dies within the first two years.
Things to consider when purchasing no medical life insurance for seniors
- Insurance premiums will typically be lower at your current age versus when you get older. Today, many insurance companies offer life insurance to people up to age 85. However, the rates will vary significantly between 65, 75 and 85 years old.
- The price for life insurance for seniors increases drastically as they get older and closer to the end of their life expectancy. This means the difference in cost between 71 and 70 years old is much more than the difference in cost between 41 and 40 years old.
- Seniors considering life insurance should compare the differences between individual life insurance and creditor insurance (e.g. mortgage insurance through the bank). Many creditor insurance plans end at age 69, so people who are approaching retirement or currently retired and in good health should consider individual life insurance options and get a seniors insurance quote. Individual life insurance is portable, so if you switch banks or move to another home you can maintain your coverage.
- Preferred rates can save you up to 35 per cent and are available to those in excellent health and with a good, healthy family history. It is important to understand what preferred rates are versus standard rates.
- Last-to-die coverage is a way to save on two life insurance policies for seniors in Canada. With this coverage, one policy insures both lives with the payout going to the beneficiary of the “last to die” person insured. For example, if money was needed for a couple’s children to pay off capital gains on their senior parents’ cottage, a last-to-die policy ensures the children have the funds to do so. Alternately, you could get a seniors life insurance quote for a first-to-die policy. This pays out to the remaining spouse should one predecease the other.
- Guaranteed issue life insurance is a good option for those that are hard to insure due to health issues. These policies do not require medical testing in advance and do not have a medical health questionnaire. These are often considered a last resort and are commonly sold directly by companies such as BMO Insurance and Manulife, as well as by brokers. This type of policy has a two-year waiting period for payouts on non-accidental deaths.
The different types of life insurance for seniors
There are several types of seniors insurance plans, depending on your needs and current health status. Contact us to discuss what will best suit you and your family and to get a seniors insurance quote. At No Medical Life Insurance, we are experts in seniors life insurance in Canada.
Photo credit: nomedicallifeinsurance.ca
It is important to find an experienced insurance broker that can help to explain the different types of life insurance for seniors. As well, you must determine what your end goal is, what your current financial situation looks like and if you have health issues that could become problematic down the road. At the end of the day, seniors insurance will help provide peace of mind for both you and your family.