Welcome everybody. This is Chad McMahan with protect with insurance, with another, another life insurance episode. This one is whole life insurance for seniors. And of course, seniors are the number one consumer of life insurance out there. So it’s far as whole life insurance for seniors is concerned. there are a few things you need to know.
First of all, I’m gonna very quickly just cover some basics and then we’ll get to some more advanced stuff. So the basics, first of all, whole life insurance for seniors is the reason why that’s the most popular product for seniors is because whole life insurance, it locks in all of the benefits that you are relying upon.
So you want to know that your policy is never going to expire. You want to know that your price is never going to change? these are fundamental aspects of whole life insurance. that’s why these whole life insurance policies make the best burial insurance, cremation policies. you know, other terms you may have heard are funeral or funeral, funeral, and sharing.
but these, these just very common, life insurance policies that are ideal. For seniors. Now there’s another reason why whole life insurance is a good fit. And that is that it’s easier to get approved for whole life insurance than it is for. Let’s say term life insurance is, is a tougher nut to crack, especially for most people who pass the age of 60.
just because most people pass the age of 60 are taking more prescription medicines. They have at least. One or two moderate medical conditions. but with whole life insurance, you can actually have a long list of moderate medical conditions. And in a lot of cases, you can have some severe medical conditions and you can still get approved.
So it’s a good fit for a lot of seniors. So those are some of the reasons right there. And now another reason is term life insurance. They tend to have minimums of 25 or more commonly 50,000 coverage. that gets very expensive to get a 50,000, even though it’s, doesn’t sound like a lot of coverage to get a $50,000 term or a hundred thousand dollar term, when you are, let’s say 70 or 80, 85, it gets very expensive to get those terms.
and with whole life insurance, it’s more reasonable, but you just need to have the expectation of 10, 20, 30, 40,000 in coverage. and so that’s, it’s typically it’s comparable pricing, but then you know that your policy is never going to go away because it’s permanent whole life insurance, which is another term for it that permanent, it’s also known as pure, life insurance, by the way.
So if you ever hear any of those, it’s all the same thing. now another benefit of the whole life insurance. And this is more for, if you are, let’s say, in your fifties, sixties, or even potentially in your forties. Whole life insurance. It does build up cash value. Doesn’t mean that it’s a moot point or relevant for seniors, that are, let’s say 60, 70, 80 plus a, it still is relevant, but it just takes a long time for the cash value to build up for it, to accrue some people out there say that it’s like a savings account.
That is not the way they think of it. It is not like a savings account and any agent that says it’s like a savings account either they’re lying. Or they’re naive. but either way, you don’t want them representing you because either way, they’re incorrect. And so here’s, here’s the reason why they say that it’s like a savings account.
They say it’s like a savings account because as you make your payments, it starts to build up. Some value inside that you can tap into anytime and you certainly can, but it’s not the money you put into it. If that was true, the insurance company wouldn’t make any money. So that’s not realistic at all.
Excuse me. It’s actually going to be in a lot of cases. It’s going to be maybe 5% of what you put into a plus or minus, and it can be a lot more, it could be a lot less. And. When you first start a policy and the percentage is very small. In fact, it can be 0% for the first year or two years or three years with some companies.
And that percentage will get bigger as you’ve had the policy for longer. So in many cases, I don’t even talk about the cash value, but it has been asked for lately, I’ve had a few clients asking about it. So I wanted to just briefly cover it. So those are the highlights of your whole life insurance.
and again, if you’re a senior, you can certainly look at term if you are really hurting financially, which is really it’s going around right now, you know, it’s tough times 2020 is a crazy year, economically, you know, the COVID influenced and everything else. And so if you’re really hurting financially, you have a few options.
One is you can look at a smaller whole life policy. They typically go as small as 5,000 or even sometimes 1500 $2,500, whole life policies. Obviously, they’re going to cost a lot less if get a smaller one, another way you can go as an accidental, only policy. So those do expire. typically they’re going to run out at 70 or 80 in our case, we write policies that expire to 80, but a lot of those accidentals out there, they buyers, 72 was kind of a bummer for seniors because, well, depending upon your age, just not that far away or you’re even past that age.
So, but accidental policies are incredibly cheap. They don’t cover medical problems, such as heart attack, stroke, cancer, things like that. They would cover, anything in the category, the accidental category. it could be stumbling and hitting your head. Car accidents are the most common or of course motorcycle or anything like that.
animal-related injury, you know, doctors make a mistake, prescription medicine issues. Resulting in death. I mean, there, it’s a long list of fire smoke, suffocation, firearms, and on and on there quite a few things fall within that category. So accent only, it is incredibly cheap. If you’re on a tight budget, it’s probably the way you’re going to want to go.
If you’re incredibly healthy, typically what that means is three prescription medicines or less, your height and your weight. They don’t have to be ideal, but you’re not. You’re not too far away from ideal and no major, no moderate, health conditions. So you can, you can just ask, ask your agent, you know, reach out to us.
We’re happy to help you, but ask an agent, an agent. That’s good. You know, just say, Hey, these are my health issues. Can I get a term and just cut to it? I mean, your time is valuable and obviously, your agent’s time should be valuable too, if they’re doing it right, their time is valuable. so just kind of cut to it and just say, here’s my health, you know, what’s, I’m going to type budget even better is if, if it’s an agent you can trust, hopefully, it is otherwise getting a different agent, but if it’s an agent you can trust, you can say, this is my monthly budget.
It is. $80 a month. You know, what are my options based on that budget. If I can come in under budget even better, and your agent should spend the time, it shouldn’t be a two-minute thing. It should be something where the agent either says, I’ll call you back and I’ll give you the list. Or you can just hang out with them on the phone.
You can talk with them while they’re running. Some quotes meet with them in person. If that’s your thing. nowadays with COVID, you know, it’s over the phone, it seems to be, everyone’s doing business, but certainly, reach out to us. If there’s anything we can help you with, we want to, we’re just here to help.
All right. Stay safe out there, everybody.