If you’ve recently gone through a major life event such as a home purchase, a change in financial situation or new health concerns, now is the time to reassess your insurance needs and think about increasing your life insurance coverage. You don’t want to risk your loved ones not receiving adequate benefits upon your death.
Converting Your Coverage
Some reasons you may need to convert and extend your life insurance coverage include debts and dependents. Your policy should include enough coverage to pay off any loans, credit cards and mortgages while leaving a payout large enough to replace your income for any dependents.
One way to increase life insurance coverage is to convert a term life insurance policy into a whole life policy. Term life insurance offers coverage at a fixed rate over a set time period, often anywhere from 10 to 30 years, whereas whole life insurance lasts your entire lifetime and does not expire. Not all term policies have conversion privileges, so check with your provider to see if this is an option.
Whole life insurance for seniors offers benefits specific to those at a senior age at a fixed, affordable rate. With it comes guaranteed coverage and protection on end-of-life expenses. Learn more by reading our guide to select a senior life insurance policy.
Canceling Your Coverage
You can cancel your coverage in favor of a new policy, but you’ll likely have to go through underwriting to obtain new coverage. Know that you could also likely pay higher premiums for a new policy, as premiums are dependent on a variety of factors such as age and health. For example, with every year you age, premiums will increase 8-10%.
With whole life insurance, you’ll want to make sure you receive the cash value you are owed upon cancelation. Term life insurance, on the other hand, will not refund any of your premiums when you cancel.
Before you make a big decision like canceling your life insurance, you’ll want to have an alternative already in place. It can take up to six weeks to go through the underwriting process for new insurance, and you don’t want to experience a coverage gap. If you die during the coverage gap, your family would lose out on receiving death benefits.
Supplemental Coverage
Even if you already have life insurance, you can choose to buy supplemental life insurance if your original policy doesn’t cover your current needs. Supplemental life insurance is an additional coverage that you can purchase to complement your basic policy. Stacking life insurance policies, or the ladder strategy, involves purchasing multiple insurance policies that expire at different times in order to increase life insurance coverage. When used correctly, your coverage will taper off as your debts and financial obligations decrease so that you have the appropriate coverage only while you need it.
You might also consider getting a life insurance rider, which offers extra coverage in designated areas such as accelerated death, chronic illness and children.
You’ll want to evaluate all of your current expenses as well as those you anticipate in the future to establish a clear picture of your finances. Our representatives can help you determine how much additional coverage is appropriate for you.
Life Insurance Through Americo Senior Life
The right insurance policy and amount of coverage will vary greatly from person to person. Americo Senior Life can offer guidance on how to find a life insurance policy that fits your unique needs and finances. We offer a range of options to give you affordable prices, comprehensive coverage and peace of mind. Contact us for help finding life insurance quotes or to get started applying for life insurance online.