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When making careful financial considerations, timing plays a key role. This is especially true for insurance protections, whose benefits are heavily dependent on when a policy is purchased. If you buy in too early, you could risk paying for insurance you can’t use and don’t need. But, if you wait too long, you could wind up losing out on vital financial protection. The timing needs to be just right for each individual.
This importance takes on added weight for seniors, some of whom may be reliant on a limited budget made up of retirement funds and Social Security. With less money to work with, each insurance policy purchased needs to be valuable and cost-effective. And while life insurance is one of the best ways to protect your estate and loved ones in your absence, there are some smart moves to consider making now.
With inflation still high and the prospect of interest rate cuts dim right now, seniors need to consider making select moves. Below, we’ll break down three of the best ones to make.
See how much a robust life insurance policy could cost you here.
3 smart life insurance moves seniors should make now
Here are three strategic life insurance moves seniors should strongly consider right now.
Re-evaluate your needs
Unfortunately, inflation remains an issue for millions of Americans. While significantly cooled from a decades-high in June 2022, it has steadily risen again this year. This has caused the cost of many items to remain high — and it has left interest rates stuck at their highest point in 23 years, thus causing borrowing costs to remain high as well.
With these issues in mind, it’s important to re-evaluate your financial needs. Do you have enough coverage or do you need to boost your protections? Do you want to add beneficiaries or readjust who your money will eventually go to? And will your current policy be enough to pay for any outstanding debts you ultimately leave?
You may have purchased a policy in a very different economic climate than today’s. So, re-evaluate your needs and adjust your life insurance accordingly.
Consider term versus whole
Term and whole life insurance policies both offer unique benefits for policyholders. But if you’re looking for the most cost-effective option (albeit without the opportunity to cash in a policy while alive), then consider a term policy right now. These policies are relatively inexpensive (depending on your applicant profile you could pay less than $100 per month for a six-figure coverage amount) and they can still adequately cover many of the items you’d need.
If you don’t already have a policy but know you’ll need one now, then a term one may be your best option.
Think about your beneficiaries
If inflation and higher borrowing costs have negatively impacted your financial situation, then it makes sense to consider how they have affected your beneficiaries, as well. The coverage amount you initially had planned for your loved ones may be insufficient now that the cost of living has risen so significantly.
With interest rates on some borrowing products more than double what they were a few years ago, a six-figure sum may not go nearly as far as you once expected it would. It may be worth sitting down with your beneficiaries, then, to adjust your policy plans.
The bottom line
Life insurance provides vital financial protection for you and your loved ones. However, the benefits of a policy can easily be influenced by factors outside of your control. In the face of stubborn inflation and elevated borrowing costs, seniors should take a closer look at their current policies (or consider buying one now to help loved ones). They should also consider the benefits of term versus whole policies and discuss their plans with beneficiaries to ensure that the policy they’re paying for now will be valuable when accessed in the future.
Have more questions? Speak to a life insurance expert who can help here today.