Seniors are among the most lucrative market segments in the United States. Selling life insurance policies to seniors is a rewarding endeavor. However, you should prepare to face challenges as everyone’s healthcare needs are different.
Life insurance policies cost more as clients age, and seniors may have a tough time finding the right coverage whether they are looking to cover expenses or leave a decent amount for their loved ones. However, there are insurance companies that allow older adults to get life insurance policies for peace of mind.
In this article, we’ll cover the different types of life insurance for seniors and the best way for insurance agents to sell these policies.
Types of Life Insurance for Seniors
When selling a life insurance policy to seniors, make sure you sell the right type of policy after listening to their coverage needs. Here we mention some of the best life insurance for seniors.
Term Life Insurance: The Cheapest Option
As long as your clients are in good health and willing to undergo a medical exam, a term life insurance policy is the most affordable and ideal choice for them. Term life is temporary; it’s a suitable policy for covering debts or providing financial support to the spouse and loved ones if the policyholder dies during the policy term.
If the prospective buyer is in their 60s or 70s, the life insurance agent can suggest a life insurance policy with a 10-year term or 20-year term plan. However, if the person is over 80, finding term life insurance coverage can be difficult.
Whole Life Insurance: Cash-Value Advantage
In whole life insurance, the policyholder is covered for life as long as the premiums are paid. Over time, the policy accrues cash value, and that’s an added advantage. It is possible for your clients to withdraw cash from their policy or take out a loan against the value. Make sure your client invests in the whole life policy from the best life insurance companies with a good track record of claim settlement.
Building a cash value in a whole life insurance policy takes time — in some cases, more than a decade. So, the cost of this type of life insurance policy is usually higher than other products. The premiums are high, particularly when the policy is purchased later in life as the life expectancy is shorter.
Guaranteed Issue Life Insurance: No Medical Exam
Also named “final expense insurance” or “senior life insurance,” the guaranteed issue policy for seniors doesn’t have any medical checkup requirements, which is typically a prerequisite to buying a life insurance policy. It is one of the best life insurance options available for seniors. However, your client may be required to answer health questions during the application process.
Life insurance companies usually require clients to fill up a health questionnaire and undergo physical medical examinations to understand health conditions, identify terminal illnesses, and predict life expectancy. Buying guaranteed or simplified issue life insurance can be a great option if the buyer’s health prevents him or her from qualifying for health insurance coverage.
Discuss whether your client is open to undergoing a medical exam before you begin your search for a policy so you can choose one that aligns with their comfort levels.
Permanent Life Insurance: Multiple Options
While you are selling life insurance coverage for seniors, it’s great to explore other options so that you can suggest the best permanent policy to all prospective buyers:
- Variable Life Insurance – A plan for flexible death benefits that allows policyholders to direct their cash value into any investment.
- Variable Universal Life Insurance – A policy with adjustable monthly premiums that offer buyers a choice in the type of investment for the cash value
- Guaranteed Universal Life Insurance – A no-exam insurance policy with lower premiums and death benefits. Available at a lower life insurance rate than other policy plans such as whole life insurance; however, your client may need to undergo a medical examination to qualify for this lower rate.
- Universal Life Insurance – A permanent life insurance policy type that offers flexible premiums and death benefits.
- Survivorship Life Insurance – A senior life insurance policy that covers two people or spouses and pays out if one of them dies.
Funeral Insurance: Pays for Funeral Only
Funeral insurance, or pre-need insurance, is another option for seniors. The policy is typically purchased directly from funeral homes, and the payouts also go back to the funeral homes to enable them to cover prearranged funeral expenses. Final expense policies like these are more affordable due to low coverage amounts and are well suited for individuals with certain health issues.
Funeral insurance differs from burial insurance, which pays the death benefit to insurance beneficiaries. Apart from funeral insurance, there are other policies that cover other end-of-life costs such as credit card debts, funeral costs, medical bills, legal expenses like probate, and more.
How to Sell Life Insurance for Seniors
With quite vast options in the life insurance domain and the benefits that these policies deliver to seniors, insurance agents will find an attractive market to serve. Keep in mind that selling life insurance policies to seniors requires a little bit of patience and adjustment as the buying habits beyond the age of 60 are different from that of millennials.
Understand Your Audience
When you are selling life insurance in the senior market, you will want to be more friendly and flexible. You should know your audience and the insurance needs they may have based on their age and other needs. Build peer-level relationships with prospective buyers and be prepared to answer every question they might have.
Create a Connection
Selling a life insurance policy to seniors often requires a little more detail about coverage options, benefits, and more. Build a connection by knowing a bit more about their family, interests, likes, and dislikes. Show genuine interest and try to build rapport by asking more questions and answering all the queries your prospect may have.
Personalize Their Plans
Everyone’s insurance needs are different; allow customizations to cater life insurance plans to clients based on their particular requirements. When the senior prospects show interest in buying life insurance, they might have done their own research and already have a lot of information already available. Listen to them and customize their plans to accommodate their needs.
Situations surrounding health can change rapidly as we age; follow up and see if potential clients need to invest in a new plan. Keep in touch periodically with your clients post-sales as it boosts their confidence in your services. Act as a responsible sales rep, extend your concern beyond sales, and get the best rating, excellent reviews, referrals, and more qualified leads.
Seamlessly Sell Life Insurance with iLife
Seniors who are looking to purchase life insurance don’t have decades to outlive the duration of poor policy performance. Nor do they have disposable income to pay additional premiums to avoid policy lapse.
Being an insurance agent, you have to be more attentive to the senior’s life insurance needs. iLife’s quoting tool is designed for professional life insurance agents to help them analyze different plans and pick the best life insurance for seniors to cater to their needs.
Sign up and gain access to iLife’s insurance quoting tool to manage your sales process seamlessly.