As I talk to my clients about life insurance, I find that many of them don’t realize that it’s possible for them to outlive their life insurance. It is critically important that you realize that it’s possible to outlive your policy, no matter what type of life insurance you have.
When I’m talking about this subject, I’m not talking about the person who has children and a mortgage and who needs traditional life insurance coverage. I’m talking about the other end of the story—life insurance for a person who is older and does not have so many obligations.
Nearly All Policies Provide Coverage Only for a Certain Number of Years
The vast majority of persons do not have life insurance coverage that extends for their entire lifetimes. This is true with any type of life insurance product. Typically, most people have a universal life policy or a term policy. There are other variations but there are very, very few of what we call whole life insurance contracts.
The kind of policy nearly everyone has only provides coverage for a certain number of years. While that coverage could continue for a very long time, it typically will not extend coverage through your seventies, eighties or nineties. What if your death does not come until your late seventies, eighties or nineties, meaning you would have outlived that insurance contract?
When we call our clients and tell them that their policy is about to end, they’ll say, “I’ve been paying my premiums. What happened to my coverage?” Just paying your premium does not mean you’ve got life insurance until you die.
How to Find Life Insurance Coverage for Your Later Years
The sooner you’re aware of the fact that your policy will not necessarily provide benefits in these later age ranges, the sooner you can adjust your premium costs to extend your coverage. You certainly have options but the costs will be higher. You may choose to reduce some coverage or make other changes. This is a discussion you should have with your insurance agency.
When we reach those later ages, we’re running into another issue called long-term care or long-term healthcare expenses. You need to be aware of when your life insurance policy will end and what your cost options are to extend it to an older age. You may need that coverage in relation to long-term care costs or other obligations you may have as a family.
Check in with your insurance agent to find the best arrangement for you or reach out to us at MBhealth by calling 314-544-5400.
