In all the years I’ve been in this business you’re the first person who has asked me this question. I had to do a little research to answer it, and this is what I found.

Somewhere around 5,000 B.C. when the Chinese shipping industry was still quite young, it was relatively common for sailing vessels to be lost at sea. At that time most farmers in China relied on boats to transport their crops to other markets. They wisely took a simple measure that insured themselves against unexpected catastrophic situations. In order minimizes their risks and not to lose everything if the ship went down they spread their crop among a several ships.

This way if one did sink they would still be able to realize enough of a profit to feed their families and keep a roof over their heads.

In another part of the world, at another time, the people of ancient Rome wanted to insure that they would get a proper burial. Citizens who did not have enough money to ensure that they could be buried when they died joined a burial club called a “Fratre”. New members of the club had to pay an entrance fee, donate a certain amount of wine, and make monthly payments. Payments were made at monthly festivals where the members ate, drank, and performed sacrifices.

If a member did not pay their dues for six months they weren’t allowed to make a burial claim. Also those who committed suicide would be buried in a separate cemetery from others in the community. Their families couldn’t make claims for the financial assistance that was available to other members of the club.

Later, in the 13th century, the ancient Babylonians devised one of the earliest forms of insurance in recorded history. Affluent individuals offered a guarantee to merchants who shipped their goods that they would not lose any money if the ship sank. In return the merchants agreed to exchange a percentage of the value of their cargo for this protection.

Over the course of time these ideas evolved into the various insurance products that are available to almost everyone today. One thing that hasn’t changed, though, is that when people have insurance coverage their peace of mind makes it easier for them to sleep at night.

I hope this helps answer your granddaughter’s questions.

Mike

That’s a very good question. If you’re thinking of buying senior life insurance then you may be among the millions of people that have been so adversely affected by recent economic events.

Many people, both young and old, are now in some pretty precarious financial situations. They probably never would have imagined that they could have so much trouble dealing with credit card bills, car loans and unpaid mortgages in addition to their everyday costs of life, such as food and shelter.

You, like so many others, may be worried that you might not be able to pay for your children’s or your grandchildren’s future education – or even your own medical bills and, of course, there is also a cost that goes with dying.

I don’t think that most people know, but the average funeral cost more than $6,500. Social Security only provides $225. That is a pretty big difference that your loved ones will be expected to pay.

So, what can a senior citizen do to protect whatever assets they may have and yet still have enough money to take care of their final expenses?

One answer is that you can get a senior life insurance policy. There are a wide variety of affordable plans and options to choose from. You can find one that will fit your budget and give you the protection you’d like.

For example, if you are a senior citizen and you don’t want to burden your family with your final expenses then you can purchase the amount of senior life insurance that will cover the costs of your funeral and your burial. The monthly premium will likely be less than the cost of a meal at a fast food restaurant.

Even if you are fortunate enough to be able to provide your family with a substantial nest egg, the probate process will freeze your assets for between six to eighteen months. During that time your loved ones may be responsible for having to pay for your outstanding debts along with some of your other expenses.

If you decide to purchase a senior life insurance policy you will be happy to know that there aren’t any restrictions on how your beneficiaries can use the money. In most cases, they will receive these tax free funds within a couple of weeks. This money can then be used for your final expenses. This way they will not have to take anything out of their own savings or go into debt to take care of this responsibility.

It is very easy for seniors to qualify for this type of insurance. There aren’t any medical exams that need to be passed. Many online insurance companies only require that you answer some basic health questions in order to get your policy.

Mike

That’s a great question. And you’re absolutely right – term insurance is actually the most affordable way to purchase substantial death benefits.

If you’re wondering if the insurance companies use a different method to calculate the cost of insurance for term instead of permanent assurance you can relax because insurers actually use exactly the same mortality tables to calculate the cost of insurance as well as the death benefits.

And, as long as the premiums for either type of policy are current and the policy is in force when the policy holder passes away, all the death benefits are income tax free.

But there is are a number of reasons why term life insurance policies cost substantially less than permanent life policies.

One reason is that a term life insurance policy will provide you coverage for a limited period of time. Often the term of coverage is for 10, 15, 20, or 30 years. The premiums you will pay for any of these terms will remain the same for the duration of your coverage.

The actual cost is based on the total cost of every year’s annual renewable term rates with an adjustment made for the time value of money. Therefore, the longer the term of the policy, the higher the premium. That’s because as people get older it is more expensive to insure them. And all of this is averaged into the cost of the premium.

However, a term insurance program could very well expire without the insurance company having to pay out any claims. That’s primarily why they are so much lower in cost.

Studies done by the insurance industry show that this is a very attractive program for them to offer because there is a very low probability that death benefit claims are made for term insurance policies. One study showed that the probability of an insurance company paying a benefit is as low as one percent.

However, because permanent life insurance programs last for “a lifetime”, at some point in time the insurance company will absolutely have to pay out death benefits.

Hope that answered your question.

Mike

On the surface it would seem that a life insurance company should require you to get a physical exam before they offer you coverage. However, with increased competition, mainly due to the Internet, “no medical exam life insurance” is available.

And if you apply for this type of cover you will not have to go to a doctor to get a medical exam.

But you are asking a very valid question. Why would life insurance companies ask you to complete a physical examination as part of the regimen you need to go through if you want to qualify for a term life insurance policy?

When you look at it from the insurance company’s perspective the answer is actually quite obvious. In order for the insurance company to rate you and charge premiums that are in line with your actual health status they will need some sort of verification. And a medical exam will do exactly that.

Because of this, having a medical exam can often save you money for your life insurance policy.

But if you don’t want to go to the doctor but do want a more convenient approach that could cost you a bit more money then you should investigate no medical exam life insurance.

Often, just by answering a few health related questions with a simple “yes” or “no” you will be able to get up to $50,000 in insurance coverage. The entire process can be handled through the mail and not only won’t you have to get a medical exam, you won’t have to fill out any long forms as well.

Getting life insurance without having to take a medical exam is a hassle free way of getting coverage that could pay for your mortgage, your unpaid credit cards, your car loans, and more should you pass away. And filling out simple form eliminates having to go through the drudgery taking hours to fill out a lot of unnecessary paperwork.

This type of policy is usually more expensive because the insurance company assumes additional risk by relying on you to provide information instead of getting documented facts from a medical professional.

It actually makes a lot of sense that they would charge higher premiums for no medical exam life insurance than they would charge if you underwent a complete physical exam. None-the-less, online insurance coverage without the need for a medical is available for rather affordable premiums.

Some companies offer a $1 trial and then adjust their rates based on your age – and then they guarantee those rates for the life of the policy. Other online insurance companies offer rates for as little as $3.49 per month for this kind of insurance.

The amount of no medical life insurance coverage you can purchase varies between $5,000 and $50,000.

Mike

Congratulations on your anniversary and I’m glad that you’re considering buying life insurance. You’re asking a very good question.

Up until recently anyone who wanted to get a life insurance policy had to go through a predetermined series of steps that included getting a physical examination. The examination’s purpose was to prove that the person who wanted to invest in the policy was in good enough health to be insured. That was because, as smart business people, insurance providers didn’t want to take any unnecessary risks.

If you weren’t in good health it would be more likely they would have to pay your insurance benefits before the company would turn a profit, so, understandably, they wouldn’t insure you.

But, since the Internet became an everyday fact of life, you can get almost any type of insurance policy that you want online. And, with increased competition, a number of plans that were not available before, such as life insurance no exam policies, are now available. This insurance policy does not require that you have any physical exam whatsoever.

Keep in mind that most of the no exam life insurance policies are term insurance policies. This means that they are only in force for a specific amount of time. And when that time has elapsed, depending on the policy, you might or might not have the option to renew the policy. If you are able to renew it, the premium would probably be higher.

If you decide to invest in a life insurance no exam police make sure to get a guaranteed renewable plan. This will make sure that you will be able to stay insured once the original term insurance policy ends, even if your health should change in the interim. But you have to figure that the rates will increase and it’s also possible that there may be additional stipulations.

Even though you will be buying life insurance – no exam – you may still need to give a blood or saliva sample. However, beyond that, you will not have to see your doctor.

The nature of the policy precludes any additional stress in your life as well as the additional cost of having to take a physical exam. And you will not have to deal with any long waiting period while the insurance company decides if you are a good enough risk for them to insure.

In general the younger you are the easier it is to get a no exam life insurance policy. Once you have turned forty years of age there is a good chance that you will be asked to pass an exam that may include a basic physical, a urine test, blood work, and perhaps a stress test.

Mike