Life Insurance for Nursing Home Residents

Key Takeaway

Nursing home residents can still get life insurance products, and may qualify for guaranteed life insurance products. However, their options may be more limited and expensive.

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Life insurance is an investment we believe is best made when you’re young–but that doesn’t mean that you can’t purchase these products when you’re in your prime. Nursing home residents can still qualify for life insurance to help cover expenses that their families might have to deal with after they pass, such as medical costs and funeral bills. That said, the types of life insurance options available will likely be more limited and costly versus, say, life insurance for individuals that don’t reside in nursing homes.

Guaranteed Issue Life Insurance

Nursing home residents may not have a lot of options when it comes to life insurance products. This is because of the increased risk and that premiums may be paid over a shorter period of time.

One of the most common types of life insurance products for nursing home residents is guaranteed life insurance. Although ‘guaranteed life insurance’ is a broad insurance category and can exist in many forms, this kind of product typically doesn't require a medical exam or health survey, which is why it’s referred to as ‘guaranteed.’

Guaranteed life insurance products are usually a type of whole life insurance. In general, Whole life insurance doesn't come with term lengths or an expiration date, provided that you pay your premiums when due. Applying for this product could be a speedy process and approval may be instant. This means that as soon as you pay your first premium, your policy could become active.

Guaranteed life insurance, however, does come with a couple of drawbacks that are worth considering. For one, guaranteed life insurance rates are typically higher than those of other whole life insurance products. Besides higher premiums, this insurance also typically offers lower death benefit amounts that can max out at about $25,000, depending on the insurance company.

Some life insurance providers may also have restrictions on who can be issued guaranteed life insurance.

While guaranteed life insurance may be a great option for nursing home residents looking to leave some financial security to their families after their passing, it’s still best to thoroughly weigh the terms of the policy and double-check for any compromising underwriting rules or restrictions. A licensed life insurance agent can help you find an appropriate policy for your needs.

Can a Nursing Home Take Life Insurance Payouts?

Nursing homes can’t coerce the family or insured person to give them their death benefit, but an insured person can name the nursing home as a beneficiary, or the nursing home can accept payment from the beneficiary to pay any outstanding balance. There may be cases in which family members aren’t aware that their family members may have named them as beneficiaries of life insurance policies that could result in benefit payouts.

If you have a relative in a nursing home who’s naming you as a beneficiary, make sure you verify this with them and their insurer. In the same vein, if you’re taking out a life insurance product for your parent in a nursing home, you should take note of the policy terms and conditions.

Life insurance for nursing home residents may help with end-of-life expenses. While the beneficiary has the freedom to choose how to use the death benefits they receive, the money may be used towards paying medical bills, nursing home payments, and funeral costs, among other related expenses.

Is Life Insurance for Nursing Home Residents Necessary?

Life insurance for nursing home residents can be helpful for families who want help paying any bills that may come from the passing of a senior loved one. When researching this product, it’s best to consult with a licensed life insurance agent to find the best solution.

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The information above is for educational use only and does not represent insurance, tax or legal advice. It is not a recommendation or solicitation to buy insurance. Please talk to your licensed insurance agent for more information about life insurance and your needs. Please consult with the appropriate professional for tax or legal advice. Guarantees are backed by the claims-paying ability of the issuing insurance company.

Article Author: Meredith Bell
Author Bio: Meredith joined Everly in 2022 and has 20+ years of experience in the life insurance industry. She has held various roles in advertising, marketing, communications, sales and distribution support, and product development. Outside of the office, Meredith lives with her daughter Kennedy and their dog Mavis. Meredith enjoys cooking, camping, gardening, hiking, and bourbon (though not always at the same time). She is a live music enthusiast and an avid reader. Her favorite quote is by Thomas Jefferson: "I cannot live without books." Meredith agrees, but would add cheese, movies, and dogs to that list.

Policies are issued by Everly Life Insurance Company (“Everly Life”), Topeka, KS. Everly Life is not licensed in the state of New York and does not solicit or transact business in New York.

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