The Kinds of Insurance for the Elderly

The need for insurance does not go away with the sprightliness of youth. Many kinds of insurance coverage become critically important for the elderly. Older Americans need various kinds of insurance protection, from life insurance and medical insurance to nursing home and long-term care insurance. One often overlooked form of financial protection is longevity insurance -- protection against the possibility of living too long.

Life Insurance

• As people get older, their need for large amounts of life insurance frequently decreases, since they have no children at home depending on many years of income. However, older Americans frequently do own life insurance, to provide for a final expense and burial fund, to provide cash to pay estate taxes with, to give to a favorite charity, or to help distribute an illiquid estate among multiple heirs. Interest in permanent life insurance increases, though premiums on all forms of life insurance get higher as people get older. Many people purchase burial policies -- a specialized form of life insurance.

Medicare

• Seniors qualify for Medicare in most cases when they turn 65, though individuals with certain medical conditions, such as amyotrophic lateral sclerosis or end stage renal disease can qualify for Medicare sooner. Medicare Part A covers hospitalization, Part B covers lab fees and physicians' charges, and Part D covers prescription drugs.

Medicare Supplement and Medicare Advantage

• Medicare supplement plans -- also known as "Medigap" plans -- help plug the holes in Medicare coverage. In exchange for a monthly premium, Medicare supplement plans help seniors cover deductibles and co-pays, and add optional coverages, such as overseas care. Medicare Advantage plans work under Medicare Part C, by providing seniors optional and expanded coverage through managed care plans.

Long-term Care Insurance

• Medicare provides only very limited coverage for long-term custodial care for chronic medical conditions. Nursing home costs, adult day care, assisted living facilities and home care for the aged and frail must come from a combination of private savings and long-term care insurance. Costs for a semi-private room in a nursing facility average $198 per day, as of 2009, according to the Department of Health and Human Services. This is enough to devastate a family's retirement income.

Annuities

• You worked hard to build a nest egg to last you well into retirement. But what if markets don't go your way? What if you live too long? Lifetime income annuities provide retirees with a guaranteed pay check for life, no matter how long they may live. This can be a valuable protection against the risk that you may be reduced to Social Security benefits in your golden years.