Find the Best Life Insurance for Seniors in their 60’s, 70’s and 80’s.
How do you know how to find the best life insurance for seniors? With our help.
Life insurance is an important component of the overall financial planning process. Many young spouses and parents will often carry this type of coverage in order to ensure that their dependents won’t have to face financial hardship if the unexpected should occur.
But, as people get older, their children grow up, and they no longer have individuals depending on them for their income, it is sometimes felt that people who are seniors no longer need the protection that life insurance coverage can provide. This, however, is not necessarily always the case.
Why Seniors Need Life Insurance Coverage
There are many reasons why seniors still need life insurance coverage. Just some of these can include:
- Final Expenses – One of the biggest reasons why seniors need life insurance is for the payment of final expenses. Today, when factoring in the cost of a burial plot, a headstone, transportation, and the memorial service itself, a funeral and its related expenses can cost upwards of $10,000. Many families do not have this amount of money available for paying these costs. But life insurance can help to ensure that loved ones don’t have to pay this tab out-of-pocket. If this is the only reason that you need the coverage, then your health will not be as big of a factor in the life insurance qualification process, and you will have many options for coverage.
- Debt Payoff – While many seniors in the past may have had all of their debt paid off in full, things are different now. It is not out of the question for today’s seniors to still have a sizable balance remaining on a home loan, a car loan, and/or credit card obligations.
- Retirement Income Replacement – If you are receiving retirement income from a pension and/or any other source, what will happen when you or your spouse passes away? Will some or all of that income disappear? If so, then life insurance is an ideal way to help in replacing that lost income stream.
- Charitable Donation – There are also many seniors who would like to offer a donation to a charitable organization – and life insurance can provide the perfect conduit for doing so, literally for pennies on the dollar.
- Estate Taxes – While not everyone will be required to pay estate taxes, if you are one of the unlucky few, then life insurance can alleviate the need for having to sell off assets and/or other items – often at below market value – for the purpose of paying these estate taxes. These taxes can often eat away more than 50% of your estate’s total value. So, having life insurance available to pay them can help to save more – much more – for those that you care about.
- Other Planned Giving – Life insurance can also be used for other planned giving, too. For example, you might want to ensure that a grandchild has funds to attend the college of his or her choice. Or, you might want to provide the funds for a grandson or a granddaughter’s wedding, or the down payment for their first home. Having a life insurance policy can help you to make sure that your promises are kept – even if you are not here.
Types of Life Insurance Available for Seniors
When shopping life insurance policies for a senior, you may be surprised to find that there are a lot of options. If you are healthy, you have unlimited options. We can help you in determining if you are still in good enough health to qualify for a life insurance policy that will need you to go through underwriting.
Today, due to our longer life expectancies, many insurance carriers have widened their offerings of life insurance for seniors over 60 and beyond. And, while most carriers stop at age 80, you may even find that there are some who will take on those who are older, depending on the situation and the insurer (although finding coverage for someone who is over age 80 is difficult).
There are basically two main categories of life insurance that are available in the market: these are term and permanent.
Permanent Insurance For Seniors
Permanent life insurance provides you with death benefit coverage and cash value. This means that, along with life insurance coverage, you can also build up a nice saving on the side, directly within the policy. These funds are allowed to increase over time without being taxed – at least until you take any withdrawals.
Because permanent life insurance offers both death benefit protection and cash value, the premiums will typically start out quite a bit higher than those of a comparable term life insurance policy. However, there are a couple of things to keep in mind here.
First, there is no time limit on a permanent policy. This means that, unlike term life insurance, a permanent policy won’t “expire” after 10 or 20 years – and provided that you keep paying the premium, the plan will remain in force.
Permanent coverage – especially an option like whole life insurance for seniors – may often be a better alternative. This is because a whole life insurance policy will provide a death benefit that is guaranteed for life (as long as the premium is paid), and a premium amount that is also locked in – regardless of increasing age, or deteriorating health condition in the future.
Term Insurance For Seniors
Term life insurance provides you with the most affordable death benefit protection, without any cash value build-up. For people in their younger years, this is often the cheapest way to purchase a large amount of life insurance without having to spend a lot of money on the premium.
With term life insurance – as the name suggests – coverage is available for a certain amount of time, or “term,” such as 10 years, 20 years, or 30 years. There are also 1-year renewable term life policies where the policy will renew, and the premium will generally increase each year.
Term life insurance for seniors is available from many of the top carriers. However, it could be somewhat more difficult to get for the longer duration, such as 30 years – depending on the carrier, and on your age at the time that you apply for the coverage.
Also, while this type of coverage is known for being highly affordable for younger individuals, as you get older, term life insurance tends to get a bit more pricey.
Options for Seniors age 60
Seniors over age 60 and over can buy term insurance. The maximum term length offered at age 60 is a 25-year term.
Out of the 40 carriers, we represent only 6 of the carriers offer a 25-year term policy. You can see in the image below some sample rates.
Options for Seniors age 65
Only one carrier at age 65 will offer a 25-year term, and that is Transamerica. You can see a sample rate below. However, we have over 35 carriers who will offer a 20-year term option.
Options for Seniors age 70
We have 4 carriers who will offer 20-year term policies to seniors age 70. You can see them in the image below. Many will offer a 15-year term.
Options for Seniors age 75
A handful of carriers will offer a 75-year-old a 15-year term. We have over 20 carriers that will offer a 75-year-old individual a 10-year term.
Life insurance for seniors without medical exam required
There are even some life insurance policies for seniors that don’t require an exam.
These two types of policies are called final expense/burial insurance and guaranteed issue life insurance.
Life insurance for seniors with no medical exam requirements – means you are not required to go through the full underwriting procedure that will oftentimes entail meeting with a paramedical professional and submitting a blood and urine sample.
What if You’re a Senior in Bad Health?
With guaranteed acceptance life insurance, an insurance company will provide you with coverage – regardless of your health condition at the time that you apply for the policy.
A guaranteed acceptance policy will typically only offer up to $25,000 in coverage. This means that you can still have the security in knowing that your loved ones will be able to pay final expenses or other debts that may need to be taken care of.
It is important to note that, due to the higher amount of risk that the insurance company takes on with a guaranteed acceptance life insurance policy, the premiums on these plans are typically higher than those of a traditional, or “medically underwritten,” life insurance policy. (Guaranteed acceptance life insurance policies generally don’t require that you undergo a medical examination as a part of the underwriting process).
Also, the entire amount of the policy’s death benefit may not be paid out if the insured passes away within the first two years of owning this type of policy. Should this occur, the named beneficiary on the policy may instead receive back only the amount of the premium dollars that were paid in. If, however, the insured dies after owning the policy for more than two years, then the full amount of the death benefit would be paid out to the beneficiary.
Finding the Best Life Insurance for Seniors?
That depends on what you need the coverage for. It also depends on your health. Today, you have many life insurance options available to you if you’re a senior – even if you aren’t in perfect health. When it comes to determining the best life insurance policy for you, that will depend on a variety of different factors.
These will typically include your overall financial situation, as well as how much debt you have. If you have a spouse or a significant other, you will also need to consider whether there is any income that will need to be replaced upon your passing. If so, then the present value of that cash flow will need to be determined.
Other factors will also need to be considered, such as:
- Estate Equalization – In some cases, children or other heirs may inherit “unequal” amounts of assets from an estate. Life insurance can be used to help in “evening out” the shares for each of the recipients.
- Charitable Donations – Should you wish to include a charity in your final wishes, there are many ways that you can do so, benefitting both you and the entity from a tax and financial perspective.
- Uninsured Medical Expenses – While it is not possible to determine exactly what you may need in terms of benefit, it is often a good idea to add some additional funding to cover any potential uninsured medical and / or hospice expenses that may be incurred.
- Estate Planning – If you are using life insurance for estate planning, you will want to ensure that you properly craft the policy ownership so that proceeds are not included in your personal name. (Having an estate planning attorney or advisor to assist in this process can oftentimes be helpful).
How Much Will it Cost?
The cost of a life insurance policy will encompass a number of different factors. For example, the premium price will include the type of policy you choose, as well as the amount of coverage you are obtaining. The cost will also take into consideration your gender, as well as your age and the amount of coverage you need, and the type of policy you buy.
For example, trying to find affordable life insurance for seniors over 60 can differ a great deal from pricing life insurance for seniors over 80. There are very few life insurance companies that offer coverage after the age of 80.
It will also depend a great deal on the amount of risk that the insurer is taking on. In this case, your health can play a key role. Likewise, life insurance for seniors with no medical exam – as well as no health questions – will typically cost more than a “fully underwritten” policy. This is because the life insurer is taking on more of a risk.
The reality is, though, that even given the very same policy benefits, the premium cost can oftentimes differ significantly from one insurance carrier to another. So, just like purchasing any other type of product or service, it will be important that you shop carefully for your life insurance prior to making your final decision.
Taking the next steps
While some people may feel that finding cheap life insurance for a senior citizen is not needed, the truth is that there are numerous reasons why older individuals should own this important coverage. One of the best ways to ensure that you obtain the life insurance that is right for you and your specific needs is to compare several different policies, carriers, and premium quotes.
We can help you in sorting out the type and amount of protection – as well as the carrier – that may work the best for you. We work with more than 40 different insurers, and we can assist you in determining which direction to go.
We can also provide you with instant policy quotes in just minutes – directly from our website. Throughout the years, we have helped thousands of families to obtain the life insurance coverage that they need – and we’ll be happy to work with you.
So, whether you are just starting to look – or you are reviewing a life insurance policy that needs to be updated, please feel free to contact us and we will provide you with the most affordable option.