When seniors over 65 are shopping for life insurance, there are typically two reasons they need coverage at this point in their life: they have life insurance now but would like to add additional coverage or they had life insurance and had to give it up and need to replace it.
Whatever your reason is for needing life insurance at 65 or older, take a breath because you can still purchase affordable life insurance, even if you’ve developed some health issues. And, it’s important to note that your choices are not limited to an expensive guaranteed acceptance policy that you’ve likely seen advertised on TV.
Why do Seniors over 65 Need Life Insurance?
We have found over time that seniors who are over 65 have found themselves in one or more of the following situations:
- They have recently retired and found out that their free employer-sponsored term insurance will not follow them when they leave. In other words, their life insurance is not portable.
- They’ve had a permanent life insurance policy in the past but had to cash it in or sell it to make ends meet during the recession of 2007 and when things got better, they either put off replacing their life insurance or found they couldn’t afford the amount of coverage they thought they needed.
- They let their prior coverage lapse by accident but the company wouldn’t reinstate their policy because they had developed a severe health issue.
- They have life insurance now but have realized the coverage is not enough to take care of their financial situation.
The good news is you still have choices and you can shop all of the major highly-rated insurance companies online using an experienced and reputable independent agent.
How much Life Insurance do Seniors over 65 Need?
Everybody has different needs according to their circumstances. The amount of life insurance that seniors over 65 need depend on what they need their death benefit to cover. For example, many seniors over 65 still have mortgage payments and other debts that need to be paid after they die.
Today, a lot of seniors are raising their grandchildren or still have children in the home that are financially dependent, even if it’s temporary. In this case, you would want to replace your retirement income so that your dependent loved ones would not be financially devastated in the event of your death. If this sounds like you, we suggest that you and your agent complete a needs analysis so you can determine a sufficient death benefit to replace your income.
We have found over time, however, that many seniors over 65 are most concerned about getting enough life insurance to cover their final expenses when they die (hint: everyone has final expenses). Final expenses typically consist of the funeral and burial expenses, unpaid medical bills, and nursing home costs that were not paid by Medicare.
We know from published reports from the National Association of Funeral Directors that an average funeral costs about $9,000 to $12,000 depending on where you live. Certainly, funerals can get more expensive if your loved ones insist on additional services. In most cases, seniors should consider at least $15,000 to $20,000 in coverage for a final expense life insurance policy.
How much does Life Insurance for Seniors over 65 Cost?
Since life insurance rates are based on your age, your health, and the amount of insurance you need, we’ll list the rates for several types of insurance policies in this article.
First, let’s take a look at term insurance since it is typically the cheapest insurance available:
Here are the rates for a $100,000 20-year Term Life Insurance policy for a healthy male and female non-smoker:
Age of Applicant Male Non-Smoker Female Non-Smoker 66 $133.28 $103.11 67 $152.66 $120.74 68 $176.70 $140.72 69 $197.32 $152.26 70 $222.63 $172.61
Remember these rates are based on a healthy non-smoker so a lot of carriers may require an insurance medical exam as part of the underwriting process.
What about the Rates for Final Expense Insurance?
The good news about final expense insurance is that it is typically whole life insurance and will come with all the guarantees and benefits that permanent life insurance policies have. These benefits consist of life insurance coverage for a lifetime, level premiums that cannot be changed by the company, and cash value accumulation that can be accessed using policy loans or withdrawals.
Remember, a final expense policy is designed to cover your funeral and burial plus other final expenses so the death benefit will be much lower than if you were trying to replace your income.
Here is an example of a $15,000 final expense policy for a healthy male and female non-smoker:
Age of Applicant Male Non-Smoker Female Non-Smoker 66 $84.90 $64.96 70 $107.50 $78.24 75 $147.37 $107.50 80 $216.58 $247.57 85 $298.30 $247.57
It’s important to note that men typically pay more for life insurance than women because women generally live longer which gives the insurance company more opportunities to collect premium.
What if I don’t Qualify because of Health Issues?
If you’re like most seniors, you may have some health issues. Most seniors begin developing health issues like diabetes, high blood pressure, and high cholesterol in their early sixties so it may be possible that you have multiple health issues and will not qualify for standard insurance rates.
If you find yourself in this situation, do not give up. You can qualify for a guaranteed issue final expense policy. With a guaranteed issue policy, the insurance company will not take your health conditions into consideration in order to issue a policy. In fact, most companies that offer guaranteed issue life insurance don’t even have medical questions on the application. This means that virtually anyone who is alive can get some amount of life insurance.
With guaranteed issue life insurance you will have a two or three-year waiting period during which the insurer will not pay the full death benefit if you die from natural causes. Instead, they will typically pay a benefit equal to the sum of all your insurance premiums paid to the company plus 10% interest.
So then, for all you seniors out there who have passed age 65 and do not have life insurance or you need more life insurance, contact an independent agent like LifeInsure.com who represents most of the highly rated life insurance carriers that can offer a life insurance solution even up to age 85.