They say that age is nothing but a number, but for those looking to purchase life insurance, age can become a determining factor in their decision to obtain coverage. Premiums become higher as we age, however, is there an age where you are essentially too old for life insurance, or is there even an age limit for life insurance?
The answer depends on whether or not life insurance is a valid investment for you and your loved ones, and whether or not you will be leaving people behind who are dependent on your income.
When determining whether or not life insurance is appropriate for you and your family as you move into your twilight years keep these factors in mind, as they will help you determine whether or not you are too old for life insurance:
Do You Have Dependents?
One of the biggest influences on your decision to buy life insurance at any age should be directly related to how many people depend on you financially. If you are working and your spouse or other members of your family depend on your income, then it might make sense to buy a policy even at a later age. With families having children later in life, adults are now finding themselves financially responsible for dependents well into their 60’s and beyond. The question here is do you need more life insurance and is there an age limit for life insurance.
Although buying life insurance very late in life, it is possible all the way to age 90. Many insurance companies offer Final Expense Insurance which was developed primarily for these consumers. There is typically no medical exam required and your health is not as critical to the policy as it is with traditional term or whole life insurance.
Do You Own Your Assets Outright?
If you own your home, car, and other investments outright and don’t have a large number of dependents, then life insurance might not be a smart investment for you later in life. Many times one’s equity and savings can be enough to cover the costs of funerals and provide financial security for your spouse or partner. If you don’t own your home, however, and have large car payments or other debt, a life insurance policy can help assure that your loved ones aren’t burdened by large payments in the future.
You should also take into consideration the steep costs for a funeral and burial service. Today, an averagely priced funeral is close to $10,000 and you certainly don’t want to burden your surviving loved ones with these costs.
Can You Cover Your Funeral Expenses?
One of the main reasons that individuals over 60 purchase life insurance is due to funeral and memorial expenses. Many seniors don’t want to leave a burden on their loved ones, and taking out a small life insurance policy to help cover funeral and memorial services can be a safety net to assure your family isn’t paying out of pocket for the associated expenses.
In fact, when you make your funeral arrangements in advance and arrange for the payment, it shows how much you love your family members and that you are unwilling to add financial stress to people who are already grieving.
What Other Final Expenses Should I Cover?
Unfortunately, there are other end-of-life expenses that you might leave to surviving loved ones:
Probate and Legal Fees: If the deceased had a will or any assets, their estate may need to go through probate, a legal process that involves validating a will, identifying and inventorying the deceased’s property, paying off debts and taxes, and distributing the remaining property as the will (or state law, if there’s no will) directs. Legal fees can vary widely depending on the complexity of the estate and any disputes that might arise.
Medical Bills: If the deceased had a lingering illness or spent time in the hospital before they passed away, there could be substantial medical expenses. These can include hospital stays, medications, treatments, and possibly hospice care.
Estate Taxes: In some cases, the deceased’s estate might be large enough to incur estate taxes. This will depend on the current tax laws and the size of the estate.
Debt Repayment: Any outstanding debts that the deceased had must be repaid. This can include mortgage debt, credit card debt, car loans, or personal loans. These debts are typically repaid from the deceased’s estate.
End-of-life Expenses: These can include costs related to a person’s final days, such as palliative care or hospice care, as well as potential costs for a caregiver or nursing home.
Miscellaneous Expenses: These can include everything from costs to have utilities turned off and a home cleaned out and sold, to travel expenses for family members attending the funeral.
Are You Able to Purchase Term Life Insurance?
There are two types of life insurance policies to choose from: term insurance, which covers you for a specific amount of time with lower premiums, and permanent life insurance, (whole life and universal life) which has higher premium but covers you for life, as long as you pay your premiums. Your age and health will be a determining factor in which insurance is available to you as many companies don’t offer term insurance to those over age 75.
While age does factor into premiums and the types of coverage available to you, the questions become less about whether or not you’re too old for life insurance, but whether or not purchasing life insurance makes sense in regard to your financial obligations. This question should be thoughtfully considered and while you’re at it, talk to an experienced and reputable independent insurance agent.
If you need affordable term insurance with a large death benefit, term insurance is the product that is appropriate but you will be required to take a medical exam and if you are older than 75-years old, it’s unlikely you’ll be able to get coverage.
If you are 80 or older, your best option will be Universal Life insurance because most companies that offer it will cover you to age 100. Although it will be expensive, the coverage will provide the peace of mind you’re looking for.
If, however, your need is for an insurance policy for final expenses like funeral and nursing home costs, you may want to consider a Final Expense Insurance policy since most companies will provide coverage up to age 85.
We hope this guide helps give you some clarity when it comes to choosing whether or not life insurance would be beneficial to you as a senior. For any further questions please contact us at 866-868-0099 or through our website at your convenience.
Frequently Asked Questions
Final Expense Insurance
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