It’s interesting that many seniors assume life insurance will no longer be available to them once they are over age 70. Most think that the cost will be prohibitive or that medical issues will disqualify them from being approved for coverage.
In this article, we’ll debunk the myth that life insurance for seniors over 70 is out of reach and will even show you how affordable insurance for seniors can actually be.
Most seniors know that there are several types of insurance to consider but are unsure of the type that will best meet their needs and budget. The type of life insurance you should purchase will always depend on your actual need for insurance. The price you pay for coverage is immaterial if the policy will not be the solution to your individual needs.
Why would a Senior over 70 Need Life Insurance?
Believe it or not, there are many people out there who believe that once you are a senior, your need for life insurance is considerably reduced because of the size of your estate. They mistakenly believe the longer you’ve been alive, the bigger your estate becomes. Regretfully, that is not always the case.
Many seniors cashed in or sold their life insurance policies in order to survive the market crash in 2007 and then found that it was difficult or expensive to replace them after the market returned to normal.
Other seniors worked most of their adult lives and had group term insurance coverage that they assumed would be enough coverage for a lifetime, but only to find when they retired, their group term insurance coverage wasn’t portable.
In many cases, uninsured seniors didn’t realize that their surviving loved ones would have to bear the burden of funeral costs and other final expenses when they passed away and only began to consider how this could affect their loved ones after seeing final expense insurance commercials on TV.
The best type of Life Insurance for Seniors over 70
The life insurance industry is always innovating and bringing new products to the marketplace. They do this to respond to the needs of consumers and compete with companies that are slow to develop new products. Here are the most popular types of life insurance for seniors to choose from:
Term Life Insurance
Term life insurance is the least expensive type of life insurance but is typically not the best solution for seniors since it is not permanent and builds no cash value. Although most companies will offer renewals of a term policy, the renewal term is typically for a year only. This means that each year you renew your term insurance, the rates will go up according to your age and can easily become unaffordable when you are over 70.
In most cases, life insurance companies will not offer coverage once you reach age 80, so a 10-year policy will likely be your only option
No Medical Exam Term Life Insurance
There are many seniors who feel that having to undergo a life insurance exam is inconvenient and intrusive, and as a result, many life insurance companies now offer no-exam term life insurance with rates that are competitive with fully underwritten policies.
However, don’t assume that because you are not required to have a medical exam, the insurance company is overlooking any health conditions you are dealing with. There will be many health-related questions on the application, and you must answer them honestly so a claim will not be denied if you should die within 2 years of your policy effective date.
Additionally, the insurance underwriters will check with the Medical Information Bureau and a National Prescription Drug database when you submit your application.
Universal Life Insurance
Although more expensive than term life insurance, universal life is considered permanent insurance life insurance, and the policy will build cash value over your lifetime.
Unlike term or whole life insurance, Universal Life is flexible and allows the policyholder to change the premium payments or death benefit to accommodate life events that happen to most seniors.
Like whole life insurance, Universal Life policies have a cash-value component that earns interest each year and can be accessed via policy loans or withdrawals for any reason and with no credit requirements. Since the cash value is used as collateral and not withdrawn for policy loans, your cash value account will continue to earn interest.
You can also choose a Guaranteed Universal Life insurance policy, which is similar to traditional universal life, but the policy does not build cash value over time since the cash value in the policy is used to cover the increasing cost of your life insurance as you get older. Most seniors who buy guaranteed universal life do so because the premiums are less than traditional universal life.
Final Expense Whole Life Insurance
If your goal is to provide the funds needed for your surviving loved ones to pay for your funeral costs and other final expenses like unpaid medical bills or unpaid nursing home costs, final expense life insurance (whole life insurance) is the better solution for seniors over 70.
Companies that offer final expense insurance have liberal underwriting guidelines, do not require a medical exam or blood/urine tests, and will approve seniors who have typical health issues like diabetes and high blood pressure without requiring a waiting period.
Final Expense life insurance is similar to traditional whole life insurance because your policy cannot be canceled as long as the premiums are paid, and your monthly premiums are locked in for the life of your policy. Additionally, Final Expense life insurance will build cash value over time, just like traditional whole life insurance.
What if I have Health Issues?
Although there are many seniors who are blessed to have great health in their seventies, most seniors have to deal with health issues as they age. Some of the more common health issues that seniors deal with are:
- Heart disease
- Alzheimer’s disease
- COPD and other respiratory diseases
- Hepatitis C
Even though most of these diseases can become chronic, they may not necessarily prevent seniors from buying life insurance when they are over 70. Knowing that seniors frequently must deal with these diseases, many life insurance companies are offering graded benefits or guaranteed issue policies, which allows the company to accept seniors with high-risk medical conditions.
How much Life Insurance do Seniors over 70 Need?
If you are considering a final expense life insurance policy, the death benefit should be at least sufficient to cover funeral and burial expenses that would be passed on to surviving loved ones. If your budget will support additional death benefits, then, by all means, consider additional benefits for taking care of unpaid medical expenses or nursing home costs that weren’t covered by Medicare.
Funeral and burial expenses are based on various things like where you live, the type of funeral you want, the memorial service, and other bells and whistles that funeral directors use to fatten the funeral and burial invoice. According to national funeral services like Parting.com, Funeralwise.com, and the NFDA (National Funeral Directors Association), you can expect an average funeral to cost between $9,000 and $12,000. It’s also important to note that the longer you live, the more it will cost to bury you when your time comes.
How much does Final Expense Life Insurance for Seniors over 70 Cost?
Just like traditional life insurance, final expense insurance rates are based on three primary things: your age at the time of application, your current health and health history, and the amount of coverage you want to purchase. Although most final expense insurance companies offer death benefits of $5,000 to $30,000, the most popular policy amounts are $10,000, $15,000, and $20,000.
Here are the actual rates for a $10,000 policy for a male and female non-smoker:
|Age of Applicant||Male Non-Smoker||Female Non-Smoker|
What if I Don’t Qualify because of Health Issues?
Seniors who have severe or multiple health issues can still purchase life insurance even if they don’t medically qualify for Term Life insurance, Universal Life, or Whole Life insurance. As we mentioned earlier, there are companies that offer guaranteed issue (guaranteed acceptance) life insurance for anyone who is alive and under age 86. This means that you can get the insurance coverage you need and not have to worry about serious or multiple medical conditions.
Companies that offer guaranteed issue life insurance do charge more and typically have a two or three-year waiting period before they will pay the full death benefit if your death is the result of natural causes.
Typically, if the insured dies from natural causes during the waiting period, the insurance company will pay the sum of all premiums paid plus an additional 10 percent.
If, however, your death is the result of an accident, the company will pay the full death benefit from the first day of coverage. This means virtually any person under the age of 86 years old can buy final expense life insurance.
Now that you understand that Life Insurance for Seniors over 70 is not out of reach don’t delay in getting covered because your life insurance rates will never be less than they are today.
For more information about Life Insurance for Seniors over 70 and to get a free and confidential quote, call the insurance professionals at LifeInsure.com at (866) 868-0099 during normal business hours or contact us through our website.Best
Frequently Asked Questions
Absolutely. A 77 year old can purchase a 5-year or annual renewable term policy or a Guaranteed Universal Life or Whole life policy.
Typically, once you’ve reached age 85, you are no longer eligible to purchase a new life insurance policy.
Yes you can. Companies like AIG or Gerber will offer you Guaranteed Issue (acceptance) life insurance without considering your health issues. These policies are priced much higher than traditional life insurance and the death benefit is usually capped at about $20,000.
Once your final expense insurance policy has accumulated sufficient cash value, you can take out a loan from the insurance company who will use your cash value account as collateral.
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