Seniors over 80 are in a unique position with regards to their life insurance needs. When it comes to life insurance for seniors over 80, it makes little sense to buy term life insurance. Although term life insurance is the most popular and most sensible type of insurance for many people, it probably isn't for you if you are 80 or over.
Cost for Term and Permanent
Usually term life insurance costs far less than a permanent policy because the insurance carriers are betting that you’ll outlive the term or cancel the policy and so relieve them off making any payout.
But over the age of 80, even a relatively short term of only 10 years poses an extremely high likelihood of payout for the carriers, and so the cost difference between term and permanent policies is negligible. Sometimes a permanent policy will actually cost less than a 10 year term.
As an 80 year old the only term policy you could get would be a 10 year term. If you live past 90 you wouldn't have insurance any longer. Clearly at this age you should only consider a permanent policy, especially since the pricing is essentially the same! As a consequence of this cost equality, there’s no reason to limit yourselves to term coverage, because you just might outlive the term.
Why People Over 80 Should Buy Life Insurance
Understandably, you may be wondering why anyone would want to buy life insurance for seniors over 80. Younger people realize that the primary purpose of life insurance is to secure assets you expect to accumulate in the future and to protect your family financially against loss of income should a wage earner pass away young. Rarely is an 80+ year old the primary wage earner in a family any longer.
Most seniors over the age of 80 probably won’t accumulate much more in the way of assets—at least not relative to what they already own. But life insurance for seniors 80 and above can serve another purpose.
Life insurance provide a tax-free means to leave a legacy for your children, grandchildren, other loved ones, or even a favorite charitable cause. Unlike inherited property, life insurance death benefits are not taxed.
How to Select the Right Policy
It's probably a waste of time for you to go to quote engine and get your free quote! It's essentially meaningless because, you can only run a term quote and at this stage of life a term policy really doesn't make any sense (as explained above).
If you’re looking to buy life insurance for seniors over 80, it’s wise to work with an independent agent with experience in this segment of the market. By age 80, most people have developed some medical issues. An experienced agent can help you find the best company for you to apply with.
Depending on your health issues, you may qualify for a table shaving program, which could improve your underwriting rating by 2 or more categories, thereby saving you a good deal of premium dollars. Because of the unique nature of the product, this experience is necessary to guide you to the best deal that meets your goals.
An agent who understands the difficulties of getting life insurance for seniors over age 80, and who knows which carriers cater to that demographic, can save you money while ensuring that your wishes are fulfilled.
The Bottom Line
Permanent life insurance for seniors over 80 is very well-suited to leaving a legacy for your descendents after you pass. When working with an independent agent familiar with senior life insurance policies, you can find the most cost-effective option for your individual situation.
Photo credit: J Aaron Farr