Are you or a family member over 80 and looking for coverage? There are different types of policies available for you up to age 89. We'll help you find the right policy to fit your needs.
You have to consider a number of factors before you decide the which type of policy is right for you. Let's take a closer look at what goes into deciding how to buy life insurance for seniors over 80.
Why do you need coverage at this stage of life?
By the time you are 80 your needs for insurance differ from when you were younger. You may need coverage for a variety of reasons. Some of these are:
- To pay for your funeral.
- To pay off debts so your spouse or children aren't left with them.
- To leave additional funds to one or more family members who rely on you for support.
- To leave funds to children or grandchildren for college or for a legacy.
- To pay off your mortgage and not burden your spouse or children.
- To leave money to provide support for a special needs adult child.
- Charitable giving.
- Estate planning.
- And for any other reason you have to leave money to someone.
There may be multiple reasons you want to purchase coverage. Your children or grandchildren may want to have a policy to pay for your final expenses. Whatever your reason to need life insurance, you can choose from several options.
What's the least expensive type of coverage?
In general you will hear that term life insurance is usually the least expensive coverage available. This is mostly true. However, it may not be the case when you are in your 80's.
As we get closer and closer to our life expectancy, the difference in the prices of term insurance and permanent insurance policies get smaller. Surprisingly, underwriting for a permanent policy is somewhat more lenient than that for a term policy. Additionally, some insurance carriers have special programs that can improve your rating and therefore reduce your premium.
If you are a senior buying life insurance over 80, under most circumstances you should really only consider permanent coverage. There are some reasons why a term policy may work, but we find that most seniors are looking for coverage to last their entire lifetime. Remember, after 90 you cannot purchase any coverage. We highly recommend permanent coverage at this time of life, and find that almost all of our senior clients agree.
In your 80's the only term policy you can purchase is a 10 year term policy. If you are insuring yourself to guarantee a loan that will be paid off in 10 years or less a term policy would work for you. But be sure to check both term and permanent, because sometimes permanent coverage is actually less expensive than term coverage! Also, once the loan or other obligation is over, you may decide you want to keep that coverage in force, so consider a permanent policy.
If you know what you are trying to accomplish by getting life insurance, your agent can work with you to determine which type(s) of coverage will fit your needs. Then you can see what the least expensive choice is. Next question is...can you qualify for that type of policy? If so, great. If not, your agent will be able to help you understand why not and show you what you can purchase.
There are several types of policies available. That's why you need to talk to your independent life insurance agent, because they know where you can get the best coverage at the best pricing.
How to Choose the policy that's right for you
So now we know that you are probably looking for a policy that will last your lifetime. You need to speak to an agent because there are so many different things to consider.
I bet you didn't know that every insurance company has slightly different underwriting
guidelines. Well, they do. What this means is that you may be able to qualify for coverage with one company, but perhaps be declined or rated higher (which costs more) with another.
How would you know which company is the best for you? You won't find this information on the internet. You need an agent that has experience with seniors over 80 and different life insurance companies. Your agent should be aware of many of the differences from company to company so that they can steer you to the one that will work best for you. Additionally we have an in-house underwriter we can discuss our cases with. He is able to assist us in placing you with the right carrier. He is able to talk to the carrier underwriter too. This is not something most agents have the ability to do! It can make the difference between getting a better rating or not if you are right on the cusp.
Did you know there are several different kinds of permanent policies? Some require a medical exam, while others don't. How is your health? What medications do you take? How much coverage are you looking for? Your agent can help explain why you can apply for one policy, but not another.
Looking for coverage for estate planning? If you are married you probably will want to consider a survivorship life policy. More about these later.
You need an independent life insurance agent who specializes in seniors to help you understand your different choices. There are many companies and many different options available, as well as different types of permanent policies. Once your agent understands what you are trying to accomplish and your health situation, they can explain which type of policy you will most likely be able to qualify for. Then they will find you the least expensive policy that will fulfill your goals.
Looking for Final Expense Insurance?
News Flash: You can purchase between $2,000 and $40,000 of permanent insurance with no medical exam! Final expense insurance allows you to do just that. It's easy and very quick. Here's how it works:
Final expense insurance is actually whole life insurance. These type of policies have simplified underwriting, meaning you do not have to give blood and urine or have a paramedic exam. The insurance carrier will not order your doctor records. You must be able to answer several questions about your health. Some of the questions relate to your health in the last one or two years, some are lifetime questions. There are usually less than about 25 yes or no questions.
Once your application goes to the insurance carrier, they will examine your record at the Medical Information Bureau and look you up in a prescription database prior to approval. (Some carriers do not check the Medical Information Bureau). They are checking that you answered the underwriting questions truthfully as that is what they are using to determine if they will insure you.
Many companies also have you complete a telephone interview. The interview is basically asking the same questions on a recorded line that you answered on the application. The process is very easy and approval comes very quickly. You can often have a policy in force in less than a week!
Some carriers offer up to $25,000 of insurance, others up to $40,000. If you want more than $40,000 of coverage you will have to apply to more than one company. That is an allowable option for anyone who does not want to take a medical exam for insurance. We had a client who wanted $100,000 of coverage, and she took out three policies with different companies to do it!
This type of coverage gives you insurance from day one. Sometimes you will only qualify for a graded benefit policy. This means, your coverage will phase in. In year one your beneficiaries may only get the premium paid in (plus interest) if you die from any medical condition. In year two it would be 50% of the face amount, and then 100% in year three. Some companies phase in over two years. These numbers are just examples to give you an idea of how graded coverage works. (If you die from an accident, the full face amount is paid from day one.)
If you can't qualify for either of these types of coverage, we have another option for you. There are Guaranteed Issue Life Insurance policies. These have no medical questions on the application, however, for the first two years you are only covered for accidental death. If you were to pass away from a medical condition, your beneficiary would receive all the premiums you paid in plus interest. After two years your beneficiary would collect the full face amount no matter what the cause of death. These policies are available up to and including age 85.
What about Universal Life Insurance?
If you are looking for $25,000 of insurance or more, there is another option for you. It is a universal life insurance policy. This type of coverage requires full underwriting. That means you will have to have a paramedic exam where the examiner will check your height, weight, blood pressure, do an EKG (no undressing needed!), take a blood and urine sample, and get a complete health history from you.
The insurance company will order your medical records for the last five years. Once all of the information is gathered, the underwriter will review your file and determine if you qualify for the insurance and at what rating. The rating and the amount of coverage you want will determine the price.
A Guaranteed Premium Universal Life (GPUL) policy is usually the least expensive type of permanent coverage. These policies can be designed so that no cash value is accrued. They can be set so that the premium stays the same for the life of the policy. Because there is essentially no cash value in the policy, this helps keep the premium lower.
Many states allow these policies to be sold starting at a face amount of $25,000. Some companies have a minimum face amount of $50,000 or $100,000 face amounts. Your agent will be able to tell you them lowest amount of coverage you can purchase.
This type of insurance is always less expensive than final expense coverage, but there are more requirements to get it approved. Generally ordering your medical records is what takes the longest. Although these policies may take four to six weeks (or even longer) to put in force, they are a great value.
Is a Survivorship Policy Right For You?
As I said earlier, this type of policy is often the preferred choice for estate planning. If you have an estate and you want to provide your heirs with cash to pay off the estate taxes, a survivorship or second to die policy may be right for you. This type of policy is a good solution for an estate that does not have a great deal of liquidity. The cash from the policy means your heirs will not have to sell property to amass the estate tax payment.
Two people are insured, usually a husband and wife. The good news is that the premium is usually less than for two separate policies because although two lives are covered, only one death benefit is paid. An additional benefit is that if one spouse is uninsurable for individual policies, they may be able to be insured as part of a second to die policy.
The Bottom Line
Don't know which policy is best for you? That's where we can help. Your health, the amount of coverage you want, your willingness to have a paramedical exam, how soon you need your coverage and more will let us help you determine what will work best for you.
Seniors looking for life insurance for seniors over 80 have a number of choices to make. An agent can help determine what type of policy you can get and help you determine which policy will have the lowest premium and still accomplish your goals. Make sure you find an independent life insurance agent who specializes in seniors to have the most options available.