Life Insurance for Seniors Over 70
Being in your 70's you will find that you're reasons for life insurance are different than when you were younger. Your family is usually grown and your needs have changed. You may already have a policy in force and think you are done...but consider your current needs first.
Reasons why You Might Still Need CoverageYou probably won't have a young family, or be in your prime earning years anymore. Still there are many reasons you may need coverage later in life. They can be as different as:
- Protecting a spouse- (Ok this one is not so different and the reasoning behind it is the same. You want your spouse to continue to be able to live in the same manner as now.)
- Protecting an adult special needs child or grandchild- If your child or grandchild will need special care for their lifetime, you will want to provide for that care even when you are gone.
- Wanting final expense coverage- will you leave debts behind? Do you want to leave enough money to pay for your final expenses with some left over to pay other expenses you may leave behind?
- Charitable giving- If you routinely donate money to a charity, you may want to do so with a portion of your life insurance.
- Estate planning- Do you have a large enough estate where there will be significant taxation at your passing? Do you want to provide enough cash to cover the tax liability without your heirs having to liquidate any of your estate?
- Securing a loan- Are you still in business and getting a loan? Do you have a mortgage that you would like your spouse or heirs to be able to pay off?
- It's a good financial investment for your beneficiary- Life insurance is often an excellent investment for your beneficiaries at this stage of your life. Although you don't directly benefit, it leaves behind a (usually) tax free cash payout for your family.
- Any other reason you may personally have- We can't figure all the reasons you might want coverage, but as long as you can qualify for the coverage, it is available! Here's some good news...you can get coverage up to age 90!
What Kinds of Coverage Can I Still Get?
We offer many choices for seniors over 70 getting life insurance. You can purchase term coverage, whole life insurance, universal life, or possibly convert a current term policy to permanent coverage. Let's delve a little deeper into these choices.
Term Life Insurance- This type of insurance is to cover a specified time period. You would only consider a term policy in your 70's if you only needed coverage for a limited period, for example, if you were guaranteeing a loan. Some companies offer 10 year term coverage up to age 80, but not all of them. Even fewer offer 15 year term policies in your 70's. Depending on your situation, you may find that term life insurance at this age does not offer a significant cost saving over a permanent coverage.
Whole Life Insurance- There are many kinds of whole life policies. We commonly use Final Expense coverage and Guaranteed Issue Policies (see below for more detail). Final Expense policies are available up to age 90. They have "simplified issue" underwriting. That means: there is no medical exam needed and the medical guidelines for approval are relaxed compared to fully underwritten policies. You have to answer a number of medical questions. Then the insurance company will check a couple of databases to confirm your answers. This is a favorite of people looking for final expense coverage especially if you are looking for coverage from $2,000 up to $25,000. (Some companies offer more coverage, or you can purchase policies from more than one company if you want more insurance.) These policies are usually approved in just a few days. There are two versions: level coverage which starts on day one and graded coverage which phases in over a period of two or three years.
Universal Life Insurance- This type of policy is a very flexible type of permanent coverage. These policies can be shaped to match your needs. Premiums can remain level, or change over time, you can have the policy grow cash value, and more. This is a fully underwritten policy meaning a a paramedical exam including blood and urine testing is required. The insurance carrier may order your doctor records. They follow specific guidelines for underwriting so each company is slightly different from the others. This is good for you since your agent should be familiar with the variance from one carrier to another so they can place you with the one that will look most favorably on your application. If you are looking for over $25,000 of coverage this may be the best option for you. It is likely to be the best buy if you can qualify at a good rating. Certain carriers have special programs they may offer for life insurance for seniors over 70 that may allow you to receive a better rating than you would normally be able to get, thereby reducing the premium. Talk to your agent to see if you qualify!
Guaranteed Issue Coverage- This is insurance you can buy if you cannot qualify medically for any other coverage. There are no medical requirements. All applicants are approved. This coverage is available up to and including age 80. The coverage does not take effect for the first 2 years. (If you were to pass away during the first 2 years for any medical reason, your beneficiary would receive the premiums you paid plus interest. If you died from an accident, they would receive the full face amount.) $25,000 is generally the most coverage offered by any company. As you may imagine, this is the most costly type of life insurance available because there is no medical underwriting and they will accept all applicants. It is a great option for those who can't qualify for traditional life insurance.
As you can see, each of these policies has very different underwriting requirements. How to decide? Your reason for coverage, health, age, and budget are just some of the factors that will help determine which policy will best meet your needs. It doesn't have to be a complicated equation, but understanding your needs will help us help you to choose the best type of coverage at the best pricing.
What is Term Conversion?
All term policies come with a conversion option. That means, during a specified period of time you can change your term policy into a permanent policy with no additional underwriting. You will receive the same health (underwriting) rating for your new policy but it will be priced based on your current age and the amount of insurance you are converting.
If you currently have a term policy in force and you have had major health changes since the policy began, conversion may be the best choice. You have to compare what the pricing for your current health rating is likely to be alongside the pricing for converting your term policy. This is easy for an agent to do.
Each insurance company has different conversion options. How long is the policy convertible? It can be a specific number of years, up to a certain age. What policy(s) can you convert the current term policy into? Permanent policies differ in their cost based on the specific benefits they offer and how the policy is structured. What is the minimum amount you have to convert, it may be $25,000 or it may be $100,000? Can you keep the balance of the term policy in force if you want or do you have to give it up?
There are many things to know about conversion that your agent can explain to you. The most important thing to remember is that even if you are currently uninsurable, if you are in the proper time period, you can convert your term policy into a permanent policy. This can be a very valuable benefit, and it comes at no cost in all term policies.
The Bottom Line-
Why You Need An Independent Life Insurance Agent
As you can see, there are so many different options and considerations that go into your decisions about life insurance for seniors over 70 (or even under 70!)
While you may be able to get some quotes by yourself online, you have no way of knowing if you can get policy with better options. Can you qualify with that specific carrier? Are there less expensive options that are just as good or better? How strong is the company?
Every company has slightly different questions on their applications. That little difference can be the difference between an approval and a decline. Our underwriter (independent) is always available to help if we have questions about your ability to qualify. It's just another instrument in our toolbox.
An experienced independent life insurance agent will help you determine what your different options are, what the best priced option will be, why one choice makes more sense than the other and how to proceed. Use an independent agent to your advantage and get the best insurance deal you possibly can!