Life insurance serves a purpose at any age, even when you are over 65 years old.
While getting older makes it a bit more difficult to find coverage, there are still many insurance options for people in this age group.
The application process and market is a bit different for older applicants though.
If you are interested in life insurance for people over 65, there are a few key pieces of information you should know beforehand.
Uses for Life Insurance
As you get older, some of your life insurance needs go away. For example, once you are 65 or older chances are you no longer need insurance protection to support your children. However, there are still a number of benefits to staying insured.
Eventually, everyone dies and this can be fairly expensive. Not only will your heir need to pay for your funeral, but they may also need to cover your unpaid debts. With life insurance, you make sure everything is taken care of. In addition, people are living longer these days and many find they need to work past age 65. If your spouse is still depending on your income, you’d want life insurance to replace this income should you die.
Lastly, you can use life insurance to provide an inheritance to your heirs. This is a great way to support your children and grandchildren by giving them extra money for a home or their educations.
Term versus Permanent
When you look for life insurance, you’ll have the choice between two main types of policies: term and permanent. Term insurance is temporary coverage for a set number of years. If you die during this time, your heirs receive the death benefit. If you don’t your coverage expires. Permanent coverage lasts your entire life.
For the same amount of coverage, permanent insurance is more expensive than term insurance; that’s the tradeoff of getting coverage that never ends.
The right policy for you depends on your goals. If you just want to extend your coverage for a few years, maybe until you finish working or to pay off your debt, term is a better choice. Keep in mind that once your coverage expires, it will be very difficult to buy another policy. Most insurance companies refuse to sell insurance to people above a certain age.
If you want to leave behind a death benefit for sure, than permanent coverage is a better choice. Permanent insurance is better for covering certain needs like your final expenses or an inheritance. In this situation, you’d be better off buying a smaller permanent policy than a larger term one. Your heirs would be better off receiving some money for sure than to gamble on possibly receiving money from temporary coverage.
Here are a few examples of what a $250,000 policy would cost for term and universal life insurance.
|$250,000 Face Amount||10 Year Term||15 Year Term||20 Year Term||Universal Life Policy|
|Minnesota Life |
Applying for a Policy When Over 60 Years Old
Applying for life insurance when you are 65 or older is pretty similar to applying at a younger age. You’ll need to contact a life insurance company and put together an application. On your application, you’ll need to list how much coverage you want and answer some health questions.
From there, it depends on the amount of insurance you want to buy, your age, and your health. For smaller policies of only a few thousand dollars, you may be able to qualify just with your application. For larger policies, you will likely need to meet a nurse or doctor for a health exam. If you have any health problems, you might also need to take a medical test like an EKG.
Insurance companies tend to review your health more as you get older as there is a greater chance that you have medical issues.
If you can’t qualify for a normal life insurance policy, you still could buy guaranteed coverage life insurance. These policies are designed for older Americans that have health issues. When you apply for guaranteed coverage, you won’t have to take a medical exam. Many policies don’t look at your health history either.
In exchange, you can only purchase a limited amount of life insurance, usually $50,000 or less. The coverage will also be more expensive than traditional life insurance and likely will have a waiting period of a few years. What this means is if you die during your policy’s waiting period, your heirs will only receive a percentage of your death benefit; they won’t receive the whole thing. Once you outlive this period, you’ll go to full coverage.
Finding the Right Choice
Many different life insurance companies sell to the 65 and older market so you’ll have plenty of options to choose from. This can sometimes be a bit overwhelming as it’s not always easy to figure out which company is best for your needs. Working with an independent life insurance broker like our company can help.
Our company works closely with applicants over 65 years old so we know this market very well. We can help you with your application and match you up with the best companies for your situation. Since we aren’t working for any one company, we’ll be able to give you an unbiased opinion of your options.
To learn more about getting life insurance over 65 years old, call or fill out our online application form for free quotes.
This post is featured in the Cavalcade of Risk Carnival at Healthcare Economist.