A life insurance policy is your guaranteed way to make sure that your loved ones aren’t financially burdened by your death. You are in the right place; we will guide you to the best life insurance for seniors over 70.
The payout from this policy can go a long way in helping with your funeral and all of the costs that come with it, as well as finalizing any debts that you leave behind.
However, setting yourself up with a policy later in your life can come with many stresses of its own, as many insurers refuse to provide coverage for people over a certain age, so finding life insurance for the elderly over 70 can be a bit tricky.
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Do You Need Life Insurance For Seniors Over 70?
The modern reality is that we are not as financially sufficient in our later years as we hope to be.
The rate of seniors with debt is substantially rising, thanks to the increasing trend of non-mortgage debt that this age bracket is taking on.
That’s why life insurance is especially important – the ability to take care of your debt upon your death means that your family will not be financially encumbered by your debts.
While it may not be easy to find an insurer to provide you with coverage in your later years, it is not altogether impossible.
The average life expectancy in 2018 for a North American is 80 years, so these insurance policies will expect to pay out within ten to twenty years or so.
Providers may charge high premiums to offset the risk that comes with this kind of policy, and this may not always be affordable for the older generation.
Here, we take you through the factors to consider when looking for a life insurance policy to cover you in your later years.
Types of Life Insurance For Over 70
Just like every other choice you have to make in life, choosing your insurance policy requires some careful analysis of your needs.
There are many different types of life insurance for seniors over 70, and the appeal of each will depend on your specific life circumstances.
Policies range from the basic to the highly customized, and here, we present you with a guide on the different kinds of policies available and what they entail.
Term Life Insurance for Seniors Over 70
The most basic type of policy is the term life insurance policy. What this policy will offer you is pure death benefit protection.
This means that there is no cash value that builds up over the term of the policy, and because of this, these policies tend to be the cheapest option available.
Term policies are usually purchased for a set amount of time, after which you will need to reapply for a new policy or let the policy terminate.
There is no payout if the policy expires, and the cost of the policy is highly dependent on various risk factors such as age and health status.
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Decreasing vs Increasing Term Insurance
Decreasing term insurance policies will pay a death benefit that goes down over time, despite your premium stays the same across the term of the policy.
This type of policy is best for situations where you want the value of a decreasing debt, such as a mortgage, to be paid upon your death.
The opposite type of plan is an increasing term policy, where you expect that your cost of living will rise over time due to factors such as the growth of your family.
Different Types of Permanent Life Insurance
Permanent life insurance is different from a term policy because there is no time limit to the coverage.
As long as you pay your premiums, you will be covered for the rest of your life.
Permanent policies also feature a savings component that is paid out upon your death in addition to your death benefit.
You can also borrow against this cash buildup after a specified waiting period. Permanent life insurance describes many subtypes of coverage which we will now explain.
Whole Life Insurance
Whole life insurance is the most basic type of permanent coverage. Premiums are unchanged over the lifetime of the policy but tend to be higher than those that are charged for term coverage.
While this gives a benefit to younger purchasers, as the premiums will not change even when serious health issues arise, they can still be of benefit to the older generation.
In fact, whole life insurance policies can often be the most commonly offered to seniors.
Universal life insurance is another form of permanent coverage that affords you extra flexibility when it comes to how you direct the value of the premiums you pay. T
his means that you can decide how much value goes to your death benefit, and how much is stored in the savings component of the policy.
There are certain guidelines that determine the limits of these choices, but overall, this is a good way to ensure that you have access to a tax-deferred amount of money whilst preparing for your death.
Variable Life Insurance
The third type of permanent coverage is variable life insurance.
Again, these policies offer both a death benefit and a savings component; however, this policy allows you the ability to grow your funds even further by using investments.
The downside of covering yourself in this way is that there is a certain degree of risk inherent in investing.
While variable policies allow you to invest in equities, variable universal policies enable you to target other types of investments.
Survivorship Life Insurance
If you want to cover more than one person, then survivorship life insurance has the ability to provide that service.
This type of coverage is similar to a variable permanent policy, as it provides both a death benefit as well as a cash payout, but the policy is not paid out until both of the covered individuals have died.
Again, the cash component can be invested at the risk of the policyholder, and the policy allows you to build an estate. These types of policies tend to be cheaper than single-insured policies.
Final Expense Life Insurance – Most Popular
Funerals can cost a lot of money, as there are many expenses to cover such as burial, flowers, service, and headstone.
Without considering these costs in advance, your family will be the ones burdened by this cost which can be as high as $10,000.
Final expense insurance is designed to cover these costs and is usually available as either a term or a permanent policy.
Premiums tend to be low no matter what stage of life you purchase the policy.
No Medical Exam Life Insurance
Medical exams are an integral part of many life insurance policies, as the insurer needs to be aware of the risk of insuring an individual.
This can lead to higher premiums for people that have serious conditions that may shorten their lifespan, or can even lead to denial of coverage.
There’s often no way to get around this as most insurers will require blood work and physical examinations before coverage will be provided.
No medical exam life insurance, on the other hand, does not require rigorous health testing and is therefore available for a wider range of people, though often at a higher cost.
Best Type of Life Insurance for Seniors Over 70
Now that we’ve explained the different types of life insurance policies available to you, as well as the types of benefits they provide, you can start to see why some policies are more suited to seniors than others.
Term policies aren’t the best option for seniors because the terms are often longer than the life expectancy of the insured individual.
There are term insurance policies that are designed for seniors that last for one to five years, but as these will need to be renewed after the term, the price of the premiums will continue to rise as long as you want to keep the policy.
The Best One!
Permanent life insurance policies are the best option for seniors, as the premiums stay the same during the course of the policy.
This means that you will always be able to budget for your premiums, no matter your life expectancy.
Unlike with term policies, which only pay out the benefit if you are within the term, your beneficiaries will be guaranteed the death benefit payout.
Another Option – Small Coverage
The no medical exam and final expense insurance policies are also appealing for seniors. Even, we have clients over 90, who are buying this policy.
If you are affected by a chronic health condition that may preclude you from standard coverage, or if they drive your premiums too high, then the no medical exam policy can enable you to have coverage regardless of your health.
The final expense policy is perfect for people who want to ensure that there are no costs associated with their passing that can be shouldered onto their loved ones.
These plans tend not to have any waiting periods associated with them, and the premiums are usually a fixed price across the length of the policy.
As these plans are very low cost, they are perfect for people who just want to make sure that their end-of-life costs are covered.
Overall, the general consensus is that if you can qualify for and affords a permanent insurance policy such as whole life or universal life insurance, then it makes the most sense to go for one of these plans.
These policies have the most payout capacity of all of the options, and the cash value capacity and fixed cost of premiums have a huge benefit over any of the other policies.
What Should I Look for in a Life Insurance Policy?
Your personal needs are going to be different from the needs of others, so it is important that you find a policy that is tailored to suit your circumstances.
Flexibility is one important policy aspect that you should look for, and this might be found in the range of payment options available to you or the ability to modify the policy if you so choose.
Without flexibility, you may become stuck in a policy that isn’t working for you without any recourse.
Another aspect that you should look for is the range of coverage that the insurer provides.
Some providers may offer death benefits only, but others may offer a full range of packages that include living benefits as well.
It’s best to consider all options available before choosing, as while some additions may not seem necessary now, this may change in a few years.
There are other aspects that may make a difference in the experience you have with your insurer.
For instance, if an insurance provider has great customer service, then this will help you in the case that you need to change anything about your policy. The easier it is to manage your policy, the happier you will be.
Things to Consider When Choosing a Policy
Acquiring life insurance as a senior is really a very good idea, but there are a number of factors you need to consider in order to tailor your policy to suit your individual circumstances.
These considerations can make a huge difference in how much you pay for your policy and what sorts of benefits your beneficiaries will receive.
Your eligibility depends on a number of factors
As is common with nearly all insurance policies, your eligibility is going to be dependent on a number of risk factors that will determine the type and cost of insurance available to you.
The most common general eligibility requirements are that you begin your plan before a certain age – usually sometime in your 80’s – and that you must pay your premiums for a minimum amount of time before you can receive any benefit.
Your general health will not prevent you from purchasing a life insurance policy, but you will find that it can affect the amount that you pay in premiums.
One of the most common reasons for higher premiums is high blood pressure. If you think your health may drive your premiums up too high, it might be worth considering a no medical exam life insurance policy.
The earlier you find a policy, the cheaper it will be
There’s no way to get around it: now that you’re a senior, the cost of your life insurance is going to be far higher than it would have been had you have gotten coverage in your younger years.
However, don’t use this as an excuse to leave yourself uncovered, as there are still going to be costs incurred as a result of your death that you need to plan for.
Insurance is far cheaper at this age than it is life insurance for seniors over 75, and the health issues you are likely going to be experiencing closer to the end of your life may mean that the costs of some insurance policies are prohibitive.
The differences in the cost of a particular policy over the course of a year can also increase drastically when you’re a senior.
This means that for each year you wait to get coverage, the cost of any particular policy will increase substantially compared to the cost increase per year of a younger person.
If you’ve been thinking about purchasing a policy, it is definitely smarter to do it earlier rather than later.
With each year, you become closer to your life expectancy, hence the increase in your cost to insure. The bottom line is that now is the best time to acquire your coverage.
You can add a long-term care rider to your policy
As you begin to near the end of your life, your needs are going to change. Where you were once able to do everything for yourself, you may now find yourself needing a little extra help to get things done.
This can be influenced by disease, immobility and general weakness felt by your aching body.
In order to prepare for this potential part of your life, you can add a long-term care rider to your policy. If you do require care later in your life, then this addition will help to provide for that.
In the event that you need long-term care, a portion of your death benefit can be used to cover this cost, but it does mean that your beneficiaries will receive a lower payout upon your death.
Tax advantages of life insurance
Life insurance policies offer benefits that extend far beyond the payout that your beneficiary receives upon your death.
We have talked before about the savings capacity that a life insurance policy offers in the cash value of the policy. There are immense tax benefits that come alongside these cash buildups.
If you are familiar with IRAs and 401ks, then you can understand the opportunity that the cash value holds for you.
The cash value of your policy is invested in either equities or mutual funds, depending on your policy type. While these investments come with a certain amount of risk, the tax rewards you get may sway your decision on which to choose.
You earn annually on the investment, and these earnings don’t get taxed. In addition, when you cash out the policy, the death benefit is paid tax-free.
You also won’t be taxed when you borrow against the cash value of your policy, as long as you’re borrowing less than the amount you’ve paid in premiums across the life of the policy so far which is another way you can benefit from your policy.
Should I Get Life Insurance as a Senior?
You might think that purchasing a life insurance policy so late in life means that you won’t have enough time to really build up the cash value of the policy before the end of your life, and therefore it isn’t really worth it to be paying such high premiums in your last days.
You’d be forgiven for having this opinion because it makes perfect sense.
However, more and more seniors are finding that leaving a death benefit to their beneficiaries is something they want to do.
Whether it’s your family or even a charity that means a lot to you, having this money available upon your death can give you a way to leave a final lasting impression and make a difference in someone’s life.
What it comes down to is the fact that life insurance isn’t really there to benefit you.
So no matter what your opinions are on the money that you spend on your policy, what you’re really trying to do is make life easier for the beneficiary of your policy.
When you think about it like that, it makes sense, right?
How to Find the Best Life Insurance Over 70
The best way is to compare quotes using our free quotes. We offer quotes from the top providers and you will get the best deal.
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Finding a life insurance policy that is best for you and your circumstances can be hard as there are so many variables to consider.
More and more people are turning to insurance brokers in order to help them navigate this complicated area.
A broker like we have a vast knowledge of the various types of policies that are available and which insurance providers can provide coverage for seniors, so by utilizing their services, you know that you’ll benefit from their experience and know-how.
At the end of the day, if you want to get a good deal on your insurance, then a broker is the way to go.
Deciding to take out a life insurance policy so that you can reduce the financial burden associated with your passing on your loved ones whilst providing for them after you’re gone is a smart idea, but finding a policy that will cover you in your senior years seems like it might be a challenge.
Thankfully, there are many options available to you regardless of your age that is designed to meet the requirements you have at this late stage in life.
By doing your due diligence, you can find a policy that meets your specific requirements that fit your budget so that you can relax and enjoy the rest of your life without financial worry.