Life Insurance for Seniors Over 70
Can you get affordable life insurance in your 70s? And is a no medical exam policy possible? Find out about the best life insurance for seniors over 70.
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- What Are the Life Insurance Options for Seniors Over 70?
- Whole Life Insurance Options for Seniors Over 70
- Term Life Insurance Options for Seniors Over 70
- Is Term Better Than Whole Life Insurance for Seniors Over 70?
- What If I'm Denied Life Insurance?
- How Much Can Someone Over 70 Expect to Pay for Life Insurance?
- What If I Can't Afford Life Insurance?
- What's the Best Way for Seniors Over 70 to Purchase Life Insurance?
What Are the Life Insurance Options for Seniors Over 70?
Seniors over 70 have numerous options in whole life and term life insurance. (More on each below.)
In fact, some life insurance companies specialize in insuring adults who are:
- Ages 70 and older
- High risk
- Usually uninsurable due to pre-existing conditions
Life insurance options for seniors age 70 and older are NOT limited or highly priced.
Many life insurance companies have affordable plans and coverages to meet your specific needs, regardless of your age. (More about them in the next section.)
First, however, you need to know why you are buying a policy. The "why" helps determine how much coverage you need and the type of policy that's best for your situation.
Some questions to ask yourself to determine your "why" are:
- Do I want life insurance just to pay my funeral and burial expenses so as not to put the cost burden on my family?
- Do I want life insurance to cover my mortgage if I die before my house is paid up?
- Do I want a life insurance policy that gives me some income to live on and provides death benefits?
- Do I want life insurance to make sure my family is not burdened with my estate and business expenses after I'm gone?
- Do I want a life insurance policy for my surviving spouse's financial security?
- Do I want life insurance so I can leave my loved ones with money for special life events, like college, getting married, buying a house, etc.?
Important Steps Before You Get Started
Now that you've considered these questions, follow these steps BEFORE looking into the different types of life insurance.
- Write down the things you want your life insurance policy to pay for. Here's some things to consider:
- Cars, homes and other things you are currently paying loans on.
- Anyone who currently relies on you financially.
- Funeral and burial planning, plus any special requests that will add to standard expenses.
- What you're leaving behind, such as an estate, a business, rental properties, or anything else, where taxes and other expenses must be paid by your loved ones.
How much you can afford to pay is equally important. Seniors over 70 have very different financial situations.
Some are just getting by on Social Security income. Others have sufficient retirement income plus Social Security.
Older seniors may have gained wealth through owning property. Others are still paying for a mortgage on their retirement home.
- Take a look at your monthly budget - what is your income versus your expenses?
Be sure to allow for unexpected costs like home repairs or opportunities like occasional vacations.
Estimate how much money you have left over each month. This amount gives you a ballpark figure of what you can afford to pay monthly for life insurance.
Remember: Both the "why" and what you can afford play key roles in deciding the right life insurance option for you.
Now let's take a closer look at the life insurance plans available for seniors over 70.
Whole Life Insurance Options for Seniors Over 70
Whole life insurance is also known as permanent life insurance or universal life insurance. It never expires and covers you for the rest of your life.
Know the key difference between the two main types of life insurance.
Unlike whole life, which never expires, term life insurance provides benefits only if you die within the policy's covered term. Keep reading to learn more about that option.
Whole life provides seniors over 70 with a fixed premium amount, guaranteed death benefits, and cash value. This cash value builds as you pay your premiums, with interest added to the amount.
Depending on the type of whole life insurance, you can use the cash value to:
- Pay off the rest of your premiums
- Take out a loan
- Increase your life insurance policy's death benefits
- Invest it in the stock market
- Guaranteed Issue Whole Life Insurance: For seniors with some health issues.
This policy ensures you will not be denied coverage, regardless of your medical history. It is designed for seniors up to age 85 with medical conditions that could prevent them from getting life insurance.
It requires no medical exam. Additionally, no medical or health questions are asked during the application process. If you submit an application, you are automatically approved.
FYI:
Guaranteed issue whole life insurance is also known as life insurance for elderly, final expense insurance, burial insurance, and senior life insurance.A guaranteed issue whole life policy is a bit more expensive. However, you can offset the cost by getting only the minimum coverage amount that you need.
The amount of coverage available ranges from $5,000 to $25,000. Smaller coverage options appeal to seniors who just want life insurance to pay for funeral and burial expenses or to pay off debts.
As a plus, the policy builds cash value, which can be used to pay your premiums over time.
- Guaranteed Universal Life Insurance : For older seniors looking to lock in lifelong coverage at an affordable rate.
Commonly sold as a GUL policy, this type of policy usually requires a medical exam. But the guarantee in this policy means your coverage and premium amount will remain the same, regardless of your health or age.
You choose the amount of coverage you want, from $100,000 to $1 million. The policy guarantees your death benefit and premium remain the same up to the age you select, which can be as high as 121 years old!
It is less costly than guaranteed issue whole life insurance because it does not build cash value.
However, you can choose higher coverage amounts. That makes it a good vehicle for anyone over the age of 70 who wants to leave a tax-free inheritance to their loved ones.
- Simplified Whole Life Insurance: For older seniors looking for a policy to pay for funeral and burial costs, as well as other debts.
Also called simplified issue life insurance, this is a more cost-effective policy for seniors in reasonably good health.
No medical exam is required. However, you have to answer a comprehensive medical questionnaire.
This lets the insurance company know what type of risk it is insuring. Simplified whole life insurance coverage amounts are available up to $50,000.
FYI:
Simplified whole life insurance does NOT build cash value. But if you're in good health, your premium will be less than that of guaranteed issue whole life insurance.Approval is not guaranteed, but if you're denied coverage, you can reapply for a guaranteed issue policy.
- Second-to-Die Insurance: For over-70 seniors looking to protect their estate or ensure their surviving spouse is cared for.
This type of coverage ensures your surviving spouse's funds are not depleted by paying estate taxes.
FYI:
Second-to-die life insurance is also known as survivorship insurance and dual-life insurance.With this type of policy, death benefits are paid to your heirs after both you and your spouse are gone. The policy can be structured to reduce or eliminate estate taxes and cover the costs of estate settlement.
A second-to-die insurance policy also serves seniors who have adult children with disabilities who rely on their income. When both spouses die, the individuals named on the policy receive the death benefits.
Married couples realize another advantage with second-to-die life insurance. Taking out just one policy is more cost-effective than two separate life insurance policies.
However, be certain you have funds available to pay for funeral and burial costs when the first person dies.
Keep reading to learn more about term life insurance.
Term Life Insurance Options for Seniors Over 70
Often, seniors over 70 are only looking for death benefits. That's what term life insurance is all about - it provides death benefits if you die within the covered term.
Some important things to know about term insurance:
- It expires once the term is over, meaning it doesn't last your entire life.
- If you live beyond the term's expiration, no benefits are paid even though you paid premiums.
- Many life insurance companies set the maximum age to apply for term life at 75 or 80.
- Most term life insurers limit the coverage amount to $100,000 for seniors over 75.
- Guaranteed Level Term Life Insurance is the most popular plan.
Guaranteed means the death benefit amount and your premium amount do not change during the entire term. The policy has a renewal option that may not apply depending on your age.
- No Medical Exam Term Life Insurance is for those seniors who are in poor health. Also known as simplified term life insurance, it doesn't require a medical exam.
However, you have to answer some health questions and the insurance company checks your medical history.
Since you are not taking a medical exam, the cost for this type of policy can be as much as 80% more than level term life.
Key Point:
If your medical records raise a red flag, the insurance company may require you to take a medical exam. - Return of Premium Term Life Insurance refunds the premiums you paid if you outlive the term of the policy.
This policy costs about 30% more than standard term life insurance. But the refund is tax-free.
For older seniors, this additional cost may be worthwhile. This type of policy addresses situations older seniors often find themselves in when their term policy expires.
They have nothing to show for all those years of paying higher costs. With a return of premium, you can use the refund to offset the higher cost of your next term.
- Annual Renewable Term Life Insurance is for seniors looking for short terms. The policy renews on a year-to-year basis.
The premium amount is low in the beginning. But the rate increases each year it is renewed. Coverage is guaranteed renewable up to age 90.
Is Term Better Than Whole Life Insurance for Seniors Over 70?
It depends on your situation.
Term Life: The most cost-effective option on a short-term basis.
Whole Life Insurance: Better for seniors over 70 over the long term.
That's because as you keep renewing term life, the premium amount is almost equal to whole life insurance. At that point, you're paying the same without the additional benefits of whole life.
Here are some examples showing how monthly premiums for term life catch up with whole life as you age. The estimated premium amounts are per month for a $100,000 life insurance policy.
| Policy Costs at Age 72 | |
|---|---|
| Term Life Policy | Monthly Cost |
| 10-year | $141.55 |
| 15-year | $227.38 |
| Whole Life Policy | Monthly Cost | Up to Age 90 | $256.05 | Up to Age 95 | $291.54 | Up to Age 100 | $312.28 |
| Policy Costs at Age 75 | |
|---|---|
| Term Life Policy | Monthly Cost |
| 10-year | $186.30 |
| 15-year | $322.50 |
| Whole Life Policy | Monthly Cost | Up to Age 90 | $314.00 | Up to Age 95 | $369.30 | Up to Age 100 | $399.75 |
| Policy Costs at Age 79 | |
|---|---|
| Term Life Policy | Monthly Cost |
| 10-year | $401.40 |
| 15-year | NOT AVAILABLE |
| Whole Life Policy | Monthly Cost | Up to Age 90 | $415.00 | Up to Age 95 | $496.90 | Up to Age 100 | $536.95 |
As the examples illustrate, once you turn 75, the cost of term life insurance nearly matches that of whole life insurance.
So the better value at that point is whole life because the coverage never expires. With term life, the coverage ends when the term is up.
Whether term life is better than whole life depends on your situation.
Seniors over 70 who only want coverage for another 10 to 15 years will find term insurance sufficient.
But life insurance companies limit term life acceptance after a certain age. For example, only 10-year term insurance with a $100,000 coverage amount is available after age 75.
Seniors also have to a term expiring at age 70 and being stuck with high premiums every 10 years to renew the policy. In these situations, transitioning to a whole life insurance policy may be a more cost-effective option.
What If I'm Denied Life Insurance?
Not everyone who applies for a certain life insurance policy will be accepted. Life insurance companies may deny an application because the person is too much of a risk.
What makes someone a high risk? Some factors are:
- Pre-existing conditions
- A family history of cancer or heart disease
- Being a smoker or tobacco user
- A chronic illness, such as cancer, diabetes, emphysema, obesity, etc.
- Risky behavior, like riding a motorcycle or skydiving
- Your age
Just because your life insurance application was denied doesn't mean you can't get life insurance. It simply means you didn't qualify for the type of policy you requested from that company.
Here are some tips to help seniors over 70 secure life insurance:
- Find out why your application was denied. Upon request, the life insurance company is obligated to provide you detailed information why your application was not approved.
Review the decision and make sure the information is current and correct. See if there is anything you can do to fix the issues.
- Apply for a life insurance policy that does not require a medical exam. They're the ones that usually have the phrases "guaranteed acceptance," "guaranteed issue," or "no medical exam" as part of their policy name.
- Talk with your insurance agent. Some life insurance companies are not as strict with their underwriting guidelines. You might be a high risk for one company, but only a moderate risk with another.
- Look into life insurance through a group. Perhaps you belong to a national motor club, a senior interest association, a fraternal order, or a social organization. They often offer group life insurance policies in which all members are accepted.
Remember: Seniors over 70 CAN get life insurance, regardless of their age, pre-existing conditions, or declining health. It's just a matter of finding the right life insurance carrier.
How Much Can Someone Over 70 Expect to Pay for Life Insurance?
The cost of life insurance for older seniors depends on
- Age
- Health
- Policy type
However, you need to weigh the benefits of whole life against the cost. A built-in savings vehicle and coverage for life may be worth it for you.
Term Life Insurance Cost Examples:
Here's a look at what you can expect to pay monthly for a 10-year term life insurance policy if you are in your 70s.
| $100,000 Coverage | |
|---|---|
| Age | Monthly Cost |
| 71 | $105.15 |
| 72 | $115.00 |
| 73 | $126.20 |
| 74 | $138.60 |
| 75 | $151.30 |
| $250,000 Coverage | |
|---|---|
| Age | Monthly Cost |
| 71 | $235.35 |
| 72 | $262.50 |
| 73 | $293.75 |
| 74 | $327.60 |
| 75 | $363.00 |
| $500,000 Coverage | |
|---|---|
| Age | Monthly Cost |
| 71 | $455.50 |
| 72 | $506.30 |
| 73 | $567.00 |
| 74 | $637.00 |
| 75 | $713.00 |
For those in their 80s, 90s and older, the above rates increase between 9% and 12% for each year.
However, if you lower the coverage amount, it becomes more affordable. For example, the estimated monthly cost for 10-year term life insurance for an 80-year-old would be:
| Coverage | Monthly Cost |
|---|---|
| $25,000 | $209.90 |
| $50,000 | $414.50 |
| $75,000 | $619.15 |
Whole Life Insurance Cost Examples:
The cost of whole life insurance greatly depends on:
- The type of policy you purchase
- The age at which you purchase it
For comparison purposes, the following estimated monthly rates are based on a whole life insurance policy for a 75-year-old.
| Coverage | Monthly Cost |
|---|---|
| $25,000 | $236.80 |
| $50,000 | $429.40 |
| $100,000 | $840.50 |
| $250,000 | $2,090.00 |
| $500,000 | $4,175.60 |
| $1,000,000 | $8,337.25 |
On the other hand, a guaranteed universal life (GUL) insurance policy is less costly for seniors over 70. That's because it doesn't build cash value like whole life.
For example, here are the estimated monthly premium amounts for a GUL policy for an 80-year-old. Note: The costs are less than the above term life insurance costs for an 80-year-old.
| Coverage | Monthly Cost |
|---|---|
| $25,000 | $139.15 |
| $50,000 | $273.00 |
| $100,000 | $535.75 |
| $250,000 | $1,305.00 |
When looking at the cost of life insurance over age 70, knowing why you want life insurance is a key factor. It can definitely save you money by not overinsuring yourself.
What If I Can't Afford Life Insurance?
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Many seniors over 70 can't afford life insurance. Yet, they don't want to leave family members footing the bill for their funeral and burial expenses and any other debts they may have.
It's important to talk to family members about your situation. Someone should know about your wishes when you're gone and how to pay for your funeral and burial expenses.
Your adult children or other family members may offer to take out a life insurance policy for you. In these instances, the policy is in your name, but the premiums are paid by your family member(s).
You still need to complete the application process, answer questions about your health and take a medical exam, if required.
Life insurance companies do not offer coverage to someone in a retirement home or nursing home.
If you already have life insurance and can no longer afford it, here are some ways to avoid canceling your policy:
- Lower the face value of your policy.
- Ask the beneficiaries listed on your policy to help you with the premium payments.
- If you have a whole life insurance policy, use the cash value to pay your premiums.
- You may be able to transfer your whole life or term life policy into a less expensive plan.
- Sell your life insurance policy to a third party for three times the policy's cash surrender value.
You can then put the cash payment you receive into a savings account for your funeral and burial expenses or purchase a more affordable life insurance plan.
The person you sold the policy to pays all future premiums and receives its death benefit when you're gone.
- Talk with your insurance agent about your current situation and the options you may have.
In most cases, you can find a solution for your financial situation. An insurance agent, your financial adviser, or a family member are good resources to start a discussion about your life insurance concerns.
Best Way for Seniors Over 70 to Purchase Life Insurance
Some insurance companies specialize in senior life insurance products. But they don't always have the best rates, so shop around. You can:
Contact an independent insurance agent in your area: These agents have access to insurance plans from many different insurance companies.
They know which companies have policies that cater to seniors and their unique coverage needs. Agents can easily compare plans and rates to find a life insurance solution that addresses your needs.
Go online to get quotes: You can get free quotes from several insurance companies simply by answering a short, online questionnaire.
No personal information is required unless you take the next step and apply for the policy. All the details about the company and the life insurance policy are included with the quote to help you with your decision.
You can also look into group plans. Even if you're no longer working, group life insurance plans are offered to seniors through nationwide auto and travel clubs, organizations, and senior associations.
Bottom Line
Being over 70 doesn't mean you can't get life insurance. It will cost more because of your age, but there are affordable options.
Knowing why you want life insurance and how much you can afford to pay are key factors in determining the right life insurance policy for you.
If you already have life insurance with a term that's about to expire or a policy you're struggling to afford, there are budget-friendly solutions available.
Tap into online resources or the knowledge of your insurance agent to find the best senior life insurance policy for your needs.
Write to Maryellen Cicione at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.
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