Life Insurance After 60: Affordable Options Exist

Life insurance is a useful tool to help your loved ones pay for your final expenses. While many people buy a policy when they're younger, there are several options for those over 60. The best option for you will depend on your financial situation, health, and what you want from your policy.

If you're still working in your 60s, you may want to consider a term life insurance policy to protect your income. If you're looking to cover end-of-life expenses, a permanent life insurance policy may be a better option.

Life insurance for income protection

Life insurance is a useful tool to help your loved ones pay for your final expenses. It is a safety net for people of all ages, ensuring their final expenses will be paid after they pass away so their loved ones won't have to cover them out of pocket.

If you are still working in your 60s, you may want to consider purchasing a term life insurance policy to support those who rely on your income. This will protect your income so that your loved ones will still be able to receive compensation.

Term life insurance is the cheapest and best option for most life insurance buyers who need coverage for a specific financial challenge, such as covering a mortgage or providing for a loved one. It is also a good option for those who are still working and need income protection. Term life insurance rates are fixed for the full length of the policy, so you will know exactly what you will pay each month in fees. However, the downside is that if you outlive your policy, you won't receive the death benefit, and buying a new plan will be more expensive as you age.

When it comes to term life insurance, you can choose between a term policy and a convertible term policy. A term policy is sold in terms between 10 and 30 years, but the longest policy you can buy when you're over 60 is 20 years. A convertible term policy can be changed to a permanent policy without a medical exam. This is a good option for many older adults as it gives them permanent coverage without the need for a health test.

If you are in good health, you may be able to qualify for a term life insurance policy without having to undergo a medical exam. However, if you are not in good health, you may want to consider a guaranteed issue life insurance policy, which offers more expensive coverage but without the possibility of rejection.

When deciding on the size of the policy, consider the following factors:

• The value of your assets
• The amount of cash you have in your checking, savings, and other accounts
• The number of dependents you have
• Outstanding debts such as mortgage and auto loans, medical bills, and funeral costs
• Cash gifts you want to leave to loved ones or charitable causes

Life insurance for outstanding debts

Life insurance for over 60s is a type of policy designed to pay out a lump sum to your beneficiaries when you die. This ensures that your loved ones will be financially secure after you've passed away.

There are several types of life insurance policies for over 60s:

• Decreasing life insurance: This type of policy is designed to cover a debt that you're paying off. Its premiums are cheaper because the amount paid out decreases over the duration of the policy to cover the amount still outstanding. If structured correctly, the policy ends once the debt is paid off.
• Level life insurance: This type of insurance guarantees a fixed lump sum to be paid out if you die at any point during the policy. It's a popular choice for those wishing to guarantee beneficiaries a set amount.
• Increasing life insurance: The lump sum paid out with this type of insurance increases, designed to help the cover keep up with inflation so the payout doesn't lose value over time.
• Whole life insurance: This type of insurance doesn't expire and stays in effect as long as you make your payments. The cost of the policy is more expensive the older you are, so locking in an affordable rate is key. These plans usually require a health exam, but certain types of whole life insurance (like final expense insurance) can be issued without a medical exam.
• Term life insurance: This type of insurance is in place for a pre-determined length of time. Term life insurance rates are fixed for the full length of the policy and usually require a health test. They are sold in terms between 10 and 30 years, but the longest policy you can buy when you're over 60 is 20 years.
• Universal life insurance: This is a blend of term and whole life insurance. It's a permanent policy with a guaranteed death benefit, but its monthly payments are lower than standard whole life plans. It usually calls for a health test.
• Guaranteed universal life insurance: This type of insurance doesn't require a medical test or health questions, and it has guaranteed acceptance. The payments are low, but your policy may be canceled if you miss one.

The price of life insurance for over 60s varies based on factors such as age, medical history, the amount of cover required, and the length of the cover.

When considering life insurance for outstanding debts, it's important to evaluate your circumstances and financial situation. Ask yourself the following questions:

• Do I have any outstanding debts that my loved ones would need to pay off after my death?
• What is the total amount of my outstanding debts, including mortgage, auto loans, medical bills, and funeral costs?
• Will my loved ones be able to manage these debts without financial strain?
• What type of life insurance policy best suits my needs and budget?
• How much coverage do I need to ensure my debts are covered?

By answering these questions, you can determine if life insurance for outstanding debts is a suitable option for you. It's also essential to compare different plans and providers to find the most affordable option that meets your requirements.

Life insurance for final life expenses

Life Insurance for Final Expenses

Life insurance is a useful tool for helping your loved ones pay your final expenses. Although many people buy a policy when they are younger, there are many options for people over 60.

Final Expense Life Insurance

Final expense life insurance is a whole life policy that pays medical bills and funeral expenses when you die. It is also known as burial or funeral insurance. It is a popular choice among seniors due to its affordable price, smaller benefit amounts, and emphasis on covering funeral costs.

Final expense insurance is a permanent type of insurance that doesn't expire, as long as you make your payments. It is usually used in conjunction with traditional whole and term life policies to pay funeral costs. You only have to answer a few health questions on the application, and you don't need to take a health test to get it. The rates are much lower than other insurance plans, but the payouts are also smaller, usually between $5,000 and $15,000.

Whole Life Insurance

Whole life insurance is permanent life insurance, meaning it doesn't expire. It stays in effect as long as you make your payments. The cost of the policy is more expensive the older you are, so locking in an affordable rate is key. These plans usually require a health exam, but certain types of whole life insurance (like final expense insurance) can be issued without a medical exam. A final expense whole life plan can be issued based on answers to health questions on the application.

Since whole life insurance policies build cash value and have a higher monthly cost than other plans, they may not be suitable for everyone. If money is tight, the payments may not fit into your monthly budget, and if you're in poor health, you may not live long enough to benefit from the accrued value. However, if you're in your early 60s and in good health, there are advantages to whole life insurance. For example, some policies allow you to borrow money from them, but the loan must be paid back while the owner is still alive.

Term Life Insurance

Term life insurance rates are fixed for the full length of your policy. They usually require a health test and are sold in terms between 10 and 30 years, but the longest policy you can buy when you're over 60 is 20 years. Knowing exactly what you'll pay each month in fees is helpful for seniors on a budget, especially those on a fixed income. The downside of term life insurance for seniors is that if you outlive your policy, you won't receive the death benefit, and buying a new plan becomes more expensive as you age.

Convertible Term Life Insurance

Convertible term life insurance can be changed to permanent (whole life) policies without a medical exam. Some companies offer partial term conversions, where you leave part of your original policy in place. There is usually no fee to use these options. When you convert a term life policy, the cost of your monthly payments will rise over time, but they'll be cheaper than buying a new whole life policy in your 60s.

Universal Life Insurance

Universal life (UL) insurance is a blend of term and whole life insurance. It is a permanent policy with a guaranteed death benefit, but its monthly payments are lower than standard whole life plans. It usually calls for a health test. If your budget changes or you decide you want a smaller policy, you can update your plan to a lower amount, which is cheaper than getting a new policy. Some companies also give refunds for some or all of your payments after you've had the policy for a certain amount of time, usually 20 years.

Guaranteed Universal Life Insurance (GUL)

This type of UL doesn't require a medical test or health questions, and it has guaranteed acceptance. These plans are available to seniors of all ages, regardless of their health. While the payments are low, your policy may be canceled if you miss even one payment, so it's important to make sure you always pay on time.

Finding the Right Plan

When deciding on a life insurance plan, it's important to consider your needs and what you want the plan to cover. You should also get a customized quote from two or three providers to find the best match for your budget. Working with an insurance agent can help you find the right plan for your specific circumstances.

Life insurance for senior veterans

Life insurance is a useful tool to help your loved ones pay for your final expenses. While many people buy a policy when they are younger, there are also options for people over 60, including veterans.

Veterans Affairs Life Insurance (VALife)

The US Department of Veterans Affairs offers VALife, a guaranteed acceptance whole life insurance program for service-connected veterans aged 80 and under. This program offers coverage of up to $40,000, with lesser amounts available in increments of $10,000. The elected coverage takes effect two years after enrolment, as long as premiums are paid during this period.

Servicemembers' Group Life Insurance (SGLI)

SGLI is a low-cost group term life insurance program for service members. Coverage can be extended for up to two years if the service member is totally disabled at separation. SGLI coverage is automatic for most active-duty service members, including those in the Ready Reserve and National Guard, and members of the Commissioned Corps of the National Oceanic and Atmospheric Administration and the Public Health Service.

Veterans' Group Life Insurance (VGLI)

VGLI allows veterans to convert their SGLI to a civilian program of lifetime renewable term coverage after separation from service. Servicemembers with full-time SGLI coverage are eligible to convert to VGLI after separation.

Family Servicemembers' Group Life Insurance (FSGLI)

FSGLI insures spouses and children of service members with SGLI coverage. Spousal coverage may not exceed the service member's coverage, but dependent children are automatically covered at no charge.

Servicemembers' Group Life Insurance Traumatic Injury Protection (TSGLI)

TSGLI is an automatic feature of SGLI that provides payments to service members who suffer losses, such as amputations, blindness, and paraplegia, due to traumatic injuries that occur in service. All service members insured by SGLI are automatically covered by TSGLI.

Veterans' Mortgage Life Insurance (VMLI)

VMLI provides mortgage life insurance protection to disabled veterans who have been approved for a VA Specially Adapted Housing (SAH) grant and have a mortgage on their home.

Service-Disabled Veterans' Life Insurance (S-DVI)

S-DVI is no longer accepting new enrolments. However, as of January 1, 2023, veterans with service-connected disabilities can apply for VALife.

Private Life Insurance for Veterans

Veterans can also explore life insurance options from private insurance companies. Term life insurance provides coverage for a set length of time, such as 10 to 30 years, while whole life insurance offers lifelong coverage and includes a cash value component that grows over time.

Life insurance eligibility for seniors over 60

Term Life Insurance

Seniors over 60 will find there are few eligibility restrictions for term life insurance. However, if you are over 65, the length of the policy will be restricted to 10, 15, or 20 years. All policies will require you to take a medical exam. Term life insurance is a good option for short-term needs, such as income protection if you are still working.

Permanent Life Insurance

Permanent life insurance is a better option for covering final expenses like funerals or burials. Seniors over 60 can consider guaranteed and simplified whole life insurance products, which are designed for seniors and do not have eligibility restrictions. However, these policies have coverage limits, with face values typically ranging from $2,000 to $25,000.

Other Options

If you are a veteran, you may be eligible for Veterans' Group Life Insurance (VGLI). Alternatively, you could consider burial insurance, also known as final expense or funeral insurance, which is a small whole life insurance policy designed to cover funeral costs. These policies typically offer coverage between $5,000 and $35,000 and do not require a medical exam.

Factors to Consider

When deciding on life insurance eligibility and the type of policy that is right for you, consider your financial situation, including any outstanding debts, your income, and your ability to pay premiums. Also, think about your health and how this might impact your eligibility for certain policies. Finally, consider your specific life insurance needs, such as the length of coverage required and the desired payout amount.

Frequently asked questions