Life Insurance At 70: Is It Possible?

Life insurance is a valuable tool for people of all ages, but it can be especially important for those in their golden years. Seniors can use life insurance to ensure their family is financially secure and has peace of mind, especially as they approach retirement. While many people assume that life insurance policies become insufficient or unavailable after a certain age, this is not the case. In fact, there are several options available for those over 70, including term life insurance, whole life insurance, universal life insurance, and burial or final expense insurance.

Term life insurance covers the policyholder for a specific length of time and tends to be more affordable, but the premiums increase with age. Whole life insurance covers the policyholder for their entire life and often has a cash value component, but it is generally more expensive. Universal life insurance is a mix of whole and term life insurance, with low monthly premiums and a guaranteed death benefit. Burial or final expense insurance is a type of whole life insurance meant to cover funeral costs and other end-of-life expenses, and it is a good option for those on a fixed income or with serious health conditions.

Regardless of age, it is important to explore the different life insurance policies available to find the one that best suits your needs and circumstances.

Term life insurance

Most insurance companies only offer a 10- or 15-year term for people in their seventies. You will pay a premium for a set period to cover a specific shorter-term need. If you live beyond this time frame, your coverage will either end or become unaffordable.

While term life insurance is the most common life insurance on the market, it is not the best option for seniors over 70. Instead, seniors over 70 should consider Guaranteed Universal Life Insurance (GUL). This type of insurance offers a guaranteed age for the policy, and it allows you to keep your premiums low while still providing the necessary security.

Permanent life insurance

The two subtypes of permanent life insurance are universal and whole life insurance. Whole life insurance premiums are level for the lifespan of the policy and are managed by the insurer. Universal life insurance premiums are flexible and policyholders can be involved in the management of the investment component. Interest on the cash value of universal policies is adjusted monthly, so in times of rising interest rates, the cash value accumulates faster.

Guaranteed life insurance

However, guaranteed life insurance comes with some limitations. For example, there is usually a maximum death benefit amount of $50,000, and there is almost always a waiting period of 1-2 years before coverage starts. Additionally, the rates for this type of insurance are higher than for other types of policies.

When considering guaranteed life insurance, it is important to compare different policies and prices to find the right product for your needs and budget. It may be helpful to seek advice from a licensed insurance advisor or agent to find the best plan for your specific circumstances.

No medical life insurance

No-medical life insurance, also known as no-exam life insurance, is a good option for seniors who want convenient coverage quickly. These policies tend to be more expensive overall since they're smaller but tend to cost more per dollar of coverage. They also usually come with lower face value amounts (death benefits).

Guaranteed Issue Life Insurance

This is a type of whole life insurance that doesn't require a medical exam, making it a good option for those who want coverage quickly. These policies don't offer high face value amounts (death benefits) but can provide coverage for those who have difficulty getting approved for a standard life insurance policy.

Guaranteed issue life insurance policies often have a one-to-three-year waiting period during which coverage is not active. If the insured person passes away during this period, the beneficiaries may only receive a refund of the premiums paid.

Final Expense Insurance

Final expense insurance, also known as burial or funeral insurance, is another type of small whole life policy with no medical exam. It is designed to help loved ones with end-of-life expenses such as funeral costs and medical bills. Final expense insurance has a small death benefit but low premiums, similar to guaranteed issue life insurance. Its cash value works like other permanent life insurance policies.

Final expense insurance policies are a great option for seniors in their 70s, as they have much lower premiums than many other types of life insurance, and rather than taking a health test, you only need to answer a few simple health questions on the application.

Simplified Issue Life Insurance

Simplified issue life insurance asks a few questions about your medical history when you apply, instead of requiring a full exam. However, these policies tend to be more expensive and usually have limitations, such as a lower death benefit and a waiting period of one to two years before coverage starts.

Term Life Insurance

While term life insurance policies don't require a medical exam, they are very difficult to qualify for if you're not in great overall health or take medication. The policies don't build any cash value, and if you outlive your policy, you won't receive a payout. Although the premiums are low, buying term life insurance over the age of 70 may not be the safest choice.

Simplified issue life insurance

However, these policies tend to be more expensive and usually have limitations. For example, there may be a lower death benefit, and there can be a waiting period of one to two years before coverage starts.

• Have an underlying health condition or medical issue.
• Participate in dangerous hobbies or pastimes, such as skydiving.
• Need to get coverage quickly.

Seniors can also consider other types of insurance, such as:

• Traditionally underwritten life insurance.
• Whole life insurance.
• No-medical life insurance.
• Guaranteed issue life insurance.

Frequently asked questions