Jane Dotson
Life insurance is a valuable tool to protect against potential income and other losses, but it can be challenging to obtain affordable coverage as you age. For those over 70, certain types of life insurance, such as burial or funeral insurance, may be more accessible and affordable options. These policies are designed to cover funeral costs and can be obtained without a health exam, making them a good choice for seniors. However, it's important to compare different policies and prices to find the right product. Additionally, reinstating a lapsed policy is an option for those who have let their coverage lapse due to non-payment. This process involves meeting specific requirements set by the insurance company, such as submitting a reinstatement application and providing health information.
| Characteristics | Values |
|---|---|
| Age limit for life insurance | Many insurers stop taking life insurance applications from shoppers over 75 or 80, while some have much lower age limits and a few have higher limits |
| Options for 70-year-olds | Final expense (also called burial or funeral insurance), universal and guaranteed universal life insurance |
| Factors determining insurance price | The type of policy bought |
| Average annual insurance rates for men over 70 | Term: $50,000 - $250,000 benefit, Whole: $50,000 - $250,000 benefit, Guaranteed Universal: $50,000 – $250,000 benefit, Final Expense: $5,000 benefit, Final Expense: $10,000 benefit |
| Average annual insurance rates for women over 70 | Term: $50,000 - $250,000 benefit, Whole: $50,000 - $250,000 benefit, Guaranteed Universal: $50,000 – $250,000 benefit, Final Expense: $5,000, Final Expense: $10,000 benefit |
| Grace period for late payments | 30 or 31 days |
| Reinstatement of a lapsed policy | Allowed within three to five years of lapsing |
| Reinstatement requirements | Submission of a reinstatement application, filling out a questionnaire about health, and attesting that health condition hasn't changed since policy approval |
| Reinstatement premium | Larger than the original premium |
What You'll Learn
Whole life insurance
When considering whole life insurance for a 70-year-old, it is important to compare different policies and prices to find an affordable option that provides the desired coverage. The cost of whole life insurance for a 70-year-old will depend on factors such as their health, gender, and the desired coverage amount. For example, a healthy 70-year-old man can expect to pay between $1,122 and $2,089 per month for a $250,000 death benefit, while a healthy woman in the same age group will pay between $934 and $1,801 per month for the same coverage.
It is worth noting that whole life insurance policies may require a health test, which can further increase the cost. Additionally, whole life insurance policies may not be the best option for those who do not have dependents or significant financial obligations, as the focus of these policies is to provide financial support to loved ones after the policyholder's death.
When considering life insurance for a 70-year-old, it is important to carefully assess one's financial situation, including income, expenses, debts, and assets. It is also crucial to consider the goals for the insurance policy, such as covering final expenses, providing for dependents, or leaving a financial gift. Seeking advice from a financial advisor or insurance specialist can help individuals make informed decisions about the type and amount of life insurance coverage that best suits their needs.
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Term life insurance
Affordability and Eligibility
Health Considerations
Coverage Period
Another consideration for those over 70 is the coverage period offered by term life insurance. Many providers only offer 10-year plans at this age, which may not align with the needs of older individuals.
No Cash Value
Unlike whole life insurance, term life insurance does not build any cash value. This means that if the policyholder outlives the policy, they will not receive a payout, which is an important factor to consider when deciding if term life insurance is worth the cost.
Reinstating a Lapsed Policy
If a term life insurance policy has lapsed due to non-payment of premiums, it may be possible to reinstate it. Insurers typically allow a grace period of 30 to 31 days, during which the policy remains active, and a revival period of three to five years, during which the policyholder can contact the insurer and fill out a revival form. Reinstating a lapsed policy is generally more affordable than seeking a new one, as the original terms and conditions will apply, and the premium amount may be lower. However, the policyholder's health may be reassessed, and the premium could change depending on the insurer's terms and conditions.
Alternatives to Term Life Insurance
Final expense insurance, also known as burial or funeral insurance, is a whole life insurance policy designed to cover funeral costs and other final expenses. It has much lower premiums than term life insurance and does not require a health test, making it a more accessible option for seniors.
In summary, while term life insurance is available to those over 70, it may not be the most suitable option due to the high costs, short coverage periods, and strict health requirements. Alternatives such as final expense insurance or guaranteed issue life insurance may be more affordable and better suited to the needs of older individuals.
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Universal life insurance
The cost of universal life insurance that requires a health test is lower than other universal life products, such as guaranteed universal life insurance. However, its rates are not as low as final expense plans, which don't require a health exam. Due to the complexities of universal life insurance, it is best to talk to a life insurance agent for a quote.
Guaranteed Universal Life Insurance (GUL)
These plans don't require a medical test or health questions, so their rates are higher than standard universal life insurance. Acceptance is guaranteed for all seniors, but be sure to pay all premiums in full and on time, as coverage may be cancelled if you miss a payment.
When to Choose Universal Life Insurance
- Are in good health
- Want permanent coverage with a guaranteed death benefit
- Are looking for low monthly premiums
- May need to update their policy in the future
- Want the option to receive refunds on premium payments
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Burial insurance
How Burial Insurance Works
Who Burial Insurance is For
If you’re a senior over 70, you might wonder if you even need burial insurance. Not every senior needs it, but most figure out that they need at least some coverage when they pass away. Buying burial insurance for over 70s is a great way to:
- Pay for your funeral or cremation
- Leave an estate legacy for your kids or grandkids
- Supplement your spouse’s retirement
Applying for Burial Insurance
When applying for burial insurance, you will need to answer some simple health questions on the application. However, you typically won't need to undergo a health test or medical exam. The application is easy to fill out, and your approval can come in as little as a few days.
Cost of Burial Insurance for Over 70s
The cost of burial insurance depends on several factors, including age, sex, health, and desired coverage amount. The average cost of burial insurance for seniors over 70 and under 75 ranges from $28 to $116 per month. Women are typically cheaper to insure than men, with average costs ranging from $28 to $85 per month, while the cost for men ranges from $38 to $116 per month.
Where to Get Burial Insurance
You can get burial insurance from a life insurance company or by working with an insurance agent, who will do the research for you and provide you with the best options. It’s important to get a customized quote from two or three providers to find the best match for your needs and budget.
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Guaranteed universal life insurance
GUL is a good option for those who want permanent coverage but want to keep premium costs within budget. It is also a solid choice if you want reasonable coverage that offers a permanent death benefit or a permanent policy for a dependent with special needs. Additionally, GUL may be a smart move if you want to help cover estate tax but don't need a cash value component.
GUL is less expensive than permanent coverage such as whole life insurance because it does not prioritise cash value growth. This makes it appealing to applicants looking for simple, lifelong, affordable life insurance. GUL is also a good option for seniors, as term life insurance is often unavailable to applicants in their 80s, and whole life policies can get very expensive.
However, it's important to note that GUL has minimal to no cash value, so it won't allow policyholders to grow their cash value over time. Additionally, GUL may be terminated if you make a late payment or miss a payment, and the insurer will keep the premiums you have already paid.
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Frequently asked questions
Yes, you can buy life insurance if you're in your 70s, but it may be more difficult and expensive. You will need to compare policies to find one that suits your needs and budget.
The best life insurance policies for adults in their 70s include final expense insurance (also known as burial or funeral insurance), universal life insurance, and guaranteed universal life insurance.
Life insurance is a personal decision and depends on your financial situation and goals. If you have no income to replace, little debt, and a self-sufficient family, you may not need it. However, if you want to cover final expenses, pay off debts, or leave an inheritance, life insurance can be beneficial.
It depends on the type of policy. Final expense insurance and guaranteed universal insurance usually only require answers to a few health questions, while whole, term, and universal policies typically require a medical exam.
The amount of insurance you need depends on your financial situation and goals. Consider factors such as your estate value, the number of dependents, debts, and the inheritance you want to leave.
