Whole Life Insurance: Over 60 And Covered?

Whole life insurance is a permanent policy that provides lifelong coverage and a cash value growth component. It is available for people over 60 and can give peace of mind to those who worry about leaving their family with bills to pay after they're gone. While whole life insurance is possible for over 60s, the amount of coverage available is typically lower than what can be purchased at a younger age. Whole life insurance is also more expensive than other types of insurance and is meant to be a lifelong product that builds cash value, which is why it is not recommended for seniors. Instead, term life insurance may be a better option for those over 60 as it can be used to cover short-term needs, such as income protection, or long-term needs, such as final expenses.

Whole life insurance for seniors: is it possible?

Whole life insurance for seniors is possible, and it can be a good idea for those who want to ensure their family is financially secure after they're gone. Even if you're at retirement age or older, you can still get whole life insurance, although the options available to you will be more limited than if you were younger.

Options for Seniors

While whole life insurance is available for people over 60, the policies on offer won't grant the same amount of coverage as the fully underwritten policies you can purchase when you're younger. Whole life insurance for seniors typically offers more limited coverage for a higher premium.

Policy amounts vary widely, but they typically offer coverage from $10,000 up to $50,000. Some companies have a minimum amount of coverage, and most will require a medical exam for higher amounts.

As you get older, term life insurance may become unaffordable or unavailable to you, making whole life insurance a better option. Whole life insurance can also help your family with several common end-of-life costs, such as funeral expenses, paying off debts or a mortgage, and medical bills.

How to Get Whole Life Insurance for Seniors

When looking for whole life insurance as a senior, it's important to compare different plans to find the most affordable option for you. You may also want to consider guaranteed issue life insurance, which offers more expensive coverage but without the possibility of rejection.

What are the benefits of whole life insurance for over 60s?

Whole life insurance is available for people over 60, and it can give you the peace of mind that comes with knowing that your family will not be left with bills after you pass. Here are some of the benefits of whole life insurance for over 60s:

Financial Security for Your Family

Whole life insurance can ensure that your family is financially secure after you're gone. It can help cover final expenses, such as funeral costs, which can range from $8,000 to $10,000 or more. A small whole life policy can ensure that your family doesn't have to worry about these costs during their time of mourning.

Pay Off Debts or a Mortgage

Whole life insurance can help pay off any outstanding debts or a mortgage, preventing family members from having to sell off assets, such as a family home. This can be a tremendous help to your loved ones during an already difficult time.

Prepare for Medical Bills

End-of-life medical expenses can be high, and a whole life insurance policy can help cover these costs. This can reduce the financial burden on your family and give you peace of mind knowing that your family can take care of any medical bills you leave behind.

Living Benefits

In addition to the death benefit, some whole life insurance policies for seniors also offer "living benefits." These benefits can provide additional financial support if you experience health issues as you age.

Tax-Efficient Way to Distribute Money

Life insurance can be a tax-efficient way to distribute money to your loved ones. The death benefit is generally tax-free, allowing your beneficiaries to receive the full amount without paying taxes on it.

Guaranteed Coverage

Whole life insurance provides guaranteed coverage for the rest of your life (or until the policy matures). This means you don't have to worry about outliving your coverage, as is the case with term life insurance.

While whole life insurance can be more expensive than term life insurance, it offers benefits specifically tailored to the needs of seniors. It can provide financial security and peace of mind for you and your loved ones during your golden years.

What are the alternatives to whole life insurance?

Whole life insurance is a form of permanent life insurance that remains in place as long as you make your payments. It is often expensive, but it offers fixed premiums and a fixed rate of cash value growth. Whole life insurance is a good option for those who want lifelong coverage, to build cash value that can be accessed while they are still alive, or to fund a life insurance trust.

If you are looking for alternatives to whole life insurance, there are a few options to consider:

• Term life insurance: This is the most inexpensive form of life insurance and is a good option if you are looking for coverage for a specific period of time or a specific debt to be covered. Term life insurance offers locked-in rates for a level term length. However, it does not build cash value, and renewal rates can be unaffordable.
• Universal life insurance: This type of insurance gives you the flexibility to adjust your premiums and life insurance death benefit. While it is more expensive than term life insurance, it is still a cheaper option than whole life insurance.
• Indexed universal life insurance: This is a type of universal life insurance that is tied to a stock index, such as the S&P 500. It offers more flexibility than guaranteed universal life insurance by allowing you to adjust premiums and death benefits within limits. However, it generally has high policy fees and charges, which reduce the amount of money going towards your cash value.
• Variable universal life insurance: This policy links your cash value to sub-accounts that contain stocks, bonds, and fixed-interest rate options. Similar to indexed universal life insurance, it allows you to adjust premiums and death benefits. However, you will need to take an active role in deciding on the investments.
• Burial insurance: Also called final expense and funeral insurance, burial insurance is a type of whole life insurance with a small death benefit meant to cover final expenses. It is guaranteed issue life insurance, so there is no medical exam required. Burial insurance policies are more expensive than other types of coverage but may be the only option for older individuals who are in poor health.
• Supplemental life insurance: This is typically offered by employers as a benefit to employees at low or no cost. These group policies are usually connected to your employment, so you lose coverage if you leave your job. Supplemental life insurance policies usually have death benefits, such as a multiple of your annual salary, but should not be your sole form of life insurance coverage.
• Self-funding: This alternative involves creating a savings account for your family to use after your passing. However, there are no rules about when the money can be used, so there is a temptation to dip into the funds.
• Annuities: Annuities are savings accounts offered by life insurance companies that can turn into a lifetime stream of income. If set up correctly, you receive an income stream, and if you pass away, the remaining balance goes to your family. However, unlike life insurance, this is a taxable event.

How much does whole life insurance for over 60s cost?

The cost of whole life insurance for those over 60 varies depending on several factors, including age, gender, health, and the type of policy.

According to Policygenius, the average cost of a $500,000 whole life insurance policy for a healthy 30-year-old is $440 per month as of October 2024. The cost increases with age, with older individuals paying more for the same coverage. For example, a $500,000 whole life insurance policy for a 60-year-old man in excellent health costs about $843 per month, while the price for a woman of the same age and health status is around $762 per month.

Whole life insurance is generally more expensive than term life insurance because it offers permanent coverage and includes a cash value component. The monthly cost of whole life insurance for seniors can range from as little as $15 to several thousand dollars, depending on the coverage amount and other factors.

Final expense or burial insurance is a type of permanent insurance specifically designed to cover funeral costs, which typically range from $8,000 to $10,000 or more. These policies have lower payouts, usually between $5,000 and $15,000, but also have much lower premiums, starting as low as $15 per month.

When considering the cost of whole life insurance for those over 60, it's important to keep in mind that the older the individual, the more limited their options may be, and the cost of coverage will likely be higher compared to purchasing a policy at a younger age.

How do I get whole life insurance for over 60s?

Yes, it is possible to get whole life insurance if you're over 60. Whole life insurance is sometimes called permanent life insurance because it doesn't expire; it stays in effect as long as you make your payments. However, even "permanent" life insurance policies can expire if you reach a certain age, usually between 95 and 121 years old.

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 every senior. 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 seniors. For example, some policies allow you to borrow money from them, but the loan has to be paid back while the owner is still alive. If it's not, the amount will be taken out of the payout after the owner passes away.

Although it's more expensive than other types of policies, there are affordable whole life insurance plans for those 60 and older.

How to Get Whole Life Insurance for Over 60s

To get whole life insurance for over 60s, you should:

• Compare different plans to find affordable life insurance for seniors.
• Consider final expense insurance, which is a type of permanent insurance that's usually used along with traditional whole and term life policies to pay for funeral costs. It's much cheaper than other insurance plans, but the payouts are smaller, usually between $5,000 and $15,000.
• Consider guaranteed universal life insurance (GUL), which doesn't require a medical test or health questions, and has guaranteed acceptance.
• If you're in good health, consider term life insurance, which is usually much cheaper than whole life insurance.
• If you're not in good health, consider guaranteed issue life insurance, which offers more expensive coverage but without the possibility of rejection.
• Combine life insurance with long-term care insurance by adding a long-term care rider to your policy or purchasing a hybrid life insurance and long-term care policy.
• If you already have a whole life insurance policy, you can likely continue with that coverage for the rest of your life.
• If you have a term policy, you may be able to renew it, continue it with a higher premium, or convert it to whole life insurance.

Frequently asked questions