Life Insurance At 80: What's Next?

Term life insurance is a temporary product that offers coverage for a specific period, typically ranging from 10 to 30 years. When a term life insurance policy matures and the insured person is still alive, the policy ends, and they stop paying premiums. However, there are options to extend coverage or purchase a new policy, especially if the insured person still has dependents or significant debts.

Term life insurance at 80: what are the options?

Term life insurance is a type of insurance policy that covers a certain length of time, typically ranging from 10 to 30 years. Once the term ends, the policy also ends, and there is no longer a death benefit. However, if you are reaching the end of your term life insurance policy and still need coverage, there are several options to consider.

Purchasing Coverage After Outliving Your Term Life Insurance

If you still need life insurance coverage after your term life insurance policy ends, it is important to start evaluating other options before your current policy terminates. Here are some possible alternatives:

• Convert to a permanent policy: Many term life insurance policies include a term conversion rider, which allows you to convert your term policy into a permanent one without a medical exam. The timeframe for this conversion varies by policy, and premiums will increase due to increased age. However, insurability is guaranteed, and you can decide how much of the coverage to convert.
• Renew your term coverage: Most term life insurance policies offer the option to renew for a limited number of years without requiring evidence of insurability. This means you can extend your coverage even if your health has changed, but premiums will increase based on your current age.
• Purchase a new term policy: For those in good health, purchasing a new term policy may be the most inexpensive option. However, a medical exam is usually part of the underwriting process, and age is a factor, as older people pay more for term life insurance.
• Buy a permanent policy: Another option is to purchase a permanent life insurance policy, such as whole life insurance. While permanent policies are more expensive, they offer lifetime coverage and a cash value component.
• Final expense insurance: If you don't need a significant payout, final expense insurance, also known as burial or funeral insurance, may be a good choice. These policies have low coverage limits and comparatively expensive premiums but do not usually require a medical exam.

When deciding whether to continue or purchase new life insurance coverage, it is essential to assess your current financial situation and future needs. Consider the following factors:

• Dependents: If you have dependents who rely on your income, maintaining life insurance coverage can provide financial security for them.
• Outstanding debts: Life insurance can help ensure that any significant debts, such as a mortgage or car loans, are paid off without burdening your loved ones.
• Business obligations: Life insurance can facilitate business succession planning, cover key persons, or repay business loans in the event of your death.
• Special needs dependents: If you have a dependent with special needs who will require lifelong financial support, life insurance can ensure their needs are met even after you are gone.
• Financial independence of dependents: If your dependents are financially independent and you have no significant debts, you may not need continued coverage.
• Retirement savings: If you have adequate retirement savings and investments, you may not require additional life insurance coverage.

Term Life Insurance Options at Age 80

When it comes to term life insurance options at age 80, the choices become more limited and expensive. Here are some key points to consider:

• Term life insurance policies typically have an age limit ranging from 75 to around 86 years old.
• The longest term available is usually 10 years, and if you outlive the policy, there is no death benefit.
• Final expense insurance, also known as burial or funeral insurance, is one of the most affordable and suitable options for seniors over 80. It covers funeral costs and other final expenses without requiring a medical exam.
• Whole life insurance policies are another option for seniors over 80 but are even more expensive than term policies.
• Guaranteed universal life insurance (GUL) is available to seniors up to age 85 but is very costly and has a limited payout.

Can you get term life insurance at 80?

Term life insurance is temporary and only stays in effect for a certain period, such as 10, 20, or 30 years. If you die during that period, your beneficiary will receive a payout from the insurance company. If you die after the policy has expired, there will be no payout.

If you outlive your term life insurance policy, you have a few options. You can either extend your current policy, buy a new one, or convert your term life insurance into permanent life insurance.

Extending Your Current Policy

Many term policies have a guaranteed renewability provision that allows you to keep your insurance in effect after the end of the original term as long as you continue to pay the premiums. While your premiums are likely to rise each year based on your current age, you typically won't have to submit to a new physical exam. Some policies allow you to renew on this basis up to age 95.

Buying a New Policy

If you are in good health, you may be able to find an affordable new term life insurance policy. Some insurers write policies for people up to the age of 80 or even 90. You will typically need to have a medical exam, especially if the policy is for over a certain amount, such as $50,000. Some lower-value policies don't require a physical.

Converting to Permanent Life Insurance

Some term life insurance policies can be converted into permanent life insurance. Your term policy may include a provision for converting to a whole life or universal life policy, again without a physical exam. The new insurance policy could continue for the rest of your life or as long as you need it. The premium on the new policy will be higher than you have been paying for term insurance.

Term Life Insurance Age Limit

The age limit for term life insurance typically ranges from 75 to 86 years old. This means that if you are 80 years old, you may still be able to get term life insurance, but your options will be limited.

What is the best type of life insurance at 80?

When it comes to life insurance for 80-year-olds, there are fewer options available compared to younger adults, and the coverage offered is usually not as extensive. However, this is typically not a concern for most adults in this age range, as their financial responsibilities have reduced. Most 80-year-olds have paid off large debts, their children are no longer financially dependent on them, and they have sufficient savings and assets to cover any remaining debt.

The best type of life insurance for 80-year-olds depends on their specific needs and financial situation. Here are some options to consider:

Final Expense Insurance

Final expense insurance, also known as burial or funeral insurance, is a small whole life insurance policy specifically designed to cover funeral costs, burial or cremation expenses, and other final expenses such as medical bills. It is one of the most affordable options for seniors over 80, with low monthly rates and no expiration as long as premiums are paid. The application process is simple, and approval can be granted within a few days. Additionally, most final expense insurance plans do not require a medical exam; instead, applicants only need to answer a few health questions.

Whole Life Insurance

Whole life insurance provides coverage for an individual's entire life, as long as the premiums are paid. It also includes a tax-deferred cash value component that grows over time and can be used as collateral for loans or withdrawn. Burial insurance, a type of whole life insurance policy, is often recommended for seniors over 80 as it is more affordable than traditional whole life policies, which can be extremely expensive for this age group. However, traditional whole life policies may not be an option for those over 80, as many insurance providers set the cutoff for these plans at 80 years old.

Term Life Insurance

Term life insurance options are very limited and expensive for seniors over 80. Only a few companies offer term life insurance to this age group, and those that do require a health exam. The longest term available is typically 10 years, and if the policyholder outlives the policy, there is no death benefit payout.

Universal Life Insurance

Universal life insurance (UL) is a combination of term and whole life insurance. Some companies offer UL policies to adults up to age 89, but a medical exam is required, making it challenging to qualify, especially for those with health conditions. UL policies are expensive, and there are many factors that determine their cost, so it is essential to speak to an insurance representative to understand what you may qualify for.

Guaranteed Universal Life Insurance (GUL)

Most insurance providers offer GUL policies to seniors up to age 85. GUL policies are very expensive because coverage is guaranteed regardless of health status. The maximum death benefit is usually capped at $25,000, and there is typically a two-year waiting period during which loved ones will not receive the benefit unless the insured's death is accidental. GUL policies can be a good addition to a funeral insurance policy for those over 80 who want to leave a lump sum of cash to their beneficiaries.

When choosing a life insurance policy at 80, it is important to consider your specific needs and budget. Final expense insurance is often sufficient for covering end-of-life expenses, while term or whole life insurance may be more suitable for those with outstanding debts or a desire to leave a larger inheritance. Additionally, guaranteed issue and simplified issue life insurance policies are options that do not require a medical exam, although they offer smaller coverage amounts.

What is the average cost of life insurance at 80?

When it comes to life insurance for seniors over 80, there are fewer options available compared to when they were younger, and the coverage offered is usually smaller. At this stage in life, most people have paid off large debts like mortgages, and their children are no longer financially dependent on them. Additionally, they often have savings and assets that can cover any remaining debts.

The most suitable type of life insurance for people in this age group is final expense insurance, also known as burial or funeral insurance. This type of insurance is designed to cover funeral, burial, or cremation costs, as well as any remaining medical bills. It is one of the most affordable plans for seniors over 80, with low rates and fixed payments. The application process is also relatively simple, usually requiring only a few health questions rather than a full medical exam.

The cost of life insurance for adults over 80 depends on several factors, including age, gender, and health status. The older the applicant, the higher the premium tends to be due to a decrease in life expectancy. Men also tend to pay more for life insurance than women, as they generally have shorter life expectancies.

For a sense of the costs, a senior man in good health might pay around $1,430 to $1,800 per year for a final expense insurance policy with a death benefit of $5,000, or $1,060 to $1,235 per year for a $10,000 death benefit. For a term life insurance policy with a death benefit of $250,000 to $1,000,000, the annual cost for a man in this age group could be upwards of $1,430.

While term life insurance options are available for people over 80, they are very limited and expensive. The longest term available is typically 10 years, and the premiums are significantly higher than for final expense insurance. For example, the average annual rate for a 10-year term life insurance policy for an 80-year-old man is over $1,430.

In summary, while the cost of life insurance for seniors over 80 can vary, final expense insurance is generally the most affordable and suitable option for this age group, providing coverage for funeral and other final expenses at a lower cost compared to term or whole life policies.

What are the pros and cons of life insurance at 80?

When you turn 80, there are fewer life insurance options available to you, and you won't be able to buy a large policy. However, this is usually fine, as by this stage in life, you won't need as much coverage as you used to. Most adults in their 80s will have paid off large debts like mortgages, and their children will no longer be financially dependent on them.

Pros of Life Insurance at 80

The best type of life insurance for over-80s is usually a whole life policy, specifically final expense insurance, to pay for funeral, burial, and other end-of-life costs. Final expense insurance is one of the most affordable plans for over-80s, and it has many other benefits:

• As long as you pay your premiums, your plan doesn't expire.
• Your payments are fixed as long as you continue to pay them.
• You may be able to take out a loan against the policy's cash value.
• You usually only have to answer a few health questions on the application rather than take a medical exam.
• The application process is quick and easy, and you may be approved within just a few days.

Cons of Life Insurance at 80

• The premiums for whole or term policies worth tens or hundreds of thousands of dollars are very high for people in their 80s. In many cases, they’re not even available to adults in this age group.
• Term life insurance options are very limited and very expensive for seniors over 80. There are only a few companies that offer them, and those that do require a health exam. The longest term you can buy is usually 10 years, and if you outlive the policy, you won’t receive the death benefit.
• Whole life insurance is even more expensive than term life insurance, because it’s permanent as long as the premiums are paid. Plus, 80 is often the cutoff age to buy these plans, so you won’t be eligible if you’re older.
• Universal life insurance is difficult to qualify for and the premiums are high, especially if you have a health condition such as diabetes.
• Guaranteed universal life insurance is very expensive, because it’s guaranteed no matter your health status. The most you can buy at this age is usually $25,000, and there’s usually a two-year waiting period when your loved ones don’t receive the benefit unless your passing is accidental.

Frequently asked questions