Ever wondered what the age limit for life insurance is? Let’s find that out today and see who’s eligible or not!
Life insurance is an agreement where the insured (you) agree to pay premiums to your insurer for a set period in exchange for compensating your beneficiary in case you get into an accident, get ill, or die. Understanding the purpose of life insurance helps in planning your family’s long-term financial goals.
What’s the age limit for life insurance? This article will discuss the age limit for life insurance for different types of life insurance policies. And help you understand how age can affect your life insurance coverage and everything in between. So let’s dive right in!
Is there an age limit for life insurance coverage?
Insurers set age limits when insuring people. Some only cover up to 70 years old while others cover up to 90. Your age limit for life insurance determines.
If you’re planning to get insured at 85 or older, you may have to pay for costlier premiums due to the higher risk of illness. Insurance plans for the elderly usually cover funeral expenses and other end-of-life costs.
There are insurance companies that insure people up to 100 years of age – for a price not everyone can afford. But the policy, however, will give you peace of mind knowing you’ll be well taken care of up till the end.
What is Life Insurance For Seniors?
Life insurance for seniors (aka final expense life insurance or burial insurance) is easy to qualify for because they have minimal health-related questions and do not mandate a medical examination.
The amount of payout (death benefit) will be based on the chosen coverage stated in the policy. Some policies for seniors can be availed at elderly-friendly prices. They work just like any other insurance policy for the young. They determine the eligibility for life insurance based on age and current mental and physical well-being.
READ MORE: Ultimate Senior Life Insurance Guide
Types of life insurance policy for seniors
Life insurance policies for seniors are designed to provide financial assistance and protection for older adults (50 years and older) and their families. These policies cover the insured for a specific period, or for the rest of his life depending on what plan he has availed.
They help pay for the expenses that are usually associated with the needs of the elderly, and provide a source of income. Below are the most common types of insurance policies for seniors.
1. Term life insurance (TLI)
Is a policy that lasts for a certain period – usually from 10 to 30 years. Within which, you agree to pay a monthly premium in exchange for a deal that the insurer shall pay you a death benefit (the amount specified in the contract) if you die during the said term.
2. Whole life insurance
Provides coverage for your entire life. Premiums for this type of policy are more expensive than a term plan. A WLI fund earns a fixed interest rate like an ordinary savings account, with a guaranteed death benefit.
•Guaranteed WLI with no waiting period gives the insured access to the full benefits of the policy as soon as the first payment is made. However, this policy may be more costly compared to those with a waiting period.
•Simplified issue WLI offers limited coverage for those who aren’t eligible for traditional insurance. Premiums are more affordable but you may have to answer health-related questions to qualify for this. Plus, there are age limits that may prevent you from obtaining this policy.
3. Universal life insurance (ULI)
Offers lifetime coverage. Your policy remains active as long as you keep your premiums and all other requisites updated. It’s more flexible compared to other policies because ULI has an adjustable payment scheme for monthly life insurance premiums and death benefits. You can even borrow from your funds.
4. Variable life insurance
Is somewhat similar to ULI due to its flexibility, permanent coverage, and death benefits to your chosen beneficiaries. This policy has a cash-value component where you have the option to invest your money, usually in stocks or mutual security funds.
5. Final expense insurance (FEI)
Other policies focus on income replacement and generation. FEI on the other hand, has a lesser face value. It’s designed to specifically address the costs associated with the end of life.
Guaranteed life insurance for seniors
Guaranteed life insurance is a more popular option for individuals who have pre-existing health conditions or those who prefer not to undergo a medical exam. It is also a viable choice for policyholders who’ve outlived their term life and require additional coverage in the future. Some insurance providers offer more leniency when it comes to the health status of applicants.
What happens if I die after my term life policy ends?
In case you die during the… let’s say 20 year period, your beneficiary will receive a payout from the life insurance company. However, no payout will be paid if you pass away after the policy has ended.
Make sure the “return of premium” rider is included in your policy, so you get your money back in case you outlive the policy. And, that you have the option to cancel or sell it before it expires. Or to convert your term life into WLI for lifetime coverage.
Term Life Insurance policy for Seniors: benefits and drawbacks
Affordability makes term life a great choice for seniors. So if you’re still shopping around from one insurance company to another, go for affordable life insurance for old age.
The Benefits
•Term life insurance (TLI) is the most affordable option, especially if you start young. It provides coverage for up to 30 years as long as you pay the premiums stipulated in the contract.
•Its primary purpose is to provide financial protection (a tax-free death benefit) to your family in the event of your untimely demise.
•You also have the option to extend the coverage to critical illnesses or accidental death. Or upgrade your TLI into permanent life insurance.
The Drawbacks:
•Term life doesn’t include a savings account component in its policy that you can borrow from, withdraw, or invest in bonds or other investment options.
•The premiums rise as you age, which makes it difficult to keep up with payments in the long run.
•It lacks the assurance that a permanent life policy promises. 30 years maximum coverage is still, just temporary.
•A canceled term policy doesn’t include a money-back guarantee, which means you don’t get to reimburse the premiums you’ve paid in the past.
•If you opt for requalification at the end of, let’s say 30 years, a new policy would certainly have a higher price tag. And the odds of you getting denied are also higher this time – with all the health issues and age limitations as deterring factors.
Read More: Types of Insurance for Seniors
How can I get life insurance at 50 years and up?
You will have to undergo a medical screening when applying for a lifetime coverage when you’re over 50. Although most companies now are proposing policies that do not necessitate a medical exam. For individuals in their fifties, term life is usually the best option.
Life Insurance for Seniors: benefits and drawbacks
A solid life insurance plan for seniors is meant to help secure their estate and spare their financial dependents from financial hardship after they pass away. You can opt for either term life insurance or a permanent life policy, depending on your needs and preferences. While the cost of these policies may be higher compared to younger individuals, leaving your family debt-free when you pass is a valuable legacy.
The Pros:
•Provides financial stability. Purchasing life insurance isn’t an obligation. But the security it provides by paying you out can help cover debts, funeral expenses, any income loss, and other final expenses.
•A source of income in your retirement years. Life insurance is a vital component of a person’s financial strategy. The cash value aspect of a WLI is guaranteed not to diminish. It can serve as a reliable source of income in your retirement years.
•Return on investment. The dividends you will be receiving from your coverage can be reinvested for an extra source of cash. Plus the financial relief to your loved ones in case of your untimely demise.
•Tax-free. Payouts received by your designated beneficiaries after you die aren’t considered part of your gross income and as such, your beneficiaries aren’t required to report them.
The Cons:
•For someone with numerous financial obligations, the need to pay for either monthly or yearly premiums can be a drain on the pocket.
•Life insurance age requirements for the elderly can be stern especially if you have numerous health issues.
•Premiums for senior life insurance policies can be costly due to the higher risk of illnesses, and age limitations.
•In case you surrender your WLI policy, you are, in effect, forfeiting your access and claim to your benefits. And denying your beneficiaries the privilege to receive any payout from your passing. You as the policyholder shall instead receive the accumulated cash value you have saved over time. Minus the surrender fees most insurance companies usually require in situations like this.
Types of final expense life insurance for seniors
Final expense policies enable you and your loved ones to plan for the future. An active final expense insurance policy provides guaranteed death payouts that cover unforeseen end of life expenses. Such as your medical bills, nursing home fees, and funeral costs.
•Some guaranteed final expense insurance has a waiting period. Policyholders may have to wait for 1 to 3 years before benefits can be paid out. If the insured passes away before the waiting period ends, the designated beneficiaries don’t get to receive the death benefit. They’ll, however, receive a refund of the payments made with at least 10% interest.
•Final expense whole life insurance policy (aka funeral insurance) is ideal for seniors who require only a small amount of coverage. And for those who have been declined coverage for term insurance, or have numerous health concerns.
•Guaranteed issue life insurance (GILI) is a final expense insurance that requires no medical exams. It may require you to answer a few health questions. But your health status won’t affect your eligibility for GILI. And because health risk isn’t considered when applying for this, premiums for this type of policy are usually high. This type of policy guarantees the prices of your preferred funeral services in advance. Once the policy is fully paid, expect no additional charges regardless of the existing inflation rate.
Whole life insurance policies vs. Term life insurance for seniors
Whole life or term life insurance? Your decision should be based on individual life insurance study, how much coverage you want, and your financial capacity to pay the premiums.
Term life insurance policies generally cost fairly cheap but offer temporary coverage. In contrast, whole life insurance policy entails more expensive premium payments but offers permanent coverage. These are the two main distinctions between the two policies. The bottom line, choose what works best for you.
Guaranteed universal life insurance vs. Indexed universal life
A guaranteed universal life policy includes guaranteed final expense coverage and a fixed premium for the duration of the policy. Guaranteed universal life insurance (GULI) plans are less flexible but are considered low-risk and moderately priced compared to other universal policies.
Indexed universal life policies (IUL) and variable universal life, on the other hand, allow you to earn more cash value than guaranteed universal life insurance. IUL is a permanent life insurance policy that accrues cash value over the course of your life. Its slow growth rate and expensive management fees, however, make IUL an unwise investment.
Factors that affect the decision of seniors to obtain life insurance
Let’s discuss the different factors that impact the ability of senior citizens to secure life insurance that suits their needs.
•Age. Expect to pay more as you age. Many insurance companies have age restrictions for life insurance. They charge higher rates for older individuals because the likelihood of them passing away during the policy period is higher.
•Driving record and financial stability. Most companies send a financial advisor to look into your financial situation and public records to verify details about you such as personal information, criminal records, and property ownership. Individuals with suspended licenses, reckless driving citations or convictions, and a history of DUIs are considered high-risk.
•Occupation and lifestyle. A licensed insurance agent will also ask several health questions and will take a look at your profession and lifestyle during the assessment. You might be classified as a high-risk individual if you’re frequently exposed to occupational hazards or if you have a habit of smoking or drinking.
•Gender. Women have a higher life expectancy. This makes their premiums lower than those for men.
•Health status and family history. Do you have pre-existing conditions like asthma or high blood pressure? Or are you predisposed to cancer or diabetes? These health questions can even make you ineligible for certain types of insurance due to the additional risk your health status poses for insurers.
•Amount of death benefit. Buying life insurance with a $1 million death benefit, the same amount will likely be paid out tax-free to your chosen beneficiary upon your demise. Isn’t that a nice way to entice people into buying a life insurance policy?
Tips on getting life insurance as a senior citizen
Find the best life insurance company with high customer satisfaction ratings that offers as much coverage for a reasonable price. Here are tips to help you navigate the process and zero in on finding the one.
•Shop around. Buy life insurance from a trusted firm that will give you equitable life insurance quotes, offers best life insurance products, and low priced premiums. And yet provides financial security against medical and final expenses. Some permanent life policies offer accelerated benefits for terminally ill individuals.
•It’s understandable why most people would opt for a term life insurance policy because it’s affordable. But make sure to choose one that has a money-back guarantee in case you outlived it, and the option to upgrade the policy into permanent life coverage.
•Buying a term life insurance policy for individuals over 80 can be difficult. Since the maximum age for life insurance is 89, those who want coverage at this age should instead consider getting whole life policies.
•Get through the underwriting process. This helps determine the level of risk associated with insuring an individual and to determine what appropriate premium to charge based on that risk assessment. An insurance company would usually send a representative to do the assessment.
•Buy life insurance from a reputable insurance company* with a high trust rating. A digital insurance company that offers affordable insurance for elderly but doesn’t require a medical exam.
Note*: We get to earn commission for every purchase made through affiliate link/s, but at no extra cost to you.
•Work with a fee-only life insurance consultant or advisor who’ll help you plan for your future by providing financial advice on risk management, investing, and retirement planning.
Steps in getting life insurance as a senior citizen
For seniors who plan on getting whole life coverage, please know this. It’s not yet too late. There’ll be some extra steps you may have to take, but you can still get covered – if that’s what would bring comfort to you and your family.
•Decide on a life insurance policy based on necessity, and the amount of coverage you require. Remember the deterring factors and the types of policies you can choose from – with their unique features and benefits.
•Shop around for different insurance companies. It pays off to explore whatever options are available. You’ll be surprised to find life insurance companies that offer better deals to seniors. And you can save substantial amount from discounts given to those who purchase multiple policies from the same company, which is called bundling.
•Get through the application process. This allows you to present your credentials, vital information, and history. The compliance of which will be the insurance company’s basis for a fair assessment of your eligibility.
•Undergo a medical exam. Most life insurance companies require medical exams to assess the risk and estimate the projected life expectancy of applicants. This process, known as underwriting, enables insurers to determine appropriate policy premiums. Well, they, too, have financial interests to protect.
•Wait for approval. How long it takes for life insurance companies to approve your application varies, depending on the type of policy you choose.
No medical exam life insurance for seniors
Yes, there’s life insurance for seniors that requires no medical exam. However, the benefits are limited and the premiums are pricier compared to fully underwritten coverage.
Whole life insurance without a medical exam is limited to small policies that have a maximum coverage amount of $50,000.
FAQs:
- Is it possible for a 90-year-old to purchase a term insurance? The maximum age limit for life insurance coverage isn’t etched in stone. Purchase life insurance that’ll cover you even when you’re over 85 years old. If you find one though, premiums will definitely come with a price.
- Is it possible for a 70-year-old to get term insurance? Yes, you can still get insured even when you’re 70. Insurance companies have a set of eligibility requirements that you’d need to comply with to qualify.
- Does term insurance expire when you reach the age of 70? It depends on what type of insurance you have availed. At age 70, a term life would be nearing termination, if it hasn’t yet. So it’s advised that you convert it into whole life insurance (hope your policy has that option) before it expires.
- Can you get life coverage if you’re over 80? The answer is yes, you still can. But please remember that your choices will be limited. FEI will be your best option. This policy can be availed at lower rates and it’ll cover funeral costs and other end-of-life expenditures.
Conclusion:
Insurance providers have a varying age limit for life insurance coverage. Some have stricter requirements, while others are open-minded about granting coverage to older individuals.
Your priority for finding the best life insurance company should be based on what you need at this time.
There are insurance companies that are fully digitalized. You can make an online inquiry about how much life insurance costs while taking your afternoon tea at home. Compare rates and study the different policies.
Remember, getting life insurance is a way to plan and invest in your future, settle your financial obligations, and secure the well-being of your loved ones. So if you’re still dilly-dallying and asking what’s the age limit for life insurance, stop right there. Because you know that even at 70, 80, or 90, you can still get insured.
You’d never want to leave your family behind, scrambling for funds to pay off whatever financial obligations you may have left, when you could have provided before the inevitable came. It’s never too late to shop for the best life insurance.
Buy now and get the deal.
