5 life insurance options for seniors

life insurance age limit

Life insurance can be the ideal way to protect both yourself and those you care about. However, individual insurance companies may place age-related restrictions on life insurance policies. If you are an older American, you may have coverage restrictions or reductions. Age can also affect how much you can pay for a life insurance policy. To see how life insurance options play into your larger estate planning, consider working with a financial advisor.

How Age Affects Life Insurance Policies

Age can have a big impact on life insurance policies and can cause some Americans to have trouble getting coverage. But what applies to one insurance company may not apply to another. The type of policy also matters. The same insurance company may offer one type of policy to the age of 64 and another type of policy to the age of 55, for example.

Each insurance company sets its own age limits and restrictions. However, whole life policies usually have higher age limits than term life policies. Physical health also plays a role. If you are old but in perfect health, this may not be a problem. But if you have one or more pre-existing health conditions, you may be asked for a physical exam.

Finally, age can affect how much you pay for your life insurance policy. As you get older, you run a higher risk of dying, which in turn is a risk of paying out a term life insurance policy or you may pay less years into a whole life policy. Insurance companies usually offer the lowest rates on policies that they believe will pay premiums for the longest amount of time.

Life Insurance Options for Seniors

life insurance age limit

life insurance age limit

As mentioned above, your age can influence what your life insurance options are, but this varies by company and policy type. Here, we’ll look at some options you may have, as well as how old you should be if you’re considering each. The top five life insurance options for seniors are:

1. Temporary life

If you are still relatively young, term life insurance may be a good option because premiums are usually low relative to the amount of coverage. These policies usually have a term of 10, 20 or 30 years. However, you may have fewer options as you get older, and fees may also increase, making this an option, but not necessarily a great one.

For example, you may not be able to buy a 30-year term life policy if you are over 55. However, some insurance companies offer term life policies with shorter terms for those who are 85 years old. Check with your insurer to see what your options are.

2. Whole life

Whole life insurance is sometimes a better option for older Americans because it lasts until the end of your life. Whole life insurance usually has higher premiums than term life insurance, but includes a permanent death benefit for its beneficiaries. They also have a cash value that you can borrow against in the form of a loan while you are still alive.

Whole life policies are also less likely to require a medical exam than term life policies, so this may be a better option if you have pre-existing health conditions. Some insurance companies offer whole life policies for people up to the age of 80. However, the fewer years the company expects you to pay premiums, the more expensive the policy is likely to be.

3. Universal life

Universal life insurance is like whole life insurance in some ways in that it includes lifetime protection and has a cash value. Again, premiums will tend to be high, but you can usually be covered up to age 100 for many policies. The main difference between universal whole life is the premiums and the death benefit. With whole life, both are fixed, but with universal life, both are flexible. Both death benefits and premiums can be reduced to lower your monthly bills or increased if you want more cover.

4. Guaranteed Universal Life

Guaranteed universal life insurance is a hybrid of whole and universal life insurance. The premium is guaranteed, but you have flexibility with your death benefit. It also tends to be cheaper than whole life insurance because there is minimal cash value build-up. This tends to be one of the best options for those later in life who don’t expect a large cash value from their life insurance. Some policies offer coverage up to age 121 and can offer hundreds of thousands in coverage.

5. Final expenses insurance

Final expense insurance is a permanent life insurance policy that is usually available for adults up to age 85. Typically, these policies only cover your end-of-life expenses, such as funeral costs and medical bills. These policies do not provide as much coverage as whole or universal life, but premiums can be much lower.

What should seniors look for in a life insurance policy?

Choosing a life insurance policy that works for you is a fine balance. You don’t want to pay too much, but you also want to make sure you have enough coverage. If you have multiple dependents and multiple pre-existing health conditions, you likely need a high level of coverage. But if your children are grown and no longer dependent on you, and you don’t have major health problems, you probably don’t need as much coverage.

A financial advisor can help you sort through these considerations before making a final decision. Ultimately, you’ll want to consider how long you expect to live, how much coverage you need, and how much you can afford before making your final decision.

bottom line

life insurance age limit

life insurance age limit

Buying life insurance isn’t always as easy for seniors as it is for younger people, but that doesn’t mean you don’t have options. If you’re under 80, you may still be able to find a 10-year term life policy. If not, options like whole life and guaranteed universal life might be better options. While your options may be somewhat limited if you’re older, it’s still possible to find a life insurance policy that fits your needs.

Tips for life insurance

  • A financial advisor can guide you through important financial decisions, such as purchasing life insurance. The free SmartAsset tool matches you with up to three financial advisors serving your area, and you can interview your advisors at no charge to decide which one is right for you. If you are ready to find an advisor who can help you achieve your financial goalsstart now

  • Deciding how much life insurance to buy isn’t easy, especially with so many things to consider. SmartAsset’s life insurance calculator can help you estimate how much life insurance you need in your unique situation.

©iStock.com/kazuma seki, ©iStock.com/Panupong Piewkieng, ©iStock.com/PeopleImages

The post Age Limits and Impact on Life Insurance appeared first on SmartAsset Blog.

Leave a Comment

Your email address will not be published.