Life Insurance for Seniors Over 60 – 5 Policy Options
Even though life insurance for seniors over 60 will cost more than young adults in their 20s and 30s, seniors still have options for buying affordable life insurance.
Life insurance for seniors over 60 should be based on their needs more than their budget. With that being said, there are a handful of policy types to choose from so here we’ll discuss the available policy types and what coverage and solutions they will provide.
Term Life Insurance for Seniors over 60
Term life insurance is considered temporary coverage since it is purchased for a specific policy term like 5, 10, 15, 20, 25, and 30-years. Term is considered the least expensive of all the types of life insurance products because the coverage is temporary, builds no cash value, and insurers pay fewer claims than with term insurance than they do with permanent insurance products.
Although seniors can purchase inexpensive term insurance, their choice of policy term will likely be limited depending on their age at the time of application. To secure the lowest premium, a medical exam may be required, however, there are insurance companies that offer term insurance for seniors that do not require a medical exam.
Here’s an example of term insurance quotes for seniors over 60. These quotes are based on a $50,000 20-year policy for a healthy male and female non-smoker:
|Age of Applicant||Male Non-Smoker||Female Non-Smoker|
These quotes are from Sagicor Life and applicants are not required to have a medical exam.
Universal Life Insurance Seniors over 60
Universal Life (UL) or adjustable life insurance is considered permanent life insurance (not guaranteed) that builds cash value over time. The premiums remain level each year and the policy pays a guaranteed death benefit to your beneficiary when you die. One of the most popular benefits of a UL policy is the ability to take loans against the cash value for any reason without regard to your credit history.
Policy loans do not have to be repaid but the insurer will deduct outstanding loans from the death benefit when you die leaving less money for your beneficiary. The insurance company pays interest on your cash value that is dependent on the performance of the investments of the insurer but the company does set a minimum interest rate in the policy contract.
Universal life insurance is also flexible. The policyholder can reduce their premium payments or even skip paying for a time as long as there is enough cash in the policy to cover the cost of insurance. Additionally, the policyholder can decrease or increase the death benefit to accommodate life events.
Seniors who want coverage for a lifetime and want to earn cash value in their life insurance policy are usually willing to pay the higher premium that is charged for universal life insurance. It’s important to note that if interest rates fall below the rates anticipated by the insurer, the policyholder may have to increase premium payments or risk a lapse in coverage.
Guaranteed Universal Life Seniors over 60 (GUL)
Guaranteed Universal Life Insurance (GUL) is similar to Universal Life but the focus of the policy is on the death benefit rather than the cash value. Most insurance companies offer coverage that is guaranteed until the insured reaches a selected age like 90 or 95 or coverage for a lifetime.
Similar to term life insurance, the premium payments for GUL remain level for the life of the policy which makes GUL an ideal choice for seniors who want coverage for a lifetime is priced less than whole life insurance and will fit in a tighter budget.
Here is an example of a $50,000 GUL policy for a healthy male or female non-smoker who wants coverage for a lifetime:
|Age of Applicant||Male Non-Smoker||Female Non-Smoker|
Whole Life Insurance for Seniors over 60
One of the oldest types of life insurance in the marketplace, whole life insurance continues to remain popular because it provides guaranteed insurance coverage for your whole life and builds cash value.
Seniors who choose whole life insurance are less concerned about the premium as they are concerned about the guaranteed benefits in their whole life insurance coverage:
- The policy cannot be canceled by the company for any reason other than non-payment.
- After the policy is issued, the monthly premiums cannot be increased by the insurance company; even if you are diagnosed with a terminal disease or must live in a nursing home.
- Policyholders can borrow against their cash value for any reason without regard to their credit history. If a loan remains outstanding when you die, the insurance company will simply deduct the amount of your outstanding loan from the death benefit.
Sample Rates for a whole life insurance policy:
Typically, the most popular type of whole life insurance sold to seniors today is referred to as Final Expense Insurance.
Final Expense Life Insurance for Seniors over 60
Final expense insurance is especially popular with seniors because it can be purchased with a lower death benefit, a medical exam is not required, and final expense insurance contains those same popular benefits found in traditional whole life insurance.
Final expense insurance is a term used for life insurance coverage that is specifically for final expenses like funeral and burial expenses, unpaid medical bills, and nursing home expenses not covered by health insurance.
Most insurance companies offer final expense coverage from $3,000 to $50,000 with $20,000 being the most popular. Since final expense insurance was designed for the senior market, the underwriting guidelines are liberalized since most seniors have some type of medical issue they’re dealing with. In fact, most companies offer a guaranteed issue product (contains a waiting period) for seniors who have multiple health issues and cannot medically qualify for traditional final expense insurance.
These guaranteed issue final expense policies, though more expensive than the level benefit policies (no waiting period), do not take the applicant’s medical conditions into consideration and will, therefore, offer insurance coverage to anyone who falls within the company’s age requirements.
Sample Rates for Male age 65- $25K Death Benefit- Standard Non-Tobacco:
Sample Rates for Female age 65- $25K Death Benefit- Standard Non-Tobacco:
The Bottom Line for Life Insurance for Seniors over 60
Seniors over 60 can buy affordable life insurance. In fact, seniors even have policy choices that will enable them to purchase the type of insurance they need based on their circumstances. Seniors who are shopping for life insurance should contact an independent insurance agent rather than a company agent because independent agents have access to most of the top-rated insurance companies who offer multiple types of life insurance at affordable rates. If you have any questions or comments please don’t hesitate to give us a call or leave a comment.