Having life insurance is an essential component for any complete financial plan – regardless of your age. There are many people who believe that those who are considered to be “seniors” should do away with their life insurance coverage and put their premium dollars towards other pressing financial needs.
These individuals believe that when a person reaches the older ages and no longer has children who are counting on his or her income for their support, that there is also no need to continue keeping life insurance protection in force.
But the truth is that no matter what age you are in life, it is important to be prepared for any of the risks that could cause financial hardship to your loved ones – and one of the very best ways of protecting them is through the purchase of senior life insurance.
There are thousands of people that drop their life insurance coverage once their reach their 60s because they assume that they no longer need that protection. That could be one of the worst mistakes that you make for your loved ones.
When you’re looking at your life insurance needs and the different options, there are several different factors that you should consider to ensure that you’ve got the protection that your loved ones need. In this article, we are going to look at all the different aspects that you should consider.
Why Those Over Age 60 Should Still Have Life Insurance Protection
In the past, people who were over age 60 would typically have large expenses such as their mortgage paid off. They were also more likely to have their children grown and on their own, and they could often count on a regular retirement income from Social Security, investments, and a reliable company pension plan.
But today, things have drastically changed. Now, those who are age 60 may still be paying a monthly mortgage payment. They may also have a child – or grandchild – who is living with them. Those who are over age 60 today are also not likely to be able to rely fully on Social Security for their income in retirement. Nor can they rely on a company-paid pension, as many companies today are doing away with such benefits.
Because so many things have changed in today’s world, there are more reasons than ever to have life insurance protection – even if you’re age 60 or over. First, should the unexpected occur, loved ones would be required to come up with a large amount of cash for final expenses.
Today, the price of a funeral can easily exceed $10,000. Given the price of burial plots, caskets, transportation, flowers, the memorial service, and all of the other related costs, it is easy to see how the cost can add up.
For this reason, many people who are age 60 and over purchase final expense insurance. Final expense life insurance, also known as burial insurance, can provide cash to beneficiaries for paying off these costs quickly – without the need to dip info savings or other assets in their quest for finding payment. It will also alleviate them from having to sell off assets, as well as having to put such expenses on high-interest credit cards. This alone can save loved ones from long-term financial hardship going forward.
Even if you’re over age 60, you may also have unpaid debts. These may include an ongoing mortgage, as well as other balances such as a car loan or personal loans. Leaving loved ones with such debt could also put them in difficult straits – especially if your spouse or partner is living on a fixed income. A life insurance policy, however, would allow him or her to simply pay off the debt instead of being stuck with the payments.
Another big reason that those who are over age 60 should have life insurance is for the payment of estate taxes. While not everyone will be faced with this liability, for those who are, these expenses could force survivors into paying up to half the value of your estate – or more – to Uncle Sam.
Rather than giving up hard earned savings – or worse yet, selling off precious family heirlooms for the sole purpose of coming up with the money – it is much easier to simply purchase a life insurance policy for the purpose of paying the estate taxes that are due. In this case, however, it is important to keep in mind that you should keep the ownership of the life insurance policy out of your personal name. Otherwise, the value of the policy proceeds will be included in the value of your estate – and will also be included in the tax calculation.
Another reason for those who are age 60 or even 70 and over to own life insurance is for the purpose of charitable giving. Many people have one or more charitable organizations that are close to their heart. While giving during life is noble, naming a charity the beneficiary of your life insurance policy can often increase the value of your donation exponentially. And, typically, charities can receive the value of the policy on a tax-free basis – thereby allowing them use of the entire value of the policy proceeds.
Charitable giving is a very common reason that seniors purchase a burial insurance plan, but most people don’t consider using their plan to give back to the community. It’s an excellent way to leave a legacy to an organization that is close to your heart, but it’s important to ensure that your loved ones have the protection that they need before consider which charity to donate to.
Supplementing Income with Life Insurance
In addition to the many uses that the life insurance death benefit proceeds can provide, the cash value component of life insurance is also a great way to help individuals and couples financially, too – especially as they reach retirement age.
With permanent life insurance policies, the policyholder receives both death benefit protection, and cash value build up. Here, the cash that is inside of the policy is allowed to grow on a tax-deferred basis. This means that the gain in the cash value component is not subject to taxation until the time of withdrawal – which can essentially allow the funds to grow and compound exponentially over time.
The cash that is inside of these policies can be borrowed or withdrawn by the policyholder, and it can be used for any reason that he or she sees fit. This means that a policyholder could use it to pay off debts, pay for a child or grandchild’s college, or supplement their retirement income.
Today, given that fewer and fewer people are receiving defined benefit pension plans from their employers, and that Social Security is only replacing about 40 percent of the average wage earners income, it is good to know that there are options for those who are over age 60 to supplement their income when their employer’s paycheck stops.
Because people are living so much longer now than ever before, it is not unheard of to have a retirement that lasts for 20 or more years. This means that savings and other assets must be stretched as far as possible. The cash that is in a life insurance policy can be a good supplemental source of retirement savings.
How Much Will Life Insurance Cost for People Over the Age of 60?
The premium cost of a life insurance policy for a person who is age 60 or over or even life insurance for those 80 and over, will depend on many different factors. One of the biggest of these criteria will be the type of life insurance policy that is being purchased. Today, there are two primary types of life insurance coverage that is available in the market place. These are term and permanent.
Term Life Insurance
Term life insurance is considered to be the most basic, “plain vanilla” form of life insurance available for purchase today. This is because, with term life, you get pure death benefit protection only.
A term life insurance policy can be purchased for a certain number of years, or a set “term” of years – such as 5, 10, 15, 20, or even 30 – depending on the age and the health condition of the individual at the time of application.
Typically, provided that an individual is in relatively good health, term life insurance is the most affordable type of life insurance that you can purchase. Therefore, a term life insurance policy will usually be much more affordable than a comparable permanent life insurance policy.
However, once a term life insurance policy has expired, if the insured still wishes to be covered with life insurance, he or she will need to re-qualify for life insurance at his or her then-current age and health condition. And, because of their older age at that time, the new policy premium is likely to be quite a bit higher. We typically recommend that anyone looking for over 50 life insurance should be under the age of 65 if they are going to look at a longer term on their policy.
If you want to get the most affordable life insurance coverage, a term plan is going to be the best option. While age is going to be one of the biggest factors that the insurance company looks at, there are still plenty of choices for affordable insurance coverage for applicants over the age of 60.
Permanent Life Insurance
A permanent life insurance policy offers both death benefit protection, along with a cash value component. There is no expiration on a permanent life insurance policy, so once this type of insurance has been purchased, the policy will continue – provided that the premium is paid. These plans are an excellent option for anyone that doesn’t want to lose coverage in the future or doesn’t want to go through the hassle of having to reapply for a new life insurance plan. While it’s comforting to have whole life insurance, these plans are going to be more expensive than a term life insurance plan.
The cash that is inside of a permanent policy is allowed to grow on a tax-deferred basis, so there is no tax due on this cash until the time it is withdrawn. This means that over time, it could essentially grow and compound exponentially. You can use the value inside of your permanent life insurance plan to borrow against if you need a loan or to pay the premiums for the plan once there is enough value inside of your policy.
Regardless of whether a life insurance policy for an applicant age 60 or over is term or permanent, the premium cost of the coverage will depend upon a wide variety of factors. These will include the applicant’s:
- Height and weight
- Smoking status
- Health history
- Family health history
- Marital status
- Amount of current life insurance already in force
It will also be necessary for the underwriters to know if the applicant takes part in any “risky” or “dangerous” hobbies such as scuba diving or hang gliding, as these can make an insured more of a risk to a life insurance company. Likewise, frequently taking part in foreign travel can also be more of a risk for a life insurance company.
An applicant for life insurance coverage will typically be required to undergo a paramedical exam. This will entail submitting a blood and urine sample to be tested for certain types of adverse health conditions. Though if the applicants health is at a state where they will not pass a medical exam, there are other options out there to still obtain life insurance coverage, such as a no medical exam life insurance policy, or a guaranteed issue policy, which will both come with higher premium rates.
Should the applicant be of “average” health, then he or she will usually be rated as a Standard policyholder and they will be charged average premium rates. If, however, the applicant has certain health conditions that are not severe enough to decline the application altogether, then they will typically be rated as a Substandard policyholder and will subsequently be charged higher premium rates.
Those applicants who have exceptionally good health – along with excellent family health histories – will often be rated as a Preferred policyholder. These individuals are often charged a lower amount of premium than average.
How and Where to Find the Best Quotes on Life Insurance for People Over 60
When shopping for life insurance for people over 60, it is typically best to work with a company or an agency that has access to more than just one life insurance carrier, such as Gerber Life Insurance Company and Mutual of Omaha. That way, you will be able to directly compare several life insurance policies, benefits, and premium quotes to determine which will work the best for your specific situation.
In doing your comparison shopping for life insurance, we can help. We work with many of the best life insurers in the marketplace today, and we can assist you in obtaining all of the pertinent information that you need to make a well-informed purchase decision. If you are ready to move forward and get the process started, all you need to do is fill out the form on this page. Once you do, you can look through relevant policies without even having to fill out your personal information until you are ready to apply for a policy.
Should you find that you have any questions regarding how and where to find life insurance for people over 60 – or even if you have any questions about life insurance in general – please feel free to contact our team at Burial Insurance Plans directly. Our experts will be happy to assist you with any of the details that you need. We can be reached directly, toll-free, by calling 888-389-8676.
We understand that the purchase of life insurance can at times seem overwhelming. There are so many details to remember – and you want to be sure that you have all of the right amounts of coverage that you need. With that in mind, we can help you in determining the amount of coverage that will best fit your specific situation – as well as which is the right type of coverage for you. So, contact us today – we are here to help.
When you’re looking to get the perfect insurance policy to meet your needs, it can be a long and difficult process. There are dozens of different factors that you’ll need to consider to ensure that you’re getting the best plan to meet your needs. We know that it can be a confusing process, but our agents are here to help. We can walk you through the application process to ensure that everything is handled correctly.
Now that you’ve seen the advantages of both term and whole life plans, you still may be unsure of which plan is going to meet your needs, and our agents can help. We can look at your specific needs and connect you with the perfect insurance protection. Not only that, but we can also give you the most affordable rates from dozens of highly rated companies across the nation.
You never know what’s going to happen tomorrow, which means that you shouldn’t wait any longer to get the life insurance protection that your family deserves. If something tragic were to happen to you, your loved ones could be left with a massive amount of debt, which can make an already difficult situation a thousand times worse. A life insurance plan will give them the money that they need if something tragic were happen to you.