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No matter what your stage is in life, it is important to protect your finances, and the people you love. That’s why, regardless of your age, it’s essential that you have a good solid life insurance plan in place. That way, you won’t be leaving your loved ones with a financial hardship in case of the unexpected.
While some people feel that those who are “seniors” may no longer have a need for life insurance, the truth is that this is not the case at all. In fact, there are a number of reasons why those who are over 70 or even over 80 should consider purchasing – or keeping – life insurance coverage, because without it, you could be leaving those you love the most in a very difficult financial position in the future.
Regardless of your age, it’s important that you take a long look at your life insurance needs to determine if you need any insurance coverage for your family. Not having life insurance is one of the worst mistakes that you can make if something tragic were to happen to you. In this article we are going to look at the different options of life insurance and help you decide which type of coverage is going to work best for you.
Why Should People Over Age 70 Still Have Life Insurance Coverage?
Many years ago, it was not uncommon for those who were age 70 and older to have many of their “major” life expenses paid off. For example, these “seniors” would typically no longer have a large mortgage balance, nor would they have auto loans or personal loan debts to worry about.
Today, however, things have changed. Because people are living longer, finances have changed a great deal as well – and because of that, people are carrying debt for a longer period of time. This means that it is not uncommon at all to see someone who is in their 70s with many years left to pay on a mortgage balance. Likewise, someone in this age category may also purchase a new automobile by taking out a 60, or even a 72-month loan.
Unfortunately, today credit card balances are also at an all-time high. These high-interest rate debts have continued to rise – especially since the financial crisis of 2008 and 2009. Because so many people are taking out more and more debt, they run the risk of leaving loved ones in financial straits if they are to die prior to paying off these balances.
This can be especially difficult for seniors. For example, if a person who is 70 or older were to pass away and leave a great deal of debt to his or her spouse, it would create a tremendous amount of hardship for the survivor – especially if the surviving spouse was living on a fixed retirement income.
With that in mind, life insurance should be carried by any senior who has any type of debt balance and who doesn’t want to leave someone they care about with an additional financial burden when they’re gone.
While most people don’t think about this option, life insurance is an excellent way for you to give back to charity after you pass away. You can leave a large gift that you hadn’t be able to do previously, and it’s extremely simple to do. It’s important that you have your loved ones coverage with insurance before naming a charity the beneficiary.
Additional Reasons to Have Coverage
In addition to paying off debts, there are other reasons for those who are age 70 and over to carry life insurance protection. Another key reason is 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.
To pay these costs, many seniors purchase final expense life insurance. Final expense insurance – also referred to as funeral insurance or 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.
The payment of estate taxes is another potential reason that those who are 70 and over should consider having life insurance. Although not everyone will be subject to estate taxation, if you are, then it is important to know that these taxes could take in excess of 50% of the value of your estate from your survivors. This means that more than half of your hard earned assets could be going to Uncle Sam.
If your survivors do not have the funds readily available to pay these taxes, then it is possible that they may have to dip into savings or other assets to pay them. Alternatively, they may need to sell precious family heirlooms – often at prices far below market value – just to raise the needed funds. This is typically not the way that most families want to move forward following the death of a loved one. By having a life insurance policy to pay the estate taxes due, you can free up a great deal of money, and peace of mind.
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.
Still another reason for considering the purchase of life insurance if you are age 70 or over is for giving the gift of charitable contribution. Throughout one’s lifetime, they may give to a favorite charity. However, by naming a charity (or more than one charity) as the beneficiary of a life insurance policy, you can multiply your gift exponentially. On top of that, because charities are usually able to receive life insurance policy proceeds on a tax-free basis, they can use the entire value of the funds.
Additional Uses for your Coverage
There are other uses for life insurance if you are age 70 or over, too, in addition to just death benefit options. While the death benefit can be used by survivors upon your passing, those who own a permanent life insurance policy that has cash value built up will also have numerous options, too.
For example, the cash that is inside of these policies can be borrowed or withdrawn by the policy holder, and it can be used for any reason that he or she sees fit. This means that a policy holder could use it to pay off debts, pay for a child or grandchild’s college, or supplement their retirement income.
Because fewer life insurance companies are offering defined benefit pension plans today, fewer people can rely on a steady stream of lifetime income at retirement. Likewise, because people are living longer these days, savings must be stretched longer. The cash value that is available inside of a life insurance policy can be a great source of supplemental retirement income.
How Does Life Insurance Cost if you are Over 70?
The premium cost of a life insurance policy for a person who is age 70 or over will depend on a number of different factors. One of the biggest of these criteria will be the type of life insurance policy that you are purchasing. Today, there are two primary types of life insurance coverage that are available in the market place. These are term and permanent.
Term life insurance offers just pure death benefit protection, without any cash value or savings component. These types of policies are offered for a certain number of years such as 5, 10, 15, 20, or even 30 years – depending on the age and health of the applicant at the time he or she applies for the insurance. One of the best advantages to term life insurance plans are that you can purchase a plan that matches the length of your life insurance needs. Because these plans have an expiration date attached to them, they are going to be more affordable than a permanent form of coverage. If you want to save money on your life insurance plan, these term insurance policies are going to be the best option.
Generally, 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. This is true only if you are looking at a relatively short term like five or ten years. We typically only recommend longer terms on over 50 life insurance for people who are under the age of 65. If you are looking for longer term policies then a permanent policy will be a better option.
Permanent life insurance provides both death benefit protection, as well as a cash value component. These policies do not have a time frame, or “term” on them, so the coverage does not expire after a certain amount of time as it does with term insurance. These plans are an excellent option for anyone that doesn’t want to have to worry about losing coverage in the future. Because these plans are permanent coverage, they are going to be more expensive than term life insurance policy, but there are still several ways that you can get an affordable whole life insurance policy for your family. You can’t put a price tag on getting the perfect life insurance protection for your loved ones.
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. The cash inside of your plan can be used for several different things. You can use the cash value to borrow against in the future if you ever need a loan to pay for any emergencies. You can use the value to pay the premiums for the plan, or you can allow it to continue to build up and give your family additional value after you pass away. Regardless of what you use the cash inside of the plan for, it’s a unique advantage that isn’t offered with other kinds of life insurance plans.
Regardless of whether a life insurance policy for an applicant age 70 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 (weight as compared to height)
- Smoking status
- Overall health history
- Family health history
- Occupation and income
- Marital status
- Foreign travel frequency
- Amount of current life insurance in force
- Any dangerous or risky habits or hobbies
Applicants – especially those who are in the older age categories – 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.
If the applicant is considered to 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.
If an applicant does not qualify at all, they may consider applying for No Medical Exam life insurance or guaranteed issue life insurance policy. With these types of policies, as the name implies, there is no medical exam to contend with. Therefore, the applicant simply needs to answer just a few questions to qualify for life insurance coverage.
Because these plans typically cover applicants who are considered to be riskier in terms of age and health, the premium is usually higher than that of a traditionally underwritten policy. However, in some cases, it may be the only available option for obtaining life insurance coverage.
Where to Find Quotes
When shopping for life insurance for seniors, it is typically best to work with either a company or an agency that has access to more than just one life insurance carrier. In doing so, you will be able to compare directly – in an unbiased fashion – several life insurance policies, along with their benefits and premium quotes – and to determine which one will be the best for your specific needs.
If you’re age 70 or over, and you’re ready to start comparing life insurance policies and rates, we can help. We work with many of the best life insurance carriers in the marketplace today – and we can assist you in obtaining all of the essential information that you need to make a well-informed purchase decision. All you need to do to get the process started fill out the form on this page. Our quote form will take you to customized quotes without having to fill in any personal contact information. When you are ready to get a policy you can apply directly from the quotes and the insurer that you choose.
Should you find that you have any questions along the way regarding life insurance for people over 70 – or even about life insurance in general – please feel free to contact us directly. Our experts will be happy to assist in answering any of the questions or concerns that you may have. We can be reached by phone, toll-free, by calling 888-389-8676.
We understand that the purchase of life insurance can be a big decision – and it can seem to be somewhat overwhelming. There are a lot of details to work out – and you want to be sure that you have the right type, and the right amount, of coverage for your specific needs. So, contact us today – we are here to help.
Life insurance is one of the most important safety nets that you could ever buy for your loved ones. It will ensure that your loved ones have all the resources that they need to pay off any final expenses and get through the difficult situation. There are thousands of applicants over the age of 70 that assume that they no longer need life insurance protection for their family, which could be a devastating decision for their loved ones.
We know that finding a perfect life insurance policy can be a long and difficult process, but it doesn’t have to be, our agents can help make the process as quick and straightforward as possible. Our agents have years of experience working with dozens of highly rated companies across the nation and we can bring all of the best rates directly to you.
You never know what’s going to happen when something tragic could happen to you, which means that you shouldn’t wait any longer to get the life insurance protection that your family deserves. Even if you’ve been told that you no longer need life insurance, or you’ve been declined for coverage in the past, don’t assume that an insurance policy is a waste of money. Let us help you find the best life insurance policy for your family at an affordable rate. Contact one of our agents today and we can get the process started.