Choosing a life insurance policy is a lot of work, especially if you are a senior trying to get affordable rates without adding anything extra that you don’t need. However, everyone’s needs are different. But if you have started to look into Guaranteed Universal Life Insurance and lifetime protection you’re in the right place.
Guaranteed Universal Life Insurance is an awesome option for seniors over the age of 60 because if you buy the policy the death benefit will definitely pay out at some point. Because let’s face it…we will all pass away eventually.
You can buy a Guaranteed Universal Life that will that will remain in force no matter how long you live. And the nice thing is it can be much more affordable than whole life insurance. There is nothing wrong with whole life insurance. It serves a purpose. However, for low cost permanent life insurance protection for someone over 70 it’s hard to beat Guaranteed Universal Life.
Although Guaranteed Universal Life can cost much more than whole life, it’s important to note that this policy is still going to look a little different for someone who is 60 than someone who is 80. In other words the older you are, all things being equal, the more a life insurance policy is going to cost. Understand though that when you buy your policy your rate can be locked in for life.
Guaranteed Universal Life Insurance for Seniors Explained
Guaranteed Universal Life Insurance is commonly referred to as GUL and it looks and feels a lot like a term life policy except that it will definitely last your entire life – no matter how long you live. It’s not technically correct to say, but Guaranteed Universal Life is oftentimes called lifetime term or permanent term.
This is a popular option for seniors because again it is a lot more affordable than a whole life insurance policy. And unlike a term life policy which you could outlive a GUL will pay the benefit at some point when you do in fact pass away.
A big reason why a GUL is a lot more affordable than whole life is because there is little to no cash value in the policy. You are paying just what is needed in order to pay the premium and keep the policy in force. There is little or no (depending on the specific company and policy) cash value growth in the policy. If you are over 55 I’ve rarely found that it makes sense to buy a life insurance policy to help build cash value. I find this to be even more the case the older you are – certainly if you are over 70 I would recommend a GUL over whole life for lifetime permanent death benefit protection.
Factors That Determine Monthly Premium
There are a number of factors that will determine the cost you will have to pay for coverage. Some of those factors include:
- Tobacco Use
- Overall medical history
- Lifestyle habits
The older you are the more your life insurance rates are going be. Simply put, this is because the older we are statistically speaking the higher the probability that we will pass away – again all things being equal.
And remember again, once your policy is in force the cost is locked in for life. It will not increase in the future. This is assuming of course that you bought a policy that was structured to stay in force for life and you continued to pay the necessary premium.
Life insurance rates for woman is less than it is for men. Let’s say you have a man a woman. Both are 70 years old, non smokers, and in fantastic health. Let’s say both qualify for the best rates an insurance company offers. The woman will still pay less, because again statistically speaking woman live longer than men.
The fact is that men die younger when it comes to heart disease, stroke, cancer, diabetes, and other illnesses. Also men tend to participate in higher risk activities overall. Of course there’s other reasons as well, but for our purposes just know life insurance cost less for woman than for men.
One of the risk factors that is reviewed is your physical and mental health. It may be assessed by reviewing your application, a medical exam, your medical records, and/or it may include reviewing a phone interview. Both your health history as well as your immediate family’s health history may be considered. That said, many insurance companies do not factor in your family history if you are over 70. And some won’t consider family history if you are over 65 and some even after age 60. If family medical history history is an issue a factor it’s important to know which companies will look at your situation most favorably.
Your lifestyle actually plays a huge role in how much you’ll have to pay for coverage. For instance are you a health nut? Do you exercise a lot? You may pay less for coverage than someone who doesn’t. Do you drink alcohol and if so how much do you drink. Do you jump out of perfectly good airplanes – in other words do you parachute?
Other things in lifestyle that are looked at are your driving record. Any reckless driving activity, suspension of license, DUIs, etc., is considered to be a riskier lifestyle. This is because you have a greater likelihood of dying from a car accident than another person.
Now I’m sure there’s some seniors that may like to engage in motorcycle racing or some other type of extreme sport, but if that’s you maybe you want to think twice because this is another riskier lifestyle choice that will affect your premiums. Having said that, for some this type of lifestyle may be worth the extra bucks per month.
With most carriers there are several questions on an application related to your lifestyle habits. The key thing to know is that every insurance company assesses your “risk” differently based upon their unique underwriting guidelines and criteria.
If you use tobacco expect to pay quite a a bit more than for a non tobacco user would. This is especially true as you age. The difference between tobacco rates compared to non tobacco rates are quite significant for a a 70 year old. For younger folks – a 30 year for instance – would see a much smaller difference between the price for tobacco versus non tobacco rates.
Tobacco use in itself has its own two categories. While there are four basic categories for non-smoking, there are two tobacco use categories based on frequency and history.
GUL Insurance at 60-Years-Old
This is the best time for a senior to lock in rates. At 60-years-old you can buy policies that are relatively affordable based on being 60 and not 80.
Here are some examples of monthly premiums based on the different term lengths. To give us an idea of our starting point these are average premiums across all 60-year-old men and women.
Age 60 Male with a Preferred rate at $100,000 – $169
Age 60 Male with a Standard rate at $100,000 – $193
Age 60 Male with a Preferred rate at $250,000 – $372
Age 60 Male with a Standard rate at $250,000 – $457
Age 60 Male with a Preferred rate at $500,000 – $734
Age 60 Male with a Standard rate at $500,000 – $900
Let’s see how the female rates compare.
Age 60 Female with a Preferred rate at $100,000 – $148
Age 60 Female with a Standard rate at $100,000 – $165
Age 60 Female with a Preferred rate at $250,000 – $310
Age 60 Female with a Standard rate at $250,000 – $375
Age 60 Female with a Preferred rate at $500,000 – $610
Age 60 Female with a Standard rate at $500,000 – $734
GUL Insurance at 70-Years-Old
We can assume that all the rates at age 70 are going to be higher than the rates at our 60-year-old starting point unless a rate has been locked in for a set term. At 70, it can seem daunting to coverage. Knowing what the costs could look is probably helpful.
Here are some examples of monthly premiums for a 70-years-old at preferred rates.
Age 70 Male with a rate at $100,000 – $312
Age 70 Male with a rate at $250,000 – $683
Age 70 Male with a rate at $500,000 – $1354
Age 70 Female with a rate at $100,000 – $259
Age 70 Female with a rate at $250,000 – $583
Age 70 Female with a rate at $500,000 – $1,144
Of course, these numbers may jump a little more from company to company. However, these are the average rates for 70 years for GUL insurance. We can see that they are roughly a couple hundred dollars per month. This can add up certainly if you start a new policy from scratch.
GUL Insurance at 80-Years-Old
While it is definitely not too late to start life insurance at 80-years-old, you will notice that the rates are exponentially higher than the two previous categories. Having said that, GUL insurance is still an affordable way to guarantee the money gets paid.
Here are some examples of monthly premiums for a 80-years-old at preferred rates.
Age 80 Male with a rate at $100,000 – $647
Age 80 Male with a rate at $250,000 – $1,522
Age 80 Male with a rate at $500,000 – $2,987
Age 80 Female with a rate at $100,000 – $527
Age 80 Female with a rate at $250,000 – $1,179
Age 80 Female with a rate at $500,000 – $2,341
GUL Insurance Over 80-Years-Old
Some Guaranteed Universal Life insurance companies will not issue beyond 80-years-old. Despite that, there are plenty that still will. Some of which include Mutual of Omaha, Protective Life, Banner Life, and Lincoln National. In fact they will issue you a policy even at 85-years-old, with coverage that is guaranteed for life – even if you live to be 120 years old.
All four of the carriers mentioned above are highly rated. You couldn’t go wrong with any of them.
The best advice anyone can give someone looking into life insurance in general, let alone Guaranteed Universal Life Insurance, is to start as early as you can. Locking in rates for long periods of time is your best chance at saving a lot of money in the long run. Having said that your needs as a senior will change from 60 to 80 including the potential of needing to decrease the death benefit.
You may have a large mortgage unpaid at the time that your policy starts that may be greatly reduced or even eliminated later in life. As a result you may need/want to reduce coverage. Bottom line is that your situation is unique. The amount of coverage and how long is all based upon your specific circumstances and need for coverage.
Even if you aren’t able to start early, it may make sense anyways to get a GUL policy in your later years.
GUL for seniors is a great way to have an affordable guaranteed death benefit. It is the middle option between term life and whole life insurance policies.