Life Insurance Over 65, What You Should Get
Too often we talk to people that think that they can’t get life insurance once they get past the age of 65. Nothing could be further from the truth. Certainly it’s going to cost more than what it would cost if you were in your 30’s or 40’s for example. Nevertheless there are plenty of options available to you.
The two major types of life insurance are term life and permanent life. When you reach age 65 you can still buy either one.
So what kind of policy should you buy? The answer is simple and depends on the answer to one simple question…
Why are you wanting to buy life insurance?
The reason you want the life insurance should be the determining factor as to what type of life insurance policy you should get.
Let’s say you are 65 today and plan to work until you are 70 or 75. Would your spouse have a tough time financially if you weren’t around to continue working until your planned retirement date? If so, perhaps you should buy a short 10 year term policy, because maybe there is no need for you to have life insurance once your retire.
Maybe you have a mortgage that will be paid off in another 15 years. Perhaps a 15 year term policy would be the right choice if you want to make sure the house is paid off when you pass away. On the other hand, maybe a 10 year term policy would be enough since most of the mortgage will be paid off in 10 years. Another alternative would be to have two policies. Perhaps one for 10 years and one for 15 years. That way when the 10 year policy expires you will have another policy for another 5 years.
Let’s say you receive a pension that will stop when you pass away. You may want to buy life insurance to protect your spouse when the pension stops. In this case buying something longer term or even permanent would likely be the best choice. The reason being is you don’t want to outlive the term policy and die. Your spouse would be left with no pension and no life insurance. Unless your spouse has enough other assets or income sources in place they could be in a world of trouble financially.
Also, you may want to buy permanent life insurance if you would like to pass money along to your kids or grand kids. You wouldn’t want to buy a 20 year term policy for instance if you are buying the life insurance policy to create a legacy. Let’s say you are 65 now and live past age 85. All the money that you paid in to the 20 year term policy is now gone. Perhaps you could buy new life insurance at age 86, but very few companies offer it at that age. Also, if you develop health problems you may not have the means to afford a policy at that age that would make sense. It would have been a better move to get permanent policy that would be there no matter how long you live. Usually the best product for this is called a guaranteed universal life (GUL). A GUL is what I call a term look alike. It’s not a term policy, but as long as you pay your premium your policy will stay in force for the length of the policy.
Types of Life Insurance Policies Available after age 65
Term Life is very simple to understand. Most commonly term life insurance is available as either a 10, 15, 20, 25, or 30 year term. If you buy a 20 year term for instance your premium will stay the same for 20 years. However, you are not locked in to a contract you can’t get out. You may cancel the policy at anytime if you don’t need it or want it anymore for any reason. However, the insurance company is required to offer you the policy at the same rate for 20 years. The policy will not cancel unless you stop paying the premium.
However, as you get older your term life options become limited. For instance…
At age 65, the longest term life policy that you can buy with most companies is 20 year term. There are just a few companies that offer a 25 year term. You cannot buy a 30 year term at age 65.
At age 70 the longest term life policy that you can buy is a 20 year term. 25 and 30 year term is not available.
At age 75 you can get a 15 year term. However, you cannot get 20, 25 or 30 year term.
At age 80 only 10 year term is available.
If you are over the age of 80 there aren’t any term life policies available that we are aware of.
Permanent Life Insurance
When buying permanent life insurance there are really only two reasons to buy it. Either…
- You want to pay the least amount possible to have the death benefit in force for the rest of your life no matter how long you live. This is the most common reason and is the way most people go about buying permanent life insurance.
- You want to pay as much as you can into a policy specifically designed for cash accumulation. Money can grow tax free and can be withdrawn tax free or taken as a tax free loan as long as you do it correctly. These can be great policies if designed the right way for the right person, but in our opinion it rarely ever makes sense to buy this type of policy after the age 55 or 60. Simply put the math doesn’t work.
If you are over 65 and need permanent life insurance we would recommend a policy that would fit into the first category above.
This is where a guaranteed universal life policy (GUL) can make a lot of sense. A GUL is designed for low cost permanent life insurance coverage. Let’s say you are 70 years old and want coverage until you are age 90, 95 100, 105, 110 or 120 you can get that with GUL. If you bought a guaranteed universal life policy at age 70 that was guaranteed until you are 110 that would kind of be like buying a 40 year term policy. Again, technically it’s not a term policy, but it is quite similar. As long as you pay your premiums the policy will stay in force until you are 110.
Some have called this type of product a lifetime term or a term look alike. If you hear those terms it’s likely they are talking about guaranteed universal life.
Should You Buy Two Policies – Term Life and Permanent Life?
When shopping for life insurance many people don’t realize that they can buy two policies. Maybe you need a $250,000 10 year term policy for a short term need and a $100,000 20 year term policy. Or perhaps you need a permanent policy perhaps for another reason. This can be a good way to keep your overall costs down and for you to get just the amount of coverage that you need/want.
Below are sample rates for life insurance after age 65. As you will see the longer the policy covers you for the more it will cost. There is no best product for everyone. Again, it really comes down to why you need/want to buy life insurance.
Sample Monthly Rates For $250,000 of Life Insurance Over 65
Age 65 – Male Non Smoker In Great Health
10 year term – $103
15 year term – $137
20 year term – $202
GUL to age 110 – $485
Age 65 – Male Non Smoker In Average Health
10 year term – $187
15 year term – $260
20 year term – $371
GUL to age 110 – $591
Age 70 – Male Non Smoker In Great Health
10 year term – $179
15 year term – $251
20 year term – $409
GUL to age 110 – $636
Age 70 – Male Non Smoker in Average Health
10 year term – $314
15 year term – $472
20 year term – $654
GUL to age 110 – $799
Age 75 – Male Non Smoker in Great Health
10 year term – $347
15 year term – $620
GUL to age 110 – $888
Age 75 – Male Non Smoker in Average Health
10 year term – $611
15 year term – $887
GUL to age 110 – $1,103
Age 65 – Female Non Smoker In Great Health
10 year term – $66
15 year term – $89
20 year term – $134
GUL to age 110 – $411
Age 65 – Female Non Smoker In Average Health
10 year term – $125
15 year term – $168
20 year term – $ 240
GUL to age 110 – $486
Age 70 – Female Non Smoker In Great Health
10 year term – $109
15 year term – $155
20 year term – $317
GUL to age 110 – $597
Age 70 – Female Non Smoker in Average Health
10 year term – $193
15 year term – $291
20 year term – $497
GUL to age 110 – $676
Age 75 – Female Non Smoker in Great Health
10 year term – $216
15 year term – $390
GUL to age 110 – $848
Age 75 – Female Non Smoker in Average Health
10 year term – $375
15 year term – $611
GUL to age 110 – $957
Work With An Independent Agent
An experienced independent agent can help you determine the best plan for you. At Over50LifeInsure we specialize in helping people over 50 obtain the life insurance they need at the lowest possible cost. The first step is to figure out how much coverage you need. The second step is to figure out how long you need the coverage for. We can help you figure out what is best for you.
The next step is to determine the best company to submit your application to. We work with dozens of highly rated life insurance companies. Every insurance company will look at your application differently based upon your overall health and lifestyle habits. We are experts in helping to determine the company that will look at your application most favorably to help ensure the most affordable rates for you.
If you are over 50 and needing life insurance please don’t hesitate to give us a call. We look forward to a chance to help.