A lot of people assume that the life insurance policy they acquired in their younger years will suit their needs later when they are older, i.e. over 70 years. On the flip side, the truth is that priorities, needs, and general life situations change all the time. So what your life looks like at 30/40 years might not be the same way it looks in your 70’s, or it might.
More importantly, relying on a policy you bought at a younger age might be a misguided decision. While you might not see the need to acquire a new life insurance policy at 70 or above, there are more than enough reasons you might need it.
Let’s look deeper into buying life insurance over 70.
Considering Life Insurance Over 70
In your 70’s, how do you decide whether you need a life insurance policy? The fact is that you may not need life insurance depending on your situation.
That said many people do need life insurance when their over 70. These are just some of the reasons why you might need to consider obtaining a policy.
- Dependents; One of the most common reasons for buying life insurance over 70 is if you have loved ones who depend on your income. There is a significant number of senior individuals with family members who financially depend on them so if this is your case, then you will need life insurance. Your income might come from employment, or perhaps from Social Security, or a pension. Perhaps it’s a combination of all of these.
- Debt; Leaving debt behind (after you die) might financially drain your spouse and/or kids. A life insurance policy will help to ensure that your loved ones can comfortably pay for any unpaid debt that they might not have been able to pay for.
- Funeral expenses; Without a plan, funeral expenses might drain the bank accounts of your loved ones. The average funeral cost in the U.S ranges anywhere between $8,000 to $10,000, and this might also increase if there are any additional end-of-life medical expenses. If your family members cannot afford it, the death benefit can be used to pay for the these costs. Even if they can pay for it, having a policy will reduce the financial burden and help to give them financial peace of mind.
- Leaving an inheritance; The policy benefit amount is also an excellent way of leaving money for your spouse and kids.
How to Shop For Quotes
One of the most common ways of shopping for life insurance quotes is through agents, but you can also shop online. Read on to understand how you can shop both online and through an agent.
Talking To An Agent
Contrary to common beliefs, obtaining life insurance at 70 years or above does not have to be difficult or extremely expensive. Even when you don’t know what to look for or where to look for it, there are agents who are professionals with enough experience in the field. A life insurance agent will provide any needed assistance and help you make the right choice.
They work as intermediaries between different insurers and you. If an agent represents one insurance company, they are referred to as captive agents but if they represent different companies, they are known as independent agents.
As such, it would be safe to work with an independent agent or agency that can shop multiple companies, as opposed to captive agents who only represent one company. A good independent agent can help you determine the best company for you to apply wit, and that will look at your application most favorably based upon your unique health history and overall lifestyle.
Shopping online allows you to take your time in determining the right coverage for you. It’s important to consider the amount of coverage you will need, how much you can afford to pay , how long you will need it for, and the type of policy you will need.
For instance, you might be looking for enough coverage to cover your final expenses. A $10,000-15,000 permanent policy would be enough if there are no other expenses your loved ones might have to pay for after you die eg: estate taxes.
The time frame you will need your policy for will be largely influenced by the reason why you need it. Once you have established the need, you can easily determine whether temporary or permanent coverage will be enough.
You will also need to evaluate coverage and rates by comparing quotes to determine what policy best suits your budget. You just don’t want to look at the quotes alone though, the policy you choose should have all the features you are looking for as well.
For example, perhaps you are looking for a policy with living benefits as well such that will allow you to access money while you are alive if you were to have a heart attack, stroke, or get diagnosed with cancer for instance. You want to make sure that your choice gives you that option.
Advantages of Shopping Online
Buying online is flexible as you are presented with a wide range of options for different policies to choose from. Even after running your quote on the type of insurance you want, an agent will guide you through the process via phone making it easier for you.
It is convenient since you don’t have to make any appointments, as all consultations can be done over the phone from the comfort of your home. In addition, you don’t have to worry about your policy’s fine print, your agent can read it to you and make any clarifications you might need.
An independent agent is not an employee of any specific insurance company, so working with one means that you will receive objective advice. They will offer you different policy options in order to provide you with the best solution based on your specific needs and preferences.
When it comes to pricing, benefits, and services, your agent will offer you the best value which is an assurance of getting the most appropriate policy. Also, they will be available to you from the first day of purchase and onwards, so you can always easily engage them in case any issue arises. You will have an experienced professional on standby to help out with the claims process in case of any complications.
An good independent agent is not just someone who helps you secure coverage. In addition a good independent agent should fully understand the dynamics of life insurance, how different companies work and what would best work for you.
Picking the Right Life Insurance Policy
One of the hardest hurdles to navigate when buying life insurance is determining whether to choose a permanent or term policy. How do you decide which policy is best for you? Here are a few tips you can use to easily pick the right life insurance policy.
Your need for a policy – The main reason why you want life insurance largely influences the type of policy you pick out. Reasons could include paying estate taxes, paying for your end-of-life expenses, paying off debt, leaving an inheritance for your loved ones, estate equalization, and income replacement. When you know exactly what you expect to get from your insurance policy then it will be easier to find the best option that provides just that.
The cost of coverage – Life insurance quotes over 70 can be expensive but it doesn’t mean you need to part with large amounts for your policy. When you have different policy options to choose from, you can easily choose one that is affordable to you.
The type of policy – Choosing the right type of life insurance might depend on your financial goals, health, and age. For example, it might not be a good idea to purchase a permanent policy if you need insurance specifically for an unpaid mortgage amount. The type of policy you buy depends on your need and financial situation.
The duration of need – How long will you need the life insurance for? The duration of the need/reason why you need life insurance will also determine the type of policy you choose. You might need permanent coverage if you are looking to purchase a policy in order to replace income for your loved ones when you die.
Final Expense Life insurance
A lot of seniors over 70 purchase life insurance to facilitate their final expenses which often include funeral costs, medical expenses, and debts. This kind of policy is different from most types of life insurance.
If your children are fully educated and financially independent or if your spouse does not rely on your finances, you have no debt or mortgage, and you have enough assets/property, then you might want to purchase a policy specifically for your final expenses.
Term Life Insurance
Life insurance rates increase as you age, but the biggest advantage of buying term life is that it is a relatively affordable option for seniors over 70. Term life policies give you the option to choose the term length you want, often up to 30 years. However, for individuals over 70, the most common term lengths are from 10-20 years, but this can change depending on your insurer and based on your actual age.
The longer the term is, the higher the premiums will be all things being equal. To qualify for a term life policy, you might be required to undergo a medical examination to determine the premiums you will pay. This can be a limitation if you have any history of health complications as you might not qualify for your policy.
Guaranteed Issue Life Insurance
Guaranteed issue policies are meant to guarantee coverage for those with less than stellar health. This is a great choice for a senior individual over 70 with medical complications looking for a substantial amount of permanent coverage. Most GI policies have graded death benefits for the first two years such that the full death benefit is not paid out if you die within that period. A percentage of the premiums paid is instead paid out to your beneficiaries.
This is only applicable if the policy was in force within those first two years. An exception where the full death benefit is paid out is if accidental death occurs.
Permanent Life Insurance
If you are looking for protection for big expenses, then a permanent life insurance policy might be the best choice. It provides lifelong coverage and is easy to qualify for individuals with relatively good health. It is designed to accumulate a cash value component over time which makes the policy more expensive than term life.
The cash value, also known as the savings component allows you to borrow money against the policy, and in other instances, you can use the cash component to cosign a loan through a collateral agreement.
Also, some permanent policies allow you to skip the medical exam, although this scores you less coverage than underwritten policies.
Your life insurance company will use a health classification system to determine policy rates. The healthier you are, the lower the premiums, and if you have specified medical or health problems then your rates will be higher.
The following are whole life monthly sample rates for a 70-year-old male and a 70-year old female non-smoker based on different health classes.
The following are 10-year term policy monthly sample rates for a 70-year-old male and a 70-year old female non-smoker based on different health classes.
Run Your Own Quote
If you are looking for a suitable life insurance policy over 70, you can run your own quote online and get an estimate of how much you will pay for your policy. Run a quote here on over50lifeinsure.com and get your rates today!