Does Life Insurance Still Make Sense After 60?
The purchase of life insurance can have a wide variety of reasons behind it. For some, these proceeds are put in place so that a spouse and children can continue to pay their living expenses in case of the unexpected.
In other cases, the proceeds can be used for paying off debts and/or the payment of final expenses.
Many people believe that life insurance coverage is unnecessary after an individual reaches a certain age such as 50 or 60.
But the truth is that, regardless of your age, you could still leave your loved ones with certain expenses that need to be paid upon your passing.
So, for many individuals, it can still make sense to have life insurance after age 60.
Why Have Life Insurance After Age 60?
With so many people living longer lives today, many of those who are in their 50s, 60, and older are remaining active for a longer period of time – and this can mean that these older individuals may still have debt obligations that will need to be paid off after they pass away.
For example, while many people in this age range used to no longer have mortgage or auto loans, today this is much more likely.
So, by having a life insurance policy in place, you can be more assured that these debts won’t be the financial responsibility of your heirs.
There are other reasons why it can make sense to have life insurance after age 60, too.
For instance, if you have a spouse or partner who relies on your income from a pension or other type of retirement plan, this income could disappear after you pass on.
This, in turn, could leave your loved one without a way to continue paying his or her living expenses.
Mike and Elizabeth
Recently I helped a couple facing this type of situation.
The husband Mike was receiving a pension of about $3,800 a month. He was receiving about $1,400 from Social Security and his wife Elizabeth was receiving about $1,100 from Social Security.
Since there was no survivor option on his pension, when Mike passes away the pension will stop.
Also, since when one spouse passes away the smaller social security check goes away, Elizabeth would be left with only the $1,400 Social Security check coming in each month.
I helped Mike secure coverage on himself. If Elizabeth were to predecease Mike, then Mike could just cancel the life insurance policy and save the money that was being paid for coverage.
But, with life insurance, the proceeds could be used for replacing that lost income source.
You may also have a favorite charity that could benefit from life insurance proceeds.
While you may give to this charity currently, by also making that entity a beneficiary to your life insurance policy, 100 percent of the tax-free proceeds could be put to good use.
In still other cases, some individuals may have an estate tax issue at the time of their passing.
This could mean that your loved ones may be responsible for paying a significant amount of taxes to the government.
However, if you have a properly constructed life insurance policy in place, not only can the taxes be paid with these proceeds, but the amount of the proceeds could even be excluded from your overall estate value.
There is also another key reason why many people who are over the age of 60 should consider owning life insurance. This is to cover final expenses.
Today, the cost of a funeral and other related costs could exceed $10,000 – this is especially true when you add in the expense of a burial plot, headstone, memorial service, flowers, transportation, and the printing of the funeral notices.
Unfortunately, many families of a deceased will not have this amount of money readily available for paying these costs – and, by taking the funds from their savings, or by putting the expenses on credit, it may put those you love into a difficult financial situation going forward.
With that in mind, having life insurance coverage that is earmarked for final expenses can be essential.
Types of Life Insurance Coverage Available to Over Age 60 Applicants
There are many different types of life insurance coverage that are available to those who are over age 60. These can include both term and permanent policy options.
With a term life insurance policy, an insured is covered by death benefit protection – yet without having to pay the added premium cost of also paying into a cash value component.
Term life insurance will – as its name implies – remain in force for a set number of years, or “term”.
During that time, the amount of the death benefit, as well as the amount of the premium, will usually remain fixed.
Some term life insurance policies will also allow an insured to “convert” the policy over into a permanent form of life insurance protection without having to prove their insurability.
A permanent life insurance policy will provide both death benefit protection, as well as possible cash value build up depending on the type of permanent policy.
This type of coverage can be beneficial for those who are over the age of 60 because, once you have qualified for the insurance, it typically cannot be canceled (unless you stop paying the premium).
Often, depending on the type of permanent life insurance that you purchase, the amount of the death benefit will also be guaranteed.
Because permanent life insurance is, in fact, permanent, those who are over 60 can rely on the coverage remaining force and know that it will be there when it is needed for their heirs.
To qualify for life insurance over 60, you may be required to fully complete an application for coverage that will ask you questions about your overall health, your health history, and your family health history.
This can get the life insurance company’s underwriters a much better idea of just how much risk the company may be taking on if they approve you for the coverage.
In addition, you may also be required to take a medical examination as a part of the insurance approval process.
During this exam – which typically takes about 30 minutes, and can be completed in your own home or other convenient location – a paramedical professional will ask you some additional health-related questions.
They will also get from you a heart rate and a blood pressure reading and will take a blood and a urine sample.
If you currently have any adverse health condition, such as high blood pressure, heart issues, or diabetes, the life insurance company will likely ask you some additional condition related questions so that they can get a clearer picture of your overall health.
Once all of your information has been collected and reviewed, the insurance company will then make a determination about the approval of the coverage, and will also determine an appropriate amount of premium to charge.
What If You Don’t Qualify for Traditional Life Insurance?
In some cases, an individual who is over age 60 (or under age 60, depending on their health), may not qualify for a medically underwritten life insurance policy.
This, however, does not necessarily mean that you won’t be able to get life insurance.
Another strategy that can be used for obtaining life insurance protection over age 60 is to apply for a no medical exam life insurance policy.
Without the need to take a medical exam, those who have certain health issues can still qualify for the coverage that the need.
Where to Find the Best Premium Rates on Life Insurance for People Over 60
There are many reasons why it can still make sense to have life insurance coverage over the age of 60. So, if you are seeking life insurance and you are over age 60, I can help.
I work with many of the best life insurance carriers in the industry – and I will assist you in finding the life insurance company and policy that best fits your needs.
By comparing from numerous insurers, I will also walk you through comparing the different policy premium options.
If you are ready to move forward, just take a moment to fill out the form on this page.
Should you have any additional questions and want to discuss your options with an independent life insurance expert you can give me a call. I understand that the process of purchasing life insurance can be somewhat confusing. So, contact me today – I’m here to help.