As the simplest form of life insurance with low premium rates and a predefined period of 10, 15, or 20 years, term life insurance is usually a sensible choice for the young or those building a family. They hope to receive coverage for mortgage payments, their children’s education, dependent support, or funeral costs at some point in the future. But is it possible for seniors to get term life insurance?
Seniors can still choose term life insurance because many insurers offer insurance policies to 60-year-old or older people. Term life insurance is a sensible option when the insured can allocate a limited budget to life insurance. They can convert term life insurance into a permanent policy with cash value and no insurability evidence when having more budget.
Moreover, term life insurance caters to temporary needs and future insurability. For instance, as a senior, you often have independents such as your children or spouse, who depend on your income and suffer financial burden when you pass away. Your family can use term life insurance’s death benefit to pay these costs.
Term life insurance is the simplest and most affordable kind of insurance. You need to care about your policy’s three things: premium, period, and death benefit.
When you purchase term insurance, your premium rates will be pre-determined by the original-age method. The premium is charged depending on your actual age when you buy that term policy. But the older you are when you apply, the higher your premium rates will be.
Besides, you need to select your policy’s term length. Those over 60 can choose 10-year or 20-year terms. Some insurers even offer 25-year term policies for over 60-year-old seniors. The term life insurers require you to take a medical exam or answer medical questions to quote the premiums. Thus, term life insurance can be challenging to qualify for when you have a health complication history.
Regarding the death benefit, term life insurance only guarantees a specified death benefit to your beneficiaries when you die within a specified term. It offers no other values except the guaranteed death benefit and features no savings component as in a whole life insurance policy.
As said previously, the premium is determined based on your actual age when you buy a term policy. The older you are, the higher the premium rates you have to pay. Below are samples of the term life insurance premiums for seniors.
10-year term life insurance premiums for seniors
20-year term life insurance premiums for seniors
N/A = Policies not available; there are some companies sell the policy for people up to 80 years old.
Other life insurance plans for seniors
Besides life term insurance, seniors have other options to pick.
Whole life insurance policy
Whole life insurance gives the policyholders peace of mind since they will receive the death benefit irrespective of when they pass away on the condition that they pay their premiums punctually. The policy has a savings component, which allows for cash value accumulation over time. The policyholders can withdraw a loan against the value.
However, a whole life insurance policy is a bit more expensive than other types, especially for those who purchase it later in life. Moreover, it takes at least ten years or more for the cash value to grow. Many insurance companies sell a small whole life policy as burial insurance for older people.
Guaranteed issue life insurance
Also referred to as “final expense” insurance or seniors life insurance, guaranteed issue life insurance requires no medical exam for the application. This policy features a two-year waiting period prior to a full benefit or a graded death benefit.
Unless the policyholders pass away due to accidental causes, their beneficiaries will not get the full death benefits within this two-year time frame. Instead, a smaller payout will be paid to them, often 110% of your premium rates.
Guaranteed universal life insurance
Guaranteed universal life insurance, a combination of term life and permanent life insurance, expires after a specific period. Unlike term life insurance, the insureds have to specify an age at which their policy will end, such as 90, 110, or 121, instead of selecting a coverage period.
The insured can pay lower monthly premiums compared to those of whole life insurance. Guaranteed universal life insurance offers both the death benefit and a small cash value. However, applicants only qualify for this kind of insurance if they pass a medical exam, which is difficult for seniors in poor health.
The final thoughts on ‘Term life insurance for seniors‘
In a nutshell, a term life policy can help the old with mortgage payments or other unpaid debts when they are gone, making their dependents free of financial responsibilities. Seniors can opt for this type of insurance or other policies such as whole life policy guaranteed universal life policy or guaranteed issue life insurance. Importantly, they work with an insurance agent or advisor to figure out the suitable amount of coverage for their situation.