Is Term Life Insurance for Seniors over 60 a Smart Buy?

Is Term Life Insurance for Seniors over 60 a Smart Buy?

When you are in your 60's and looking for life insurance should you buy term life? The answer is not a simple yes or no. It might be a smart purchase and it might not! There are two very important factors to consider. Who or what are trying to protect and where is your budget for this coverage? Let's look deeper.

Term Life Insurance for Seniors

Just to be clear, level term life insurance has a premium and a face amount that do not change for the entire term period. This is usually the type of term life insurance we recommend. After the term period has expired the premium will skyrocket and be unaffordable.

Here's what's available in your 60's:

10 year term- seniors through age 80 can purchase. Many carriers offer these policies. If you smoke, some carriers limit purchase to age 70 or 75.

15 year term- available for seniors through age 75. As with a 10 year policy many carriers offer, and they may limit age for smokers.

20 year term- a few carriers offer for seniors through age 70, many more through age 65. Smokers again will often see a lower age limit.

30 year term- not available in your 60's.

Now you understand how term life insurance works. Let's talk about the permanent options next.

Permanent Life Insurance for Seniors

There are 2 main types of permanent coverage available.

Universal Life Insurance- is a permanent policy that is very flexible. It can be structured to last your lifetime with no cash accumulation- essentially a term policy for life. This is usually the least expensive option. There are many different kinds of universal life insurance and that is a discussion for another day. These policies are available up to age 90, although you may be limited to how the carrier will rate you. (Age may impact you qualifying for the best ratings.)

Whole Life Insurance- is a permanent policy that amasses cash value. Although you can borrow from that value, it may affect policy guarantees so you want to be careful about that. Final expense policies are small whole life policies. They have easier underwriting guidelines and many people who cannot qualify for traditional policies can qualify for these type of policies.

Now we should consider your needs for insurance.

What are you trying to do?

There are many reasons to purchase life insurance in your 60's. What your goal is will help determine your first choice of policy. Some examples are:

Final expense protection- you want a small permanent policy to cover funeral expenses. A whole life final expense policy is most likely your best option.

Protect a spouse- the most comprehensive coverage would be a permanent policy- probably a universal life with no cash accumulation. These policies require full underwriting, so the next question would be your health. Can you qualify? And then can it fit your budget?

Protect a special needs child- the same as protecting a spouse. You want a policy that will last your lifetime if you can get it.

Estate Tax Protection- you would want a permanent policy. No cash accumulation needed. It's particularly helpful to cover inheritance taxes so your heirs don't need to come up with the cash.

Mortgage or debt protection- a term policy might be sufficient. It depends on your exact situation.

You need coverage for a specific time period- that one's easy- term life is your least expensive option.

Other Considerations

This is where your age, health and finances speak up. You have to be comfortable with your insurance premiums. No one wants to be insurance poor! Talk to your independent life insurance agent. They can help you determine the optimum policy to fit your needs and your budget. Independent life insurance agents help make this process easy.

The Bottom Line

Whether you're a senior who needs life insurance for 10 years or for your lifetime it's important for you to fully understand what you are buying. I know you want the best price possible, so talk to your independent life insurance agent. They can help you navigate the sea of choices and help you get the best bang for your buck and the best choice for your needs.

Author: Lenny Robbins.

Is Term Life Insurance for Seniors over 60 a Smart Buy?