Term life insurance for seniors over 70 isn’t always necessary but it is very possible to obtain should you need it. According to the National Center for Health Statistics, a healthy 65-year-old has a 50% chance of living past 85 years. So, if you still have a mortgage to pay, are supporting your family, or just had your current policy expired, this article may be for you. When it comes to life insurance for seniors there are many options, but if you are looking for the most economical one, term life would be best. Let’s dive in.
I wrote an article about term life pros vs cons here.
When Term Life Insurance for Seniors Over 70 Doesn’t Make Sense
I wanted to put this first so that I won’t waste your time. Don’t assume that you need something just because everyone says you need it. Below are some of the reasons that you may want to skip term life insurance:
- Your mortgage is paid off
- You don’t have any major financial obligations, such as properties, boats, or cars
- You have enough savings to cover your burial expenses
- Your children are grown and are not depending on your income
- You already have a sufficient policy in place
If you believe you still need life insurance, read on!
Is It Possible to Get Term Life Insurance if You are Over 70?
Sure it is – age isn’t the only thing that the insurance company is looking at when issuing a policy. You would go through underwriting, and approval will depend upon a few factors, such as your health, prescription usage, hobbies, profession, and even your current income, to name a few.
Since term life insurance is generally used as an income replacement, there is a “table factor” every life insurance company uses in order to determine a sufficient death benefit amount, and it’s related to the insured’s income, multiplied by a number (a factor which they come up with). So, in your 40s, you can multiply your income by 35 and this is the max amount they will issue. However, in your 70s you can only get 5 times as your income. The main reason is that as you get older, you have less bills and obligations compared with a 40-year-old.
How Long Can I Expect the Term to Be?
If you are 70 years old, you can find term life up to 20 years with most companies. If you are 71 years or older, you will only find 10- or 15-year terms. If you need a longer protection, you could opt for a guaranteed universal life policy (a “GUL”), which will give you a protection based on age rather than a specific term. For instance you could get GUL up to the age of 90, 95, 100, 105, 110 or even 121.
The longer the age, the more expensive it will be. If you need temporary protection, term would be best, since you will pay the least. Your main question should be how long do I need the coverage to last?
Do I Need to Take an Exam?
Yes, most term life policies will require you to go through a health exam. Especially when we are talking about death benefits greater than $250,000. It will be in your best interest to do so, provided you’re healthy enough, so that you can get the best rate. Of course, you can still get a no-exam policy, but you will pay more for it – sometimes twice as much. My advice is simple: if you are healthy and can wait for an underwriting decision (which takes 4-8 weeks), take the exam because you will pay less.
Should I Buy Term with No-exam?
Again, this will depends on a few questions you should ask yourself:
- Do you need $25K or less? If yes, you don’t need an exam.
- How soon do you need it? If you need it in a week or less, no-exam will be the right one.
- Are you willing to pay the extra costs? If you are not willing to pay more (sometimes 2-3 times as much), then just take the exam.
- Do you need more than $250K? If yes, then you will have to take an exam. Most companies don’t offer more than this without an exam.
- Do you need more than a 10-year term? If yes, you must take an exam since starting at the age of 70, they only allow a 10-year policy with no-exam.
The last thing you want is a fast-talking call center agent convincing you how much and what you need. Make sure you set the limits and shop for the best rate.
What if I Only Need a Burial Insurance?
Burial insurance isn’t considered term life insurance and the underwriting is a lot more lenient than term life insurance. The underwriting is simplified issue and you will still need to answer a few basic health questions.
If you only need $25,000 of coverage or less, you may opt for a burial insurance, or final expense, as we call it. Without going off topic too much, final expense policies come in three flavors: level, graded or guaranteed issue. The policies do not require a medical exam and will be issued based on your current and past health history. If you are looking for whole life protection and need only $25k or less, this will be the best choice.
I wrote an extensive guide for burial insurance for seniors that you may want to read first.
What if I’m not Healthy?
This will depend on the condition. You can expect to pay a higher rate or be declined, and at that point will need to apply for a guaranteed issue policy. You will want to talk to a broker and disclose all your health history so that you can get a rate before you even apply.
One of the worst things you can do is apply and pray. While I’m ok with praying for other reasons, it really doesn’t work when you’re trying to buy the right insurance policy. It’s better to know what rate you will qualify for and if you are likely to be approved now, instead of waiting 6 weeks and getting the rate in the mail, or worse decide that it’s not right for you, and having to start all over.
Term Life for Over 70 Sample Rates
10 Year Level Term Male
10 Year Level Term Female
15 Year Level Term Male
15 Year Level Term Male
Term Life No-exam for Over 70 Sample Rates
10 Year No-exam Term Male
10 Year No-exam Term Female
Tips for Getting the Best Term Rates if You’re Over 70
- Work with a broker who represents multiple insurance companies. Every company has it’s own set of underwriting criterias. Working with a broker who understands them all costs you nothing.
- Start online. Go ahead and run a few rates yourself so that you will have an idea of the costs before speaking to a broker. You can use this page to run the rates.
- Stay healthy. Not only will you get better rates, but your partner will appreciate that also.
- Don’t wait too long. At the age of 70, every year of waiting will cost you more, and the longer you wait, the less of a term you can get. At 70, you can buy a 20-year policy, but if you wait until you are 72, you can only buy 15-year policy, and at 80 you can only buy a 10-year policy and you will pay a lot more.
- Stay on budget. If it’s too much now, don’t buy or reduce the death benefit. You don’t want your policy to lapse in 5 years (when you may need it) because you can’t afford it.
- Avoid companies such as Globe Life or Colonial Penn. They will sell you a modified term life that changes every 5 years as you get older.
Life insurance isn’t an investment and should not be treated as such. I dislike the fact that some agents sell it as a type of investment. If you need to invest your money, find a stockbroker or a real estate investor to help you with such. Life insurance will just protect your loved ones should you die unexpectedly!
The negative view that you don’t get your money back if you buy term life and so it’s a waste is ludicrous. When was the last time you collected money on your home or car insurance you didn’t use? Life insurance is bought with the hope that your family will never have to use it, but with the preparation that it will be sufficient should they need to. As stated before, if you have no bills, mortgage, or major financial obligations, then you probably don’t need it. However, if you are looking for term life and you are over 70 and want some help sorting through it all, you can give us a call at 866-326-3053 or run the quotes here on this page.