Whole Life Insurance for Seniors over 70 (No-Exam)
Whole life insurance for seniors over 70 is not only feasible but also very affordable. I get this question often when a client calls our office to request a quote: “Can I buy whole life insurance if I’m over 70?” Sure, you can. Age isn’t the only determinant the carrier views when underwriting your application.
While buying life insurance in your seventies isn’t always necessary, you want to make sure that if you do buy, you buy the right coverage with the appropriate company at the best possible price.
There is no room for error because purchasing a policy at an older age is very different than buying a policy in your thirties. If you buy the wrong policy when younger, you can go ahead and replace it with another one.
At an older age, you may find that you can no longer qualify for a policy because of pre-existing conditions or the affordability factor due to your current age. This article will help you avoid just that!
What Is Whole Life Insurance Coverage?
Whole life insurance is also called permanent coverage because it is meant to remain in force for the insured’s entire lifetime, provided premiums are paid on time. Whole life offers fixed premiums and a death benefit to be paid to your designated beneficiaries when you pass away, no matter when that time is.
Additionally, it provides a cash value component which you can access in the future through a loan or if you choose to surrender your policy. Simply put, whole life insurance is for those who seek guarantees in exchange for a higher cost.
When Should Someone over 70 Consider Whole Life Insurance?
For those who need a higher coverage amount (more than $50,000 in death benefit) or have other goals than end-of-life expenses, such as key person life insurance or mortgage protection, they should look elsewhere for a different type of coverage.
On the other hand, if your sole purpose for buying life insurance is to cover your burial and final expense needs, but you have enough money to cover it should you die tomorrow, then there is no need for buying a policy.
The intended purpose to buy a policy in the first place is not to be a burden on your loved ones when you pass away, but if you are self-insured (have enough money to cover your burial expenses), skip the article and the life insurance shopping and go have ice cream.
Simplified Issue Whole Life Insurance for over 70
If you are still reading this article, you probably need whole life insurance. Let me go over the basics and types of whole life insurance you can expect to encounter when searching for coverage. Most final expense policies with a face amount of $50,000 and lower are simplified issue.
Simplified issue whole life insurance is insurance jargon we use to describe a policy that doesn’t require an applicant to undergo an exam as part of the underwriting process.
The insurer is using other ways to manage the risk you pose to them by conducting a phone interview to verify your health answers on the application and reviewing public database records such as Medical Information Bureau and pharma database (which can reveal other health issues and prescription usage).
The underwriting process is quick and, considering there are no exam results the carrier is expecting, the decision can be anywhere from immediately to two weeks’ time depending on the company.
Simplified Issue Whole Life Quick Facts
- Faster turnaround process for issuing your policy
- No medical exam is required
- Phone interview, pharma database, and prescription database search
- Max face amount is $50,000
- Most health questions go back up to five years
- Your premium will never increase as you get older
- There is no expiration date, coverage lasts a lifetime
Types of Simplified Issue Whole Life
Not all whole life insurance policies are created equal. Your overall health will dictate the type of policy you can qualify for. Every life insurance on the market has distinctive underwriting guidelines in which they classify a potential client for coverage. Some companies will issue a level benefit plan if you have type 2 diabetes; others will give you a graded benefit plan for the same condition.
Some companies ask about your health history for the past two years and ignore any health challenges you had before that; others will go back five years or longer in some cases.
This is why it’s imperative that you choose the right company with the highest likelihood for approval based on your over whole health and how far back the carrier is looking at your health history. There are three types of coverages you must be aware of when shopping for whole life insurance.
Level Benefit Whole Life
This is also called immediate death benefit because there is no waiting period in which the policy is in effect. Once the underwriter issues the policy, the insurance company will pay the benefits after the insured’s death at any time, whether it’s days or years. You will need to be in good health without significant health issues such as heart failure or stroke to get approved for coverage.
Graded Benefit Whole Life
You can have a few health issues and still qualify for coverage, but there is a trade-off. Not only will the premium be higher, but if you pass away during the first two to four years after buying the policy (depending on the company), your beneficiaries will collect a portion of the death benefit and not the full amount.
For instance, Assurity will pay 40% of the death benefit amount for the first year, 75% after two years, and will only pay 100% of the benefit in year three and beyond.
Modified Benefit Whole Life
This is also called guaranteed issue because your acceptance for coverage doesn’t depend on your health history. In fact, there are no health questions on the application you need to answer.
It comes at a higher cost, and they all have at least two-year clause or exclusion that says that if you die within two years, not accident-related, they will not pay the full death benefit amount. Instead, they will only pay your heirs the premium amount plus 10% in interest.
You want to make sure these policies are never your first choice, and you only examine them after you’ve exhausted all other options.
Tips to Find the Best Rates
- Compare rates: Simple but useful tip! You will be surprised to know how many individuals just call a company directly and buy a policy because of a TV advertisement or because their mailman told them the other day how wonderful this company is while delivering mail.
- Avoid guaranteed issue coverage if you can. Only consider it after contemplating all other options, and never let this coverage to be your primary choice. Just the other day, I had a client call me to inquire about guaranteed issue coverage. I asked him, “Why do you want to pay more?” He gave me a few minutes to ask him a few health questions and let me advise him on the best coverage. He said, “I already talked to a broker and he suggested guaranteed issue because I take anti-depressant medication.” I said, “That’s it?” He replied, “Yes.” Long story short, I put him on a level benefit plan which saved him the two-year exclusion, and he paid less for it. Don’t assume you can’t get a traditional policy and opt for guaranteed issue. Many brokers place individuals in the wrong plans because they don’t want to work. It’s not only unethical, but it’s bad business practice.
- Buy what you need and nothing more. According to parting.com, an average funeral cost can be anywhere from $7,000 to $10,000. Of course, this is in today’s dollars, and you can add a few thousand just for inflation’s sake, but don’t let someone convince you that you need $50,000 life insurance if all you are looking is burial expense.
- Please don’t wait. No, I’m not convincing you to buy life insurance, nor do I have the power to do so via words on a page. The reason I’m saying is that I have seen too many cases in which tomorrow never came and when they wanted to buy a policy, it was too late. I’m sure if you had a day to live, you would buy a policy right now. The problem is how do you know you have another day?
- Make sure you buy a policy from an A-rated company. Too many insurance companies come and go with introductory prices and agents who are willing to sell their products without due diligence or regrets. If it’s a company you’ve never heard of before or prices are too good to be true, you may want to skip it.
Whole Life Insurance for over 70 Sample Monthly Rates
Level Benefit Whole Life Insurance Male
Level Benefit Whole Life Insurance Female
Graded Benefit Whole Life Insurance Male
Graded Benefit Whole Life Insurance Female
Guaranteed Issue Whole Life Insurance Male
Guaranteed Issue Whole Life Insurance Female
Buying life insurance in your seventies isn’t always necessary. Your financial situation, overall health, and the reasons you think you need it will be some of the questions a legitimate broker would ask.
If a broker doesn’t take the time to ask these questions and recommends a guaranteed issue policy without even asking about your health, you should look for another broker.
There are other types of coverage you may need to examine such as term life insurance or guaranteed universal life policies. However, this is only recommended if you need more than $50,000 in face value.
You can start by clicking on the form on the right side of the screen and compare some of the best whole life insurance for people over 70 years old.