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Affordable Life Insurance for 63-Year-Olds: The Ultimate Guide Before You Buy

life insurance for 63 year oldsFinding an affordable life insurance policy at the age of 63 can be a daunting process. The options are endless – there’s term life, whole life, universal life, guaranteed universal life, guaranteed issue, final expense…the list just goes on and on. It is easy to procrastinate, especially if you’re like most people and find shopping for life insurance overwhelming and mentally exhausting.

At 63 years of age, you might already be retired or getting ready to be in the next few years. If you’ve relied on group life insurance from your job all these years, but told that might be coming to an end soon, now what? Do you go without insurance, or buy an individual life insurance policy to keep your loved ones protected?

Perhaps you’re not quite ready to speak with an agent yet. Maybe you want to learn more first to better understand what you actually need, rather than make a poor decision you’ll later regret. If this sounds familiar, you came to the right place.

We created this article to explain the best life insurance options available for 63-year-olds, and help you consider things you may not have thought of yet. We hope you find this an easy to understand complete guide, which after reading, will know exactly what you need.

Quick Article Guide:

  1. Your Life Insurance Needs
  2. Types of Life Insurance
  3. Term Life Sample Rates
  4. Whole Life Sample Rates
  5. Universal Life Sample Rates
  6. Indexed Universal Life Sample Rates
  7. Guaranteed Universal Life Sample Rates
  8. Guaranteed Issue Sample Rates
  9. Who Doesn’t Need Life Insurance?

Your Life Insurance Needs

For starters, it’s important to determine why you need life insurance. Have the tough conversation…what would happen to your family or business if you unexpectedly passed away? How might their standard of living be affected once your income suddenly disappeared? How long would they suffer financially? Unless you have savings and are living debt free, it’s likely your loved ones or business would fall on hard times shortly after you’re gone. The real question is how much coverage is enough?

Still need help? We created a calculator to help you decide the right amount of coverage: “How much do I need?” It’s not one size fits all.

Once you’ve determined how much coverage you need, it’s important consider how long you will need life insurance. For some, financial protection is needed only for a relatively short period of time – until the mortgage is paid off, you’re debt-free, you reach retirement, or so your spouse can collect social security, for a divorce decree, until your kids/grand kids finish college, etc.

For others, the need for life insurance will last until death, no matter what age. Examples for lifetime coverage include: covering final expenses, pension maximization, leaving a legacy behind, covering estate taxes, chartable giving, funding trust for special needs child, etc.

If you need help determining life expectancy, we like the Social Security Administration’s mortality calculator.

Types of Life Insurance

types of life insuranceLet’s breakdown the main types of life insurance available and summarize what each is best suited for.

Term life insurance is by far the easiest to understand, and in most cases, the least expensive option. With term life insurance, you are only paying for the cost of being insured during the time you need it most. At age 63, available durations include 10, 15, 20 and 25-year terms. The term length you select at the onset is how long you can keep your policy without enduring an increase to your premiums.

Insider’s tip: Only two carriers offer a 25-year term life for 63 year olds – American General (AIG) and Transamerica.

Many people choose term life because of the low cost and flexibility of being able to cancel anytime without a penalty. The downside of buying term life is that you are likely to outlive your policy, and face skyrocketing premiums to continue coverage once your term expires. You can reapply for a new policy once that happens, but will have to re-qualify – and if you’re no longer healthy, that could be a big problem.

What if I’m uninsurable?

Luckily, most term life policies are guaranteed renewable (regardless of your health) at annually increasing premiums after the level term expires. It’s important to note that the increase will be significant, but if you’re terminally ill, it might make sense to continue paying. Also, the majority of term life policies have a conversion option where you can convert your term policy into a permanent policy (locking in a lifetime fixed rate) without having to re-qualify.

Most term policies allow you to convert before the end of your term, or 70th birthday, whichever occurs first. Be sure to check your current policy to see if it’s still convertible. If you’re unsure, give JRC a call and we’ll be happy to do a free policy review to help you understand your options.

If your need for life insurance will decrease over time, then chances are term life is your best option. Many people just need life insurance to bridge the gap until they are debt-free with plenty of savings, otherwise known as being self-insured.

Insider’s tip: Instead of buying one large policy, see if you can save money by layering multiple smaller term life polices here.

Term life is most commonly used:

  • to protect from loss of income
  • to pay off:
    • a mortgage
    • student loan
    • SBA loan
    • auto loan
    • miscellaneous debt
    • asset protection
  • for key man insurance
  • to fund buy-sell agreements for businesses

Reason being, most all these needs are temporary and ideally you will be self-insured upon retirement or repayment of debts.

Let’s look at sample Term Life rates below:

Sample Term Life Rates for a Non-Smoking 63-Year-Old Male in “Preferred” Health

Coverage Amount10-Year-Term15-Year-Term20-Year-Term25-Year-Term
$100,000$38.68$54.84$73.24$134.25
$250,000$86.24$111.80$160.17$291.85
$500,000$158.40$216.83$310.01$554.81
$750,000$234.30$321.30$461.08$829.45
$1,000,000$299.96$400.23$602.00$1,023.64

Sample Term Life Rates for a Non-Smoking 63-Year-Old Female in “Preferred” Health

Coverage Amount10-Year-Term15-Year-Term20-Year-Term25-Year-Term
$100,000$32.03$44.62$60.82$117.73
$250,000$66.07$89.62$130.94$233.46
$500,000$122.21$164.84$247.53$422.03
$750,000$180.28$244.90$368.94$630.28
$1,000,000$230.06$322.96$466.31$772.79

*Monthly Rates are accurate as of 09/15/2018 and are provided for illustrative purposes only.

Next is traditional whole life insurance, which is still a very popular option for many people. Whole life insurance lasts (just like it sounds) for your whole entire life. It has excellent guaranteed cash accumulation and normally pays dividends too.

Fundamentally, whole life insurance makes the most sense to carry on your legacy. The catch is…whole life insurance is the most expensive type of life insurance policy money can buy. The premiums are set from the onset and offer no flexibility.

If you end up buying a whole life policy, be sure any dividends paid are used to buy paid up additions. The paid up additions are essentially smaller policies paid up for life within your policy that add up over time. The paid up additions continue even if you end up surrendering your policy later on.

Whole life’s strong cash accumulation offers you the ability to borrow money from your policy in the future if you fall on hard financial times. Whole life insurance is typically 5-10 times the cost of a term policy. Many who end up buying whole life end up with a fraction of the coverage they would have bought as a term policy. For this reason, the majority of people who only own whole life insurance tend to be grossly underinsured.

If you are set on whole life, we recommend going with a Mutual company because historically, they pay the strongest dividends.

Let’s take a look at some sample Whole Life rates below:

Sample Whole Life Rates for Non-Smoking 63-Year-Olds

 $10,000 Coverage$20,000 Coverage$30,000 Coverage$40,000 Coverage$50,000 Coverage
Male$48.25$94.30$140.35$186.40$232.45
Female$37.72$37.72$106.75$141.26$180.48

*Monthly Rates are accurate as of 09/15/2018 and are provided for illustrative purposes only.

If you like the idea of cash accumulation but want more flexibility when paying premiums, Universal Life (UL) insurance can be a great alternative.

There’s traditional universal life, which credits the cash accumulation using the company’s interest credit rating. Traditional UL policies tend to earn conservative returns and high fees.

If you are already maxing out your other investments, it might be worth considering. Otherwise, UL policies are a costly investment vehicle. You would think this would deter buyers, but according to LIMRA, UL polices accounted for 38% of all life insurance policies sold in 2017.

Check out sample Universal Life rates below:

Sample Universal Life Rates for Non-Smoking 63-Year-Olds in “Excellent” Health

Coverage Amount$100,000$150,000$200,000$250,000$300,000$350,000$400,000$500,000
Male$153.08$221.75$290.42$359.08$427.67$496.42$565.00$702.33
Female$131.42$189.25$247.08$304.92$362.75$420.67$478.50$594.17

*Monthly Rates are accurate as of 09/15/2018 and are provided for illustrative purposes only.

Another type of Universal Life options is called Indexed Universal Life, or IUL.

The draw to this type of UL policy is that there can be a higher upside growth potential with the safety of having a 0 or 1% floor protecting from losses in down market years. IUL policies use one of the popular stock market indexes, like the S&P 500, Russell 2000, or the Hang Seng to credit gains to the cash value account in the policy without actually being invested in the market.

It’s important to read the illustration carefully when considering one of these policies as the participation rates, cap rates, and even indexes used can be changed at the insurer’s discretion. For more information about Indexed Universal Life policies, read this article.

See sample Indexed Universal Life rates below:

Sample Indexed Universal Life Rates for Non-Smoking 63-Year-Olds in “Excellent” Health

Coverage Amount$100,000$150,000$200,000$250,000$300,000$350,000$400,000$500,000
Male$158.26$234.73$311.19$368.25$440.83$513.42$585.99$715.10
Female$137.72$203.92$270.10$320.70$383.76$446.83$509.91$624.14

*Monthly Rates are accurate as of 09/15/2018 and are provided for illustrative purposes only.

The most popular Universal Life policy we sell is Guaranteed Universal Life, or GUL. Some people refer to it as “term for life”. Guaranteed Universal Life is basically a Universal Life policy stripped of the complex cash value and instead offers a guaranteed premium for life, or a specific birthday (of your choice) from age 90-121.

For more information about Guaranteed Universal Life, read our article, “What is Guaranteed Universal Life Insurance?

Check out sample Guaranteed Universal Life rates here:

Sample GUL Rates for a Non-Smoking 63-Year-Old Male in “Preferred” Health

Coverage AmountTo Age 90To Age 100To Age 110To Age 121
$100,000$149.30$170.34$183.93$194.00
$250,000$349.98$399.31$431.14$452.00
$500,000$699.96$798.62$862.28$869.00
$750,000$1,049.94$1,197.93$1,293.42$1,303.50
$1,000,000$1,350.61$1,540.98$1,663.82$1,696.00

Sample GUL Rates for a Non-Smoking 63-Year-Old Female in “Preferred” Health

Coverage AmountTo Age 90To Age 100To Age 110To Age 121
$100,000$128.26$152.56$161.00$161.00
$250,000$290.89$331.70$364.33$382.00
$500,000$581.77$663.38$728.64$731.00
$750,000$872.65$995.07$1,092.96$1,096.50
$1,000,000$1,118.63$1,275.56$1,401.04$1,415.00

*Monthly Rates are accurate as of 09/15/2018 and are provided for illustrative purposes only.

retirementWith the baby boomers nearing retirement, many of our 63-year-old clients are looking for whole life and universal life policies with living benefits. Many lifetime policies offer riders (usually for an additional cost) to help you pay costs of being confined to a nursing home, home health care, or if you become terminally ill.

With traditional long-term care policies continuing to rise, we’re seeing a huge increase in life insurance policies sold with living benefits. Not only do your premiums typically remain level, but these policies also provide the flexibility of receiving a portion of the death benefit (while living) if you become sick and need access to funds without tapping into your savings.

Many clients at 63-years-old just need a final expense policy to cover burial costs. These are relatively easy to qualify for and only ask a few health questions. Final expense insurance is basically a small whole life policy ranging from $5,000 up to $40,000.

Rates for final expense will be higher than term life, but unlike term, these policies will never expire. This a good option if you have little or no savings and don’t want to leave a financial burden to your loved ones to pay your funeral costs.

Unfortunately, not all 63-year-olds are healthy…then what? If you’re unable to qualify for final expense, there is guaranteed issue (GI) life insurance. With guaranteed issue, approval is guaranteed – no questions asked. These policies are offered in amounts from $5,000 up to $40,000.

It’s important to note that GI policies have a two-year waiting period before you are actually covered. If you die within the two-year waiting period, the insurance company will only refund all premiums paid plus interest (usually 10%).  Afterwards, you are covered for any cause of death – no exclusions – for your lifetime.

Check out sample guaranteed issue whole life rates here:

Sample Guaranteed Issue Rates for Non-Smoking 63-Year-Olds

 $5,000 Coverage$10,000 Coverage$20,000 Coverage$30,000 Coverage$40,000 Coverage
Male$35.30$68.60$135.21$430.19N/A
Female$25.95$49.91$97.81$330.69N/A

*Rates are accurate as of 09/15/2018 and are provided for illustrative purposes only.

Who Doesn’t Need Life Insurance?

who doesn't need life insuranceIf you are one of the fortunate 63-year-olds with no debt, good discretionary income and plenty of savings set aside, we consider you self-insured with really no need for life insurance. Ultimately, life insurance is supposed to protect your loved ones if your unexpected death creates a financial burden. Sure you can still buy life insurance if you choose, but in this scenario, we recommend you save your money.

If you are still reading this, you likely have a lot to think about. There is a surplus of life insurance options for 63-year-olds, especially if you are in good health.

At JRC Insurance Group, we represent more than 45 highly-rated insurance companies and are licensed nationwide. If you need assistance finding the best policy for your needs, please call us today 855-247-9555 and one of our friendly, knowledgeable agents will by happy to assist you.

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