Life Insurance Over 60 – An Insider’s Guide to Coverage
Those who reach retirement years often look back at their lifetime of hard work and realize that they want to preserve what they have earned and pass it on to loved ones.
The great thing about life insurance is that it’s an excellent tool to help preserve the wealth you have while creating a lasting legacy for your loved ones.
Buying life insurance after the age of 60 used to be a challenge because rates were unaffordable and coverage options were limited. Luckily, times have changed and this is no longer the case.
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Here’s what we'll cover in this post:
Do I Still Need Life Insurance?If you were to pass away tomorrow, your family could be faced with some unexpected expenses. Depending on their financial situation, covering these expenses may be devastating for your surviving loved ones.
Unless you have money set aside to cover your funeral and any other debts that you may leave behind, we recommend purchasing a life insurance policy.
Life insurance can provide your surviving family with a lump sum of cash to prevent your loved ones from having to deal with any unnecessary financial stress when your gone.
Life insurance is also commonly purchased after the age of 60 to replace potential lost income that your loved ones depend on, and experts recommend fine-tuning for your retirement by age 60, which usually includes evaluating your life insurance options.
Read our guide to income protection for breadwinners here.If you're going to be retire soon and your life insurance is employer-provided, it may be time to start shopping for a replacement policy. Life insurance can also be purchased for pension maximization strategies to help you get the most from your retirement.
If you have already retired, you may want to insure your retirement income for your spouse, especially if they are dependent on you or your pension.
Most financial advisers also recommend purchasing a life insurance policy that is large enough to cover any outstanding debt that would otherwise be left behind such as a mortgage, car loan, credit card debt, business debt, burial expenses, or unforeseen medical bills.
If you're financially secure but want to leave money for an inheritance, or to protect your estate from inheritance and estate taxes, you will need to purchase a permanent life insurance policy to make your coverage is still in place when you pass away.
Not sure where to begin? We can help! Toll-free 855-247-9555
Pension Maximization with Life InsurancePension maximization is one of the most common reasons that people over the age of 60 call us for life insurance. If your employer offers you a pension plan, you might be able to protect your spouse and save money, by selecting the single-pay plan and opting for life insurance rather than accepting a joint-pay or survivorship option.
With a single pay option, your spouse would no longer receive an income if you were to pass away; however with a joint-pay pension, your wife would still receive a monthly income from your pension even if you were to pass away. Because of this, joint-pension plans will dramatically reduce your monthly pension benefit.
This reduction in your monthly pension is usually so large that it is less expensive to select the single-pay option and buy a life insurance policy to protect your spouse instead, especially if you are in average or better than average health.
Instead of electing the joint-pay option and greatly reducing your monthly income, enjoy your retirement! Most of the clients we work with are able to save hundreds of dollars each month by buying life insurance instead of electing the joint-pay option that their pension offers.
The death benefit from a life insurance policy is usually paid out as a tax-free lump sum which provides your spouse surviving spouse with the freedom to pay off the house, use the proceeds of the policy to pay off bills, or invest to supplement their Social Security benefits and other income after you pass away.
If you are approaching retirement age, make sure you apply for your life insurance at least three months before your pension decision deadline. This will provide you with ample time to weigh your options. When making choices regarding your spouse's well being read our article "What They Haven't Told You About Insuring Your Spouse"
Depending on your need for life insurance coverage, we can offer $50,000 - $5,000,000 of life insurance with guaranteed rates until the age of 95, 95, 100, 105, 110 or even 121. We may also be able to offer you a 10, 15, or 20 year term life insurance policy as well.
All life insurance companies have a cut off age for their term life policies and the cut off age varies between companies. Since we work with dozens of life insurance companies, we can help match you to a company that fits your needs.
Here are some sample monthly rates for a 10-year term for a healthy male age 60 or older.
|Age||$50,000 of Coverage||$100,000 of Coverage||$250,000 of Coverage|
In some cases, if you’re older than the term life insurance cut off age, you may be able to qualify for a permanent life insurance policy such as a whole life or a guaranteed issue policy.
For more information ready our pension maximization guide.
What are the Best Life Insurance Policies for People Over 60 to Purchase?The answer to the question above depends on the reasoning behind purchasing the life insurance. In cases that you need to replace lost income or pay off significant debts, term life policies are the best and most affordable. The premiums remain relatively low because the policies require a health check and they do not build cash value.
Please be aware that many insurance companies have their term life insurance cut off at age 75, so in order to maximize your choices, you will need to purchase term life insurance sooner rather than later. If you are working with a local agent, your options may be even more limited as many of the companies that specialize in home and auto insurance stop offering life insurance after age 65.
Typically, we can help clients in fair or better health until the age of 79, but remember, the longer you wait to buy your policy, the more expensive it becomes.
If you’re purchasing life insurance for estate planning purposes, such as funding a trust, maximizing your pension, or providing liquid cash to cover estate taxes, you should probably look into a permanent life insurance policy such as a guaranteed universal life insurance policy (GUL).
No matter what your needs are, you should always speak to a licensed agent or financial advisor before moving forward on a policy. A guaranteed universal life policy is set up just like a term policy except you can guaranteed your rates and coverage much later into life, sometimes even up until the age of 121.
These policies do not build a cash value, your rates are not dependent on investments, and they are guaranteed not to change.
Monthly rates for a Guaranteed Universal Life policy with guaranteed rates and coverage until the age of 90 or later. Rates are for a healthy male, age 60 or older:
|Age||$50,000 of Coverage||$100,000 of Coverage||$250,000 of Coverage|
Is it Possible to Obtain Affordable Life Insurance After 60?It’s important to note when buying a life insurance policy that, life insurance coverage is not “one size fits all,” below are a few suggestions that can help you with your search.
Shopping the market – You can save yourself some time by calling an agent that works with multiple companies.
This is important because they can shop different insurance companies and provide you with multiple quotes. Working with a life insurance “broker” will also prevent you from having to call multiple agents and answering the health and lifestyle questions over and over again.
We also recommend comparing the different quotes that you receive so that you purchase the policy that best fits your needs.
Purchase life insurance ASAP - After age 50, life insurance becomes more and more expensive each year. If you need to purchase life insurance, we recommend making your decision as soon as possible because it can save you a lot of money in the long run.
Stay healthy – It’s no secret that your current health and lifestyle weighs heavily on how much your life insurance premiums will be. Things like smoking, drinking excessively, and being obese can raise the price of your premiums substantially. It’s important to do your part to keep yourself as healthy as possible so that you are able to afford the monthly premiums.
Do All People Over Age 60 Need Life Insurance?Not everyone needs life insurance after the age of 60. Yes, you read that correctly! We believe that everyone’s situation is different, and in some cases we've told potential clients, "Save Your Money!"
If you're debt-free and you've already set some money aside for your final expenses, long term care, and no one depends on you for an income, you probably don't need life insurance.
However, if you want to leave something behind to your loved one's or if your spouse depends on you for an income, give us a call. JRC Insurance Group works with dozens of highly-rated life insurance companies to provide our clients with the most affordable coverage available.
Our agency offer more than 100 years of collective experience and we specialize with applicants who are over the age of 60 and in less than perfect health. By asking you a few questions, we can quickly “match” your health profile with the best life insurance companies available.
Give us call today, toll free 855-247-9555 or
Managing Partner and Co-founder
Cliff is a licensed life insurance agent and one of the owners of JRC Insurance Group. He has helped thousands of families of businesses with their life insurance needs since 2012 and specializes with applicants who are less than perfect health. In his spare time he enjoys spending time with family, traveling, and the great outdoors.