Finding life insurance over 70 can be challenging, but it’s far from impossible. As an independent agency known for providing patient, personalized service, JRC Insurance Group has helped countless clients over age 70 find affordable, reliable life insurance coverage.
In this article, we will answer the most common questions we hear from clients in their 70s, so you can gain a better idea of how to move forward with shopping for life insurance. We will also provide links to other helpful resources on specific topics.
Quick Article Guide:
1. Is Coverage Still Available?
2. Can I Find Coverage Lasting Longer Than 10 Years?
3. What is Term Life Insurance?
4. What is Whole Life Insurance?
5. What is Guaranteed Universal Life Insurance?
6. Can Life Insurance Protect My Estate?
7. What is Pension Maximization?
8. Can I Use Life Insurance to Leave an Inheritance?
9. Will Life Insurance Cover Medical or Final Expenses?
10. Where Do I Start?
Whether by assumption or based off of a conversation with a big-box insurance agent, many people over age 70 assume they will not qualify for any life insurance, much less a policy that doesn’t break the bank. Luckily, these assumptions are false in most cases.
Coverage is absolutely available for those in their 70s. Just remember that the sooner you buy your policy, the better. That might sound “salesy,” but the reality is that the cost of life insurance increases by 15 to 20 percent each year after age 70.
The largest insurers will often tell clients that coverage is available but will end at age 80. Don’t settle for this answer! At JRC, we are able to shop dozens of equally respectable life insurance providers that offer coverage to age 85, 90, 95, 100, and beyond.
Term life insurance gives you coverage for a set number of years, usually in 5-year increments. It provides a death benefit (money paid to your spouse or heirs), at a fixed premium for the length of your term. While term life is usually ideal for young to middle-aged adults, there are still some term life options available to clients over the age of 70. Below we have included sample 10-year and 15-year term life rates for a male in excellent health between the ages of 70 and 79.
Whole life insurance provides lifetime protection at fixed periodic premiums and builds cash value in addition to your death benefit. It looks good on paper, but we generally recommend against whole life insurance due to the high cost, fluctuating rates, and low likelihood of accumulating significant cash value. With whole life over age 70, you’re limited to 100k of coverage or less, and the majority of policies are 50k. All in all, whole life is very expensive with very little “bang for your buck.”
Guaranteed universal life insurance (GUL) is usually the best option for those in need of “permanent” life insurance, meaning coverage that lasts for their entire life.
Guaranteed universal life gives you the peace of mind of permanent coverage but without the bells and whistles that often overcomplicate permanent policies—no cash accumulation, management fees, stipulation, or fine print. Instead, a GUL functions similarly to a term life policy, except instead of your term lasting a set number of years, it lasts to a specified age (90, 95, 100, 105, 110, and even 121). The key benefit to guaranteed universal life is that your rates are fixed, they do not increase as you get older. Whole life insurance policies on the other hand often increase in cost as you get older.
One of the main differences between whole life and GUL is that GUL requires a medical exam, which is advantageous to you if you are in decent health. Even with diabetes, high cholesterol, or a history of cancer, insurers will usually view you favorably as long as you are taking care of yourself. Without a medical exam, they have to give higher rates because they don’t know the level of risk they are taking. Learn more about guaranteed universal life insurance, and compare it with the pros and cons of no medical exam life insurance.
If your estate is valued at more than $5,450,000 as of 2016, it may be subject to taxes of up to 40% above the exemption. To shield their heirs from this tax burden, many high net worth families purchase life insurance, whether an individual policy or “second to die” coverage (meaning the heirs receive the death benefit only after both spouses die).
Here’s a real-life example from our previous article, “Life Insurance Over 70: How to Find and Keep the Right Coverage for You.”
“JRC recently worked with an older gentleman who lives in the Mid-Atlantic U.S. with his wife. He loves his profession and happily goes to work every day, despite having accumulated notable wealth and being well past the typical retirement age. He uses life insurance for estate planning, to effectively shield his two children from estate taxes down the road.
The client was originally working with a large, well-known non-profit in hopes of getting a third second-to-die life insurance policy. After becoming frustrated with the organization’s lack of responsiveness, he searched online for a life insurance agent and found JRC.
After shopping 40 top insurance carriers to find the right solution, we were able to help him funnel the cash value from his two second-to-die cash accumulation accounts toward one policy. This allowed him not only to condense his life insurance from a prospective three plans down to one, but also secure 15% more coverage and save roughly $24,000 per year in premiums—all at zero extra cost.
Now, he pays no monthly premiums and has peace of mind knowing that his life insurance is aligned with his estate taxes. He was even able to put the residual money he was going to spend on a third policy into a trust fund instead.”
If you are approaching retirement and deciding whether to accept your full pension or the reduced spousal or “survivor” benefit, consider using life insurance for pension maximization. Many people accept a reduced pension payout in order to get the spousal benefit, when they could have instead taken their full pension and provided even better protection for their spouse with life insurance.
To make the process easier for you, we have created a simple 5-step guide for pension maximization. Click over to that article for a detailed explanation on how pension maximization works with sample calculations and pro tips.
Yes! The death benefit in a life insurance policy can act as an inheritance, allowing you to spend your retirement savings and still leave a legacy. Even better, life insurance proceeds are tax-free, making life insurance a financially savvy inheritance mechanism. Guaranteed universal life insurance is especially effective as an inheritance because it allows you to lock in coverage to age 90 or later.
For those who already have an inheritance to leave behind, we often recommend a final expense policy. This is a minimalist policy designed to cover final costs and burial expenses.
Final expense policies carry death benefits between $5,000 and $25,000. Just like all other life insurance policies, the money is paid to your beneficiaries tax-free, in a lump sum if they wish, or in monthly installments. Typically, you will pay a lot less in premiums than the policy will pay out upon your death.
A final expense policy can also be helpful to cover the costs of end-of-life care. During an already upsetting time, many families are overwhelmed to find that their loved one’s medical insurance does not cover hospice or palliative care. A final expense policy can make it a little easier for your family to cope knowing they have a means to pay your end-of-life medical expenses.
Big-box life insurers specialize primarily in home and auto insurance, not life insurance. For this reason, it’s best to shop for life insurance with an independent agency like JRC.
We understand the comfort in going to a big name insurer, especially if you have been a customer of theirs for other types of insurance. But, understand that agents at these companies will not be as thorough in meeting your life insurance needs, because they have daily sales quotas they must hit. Chances are they don’t even know much about life insurance, because home insurance, auto insurance, and bundle packages are the main “money makers” for the company.
At JRC, we specialize in life insurance and life insurance only. We do not work for just one provider; instead, we shop 40+ top-rated companies to find the best rates and coverage available. You can find life insurance over 70, and we can help. We will walk you through the entire process from start to finish, with no obligations and no sales pressure. Call us toll-free at 855-247-9555 to speak with one of our agents, or get a free quote online using the button below.
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