Here at IBUSA, we know many people want to avoid having a paramedical examiner come to their home for a face to face meeting. The good news, many companies still provide some type of no exam life insurance for people ages 60-69.
But finding the best life insurance rates in your 60s can sometimes be challenging.
Challenging because it may be your first time purchasing a life insurance policy and you’re not sure what kind you should get or you’re nearing the end of an existing term life insurance policy and you’re not sure what to do.
Not to mention the fact…
As a 60-year-old, there is a greater likelihood that you have been diagnosed with a pre-existing medical condition or prescribed a prescription medication, which may make it more difficult for you to qualify for coverage as well.
For this reason…
We wanted to take a moment and discuss some challenges that people in their 60s may face when applying for a traditional life insurance policy and provide some useful “tips” that may help you find and qualify for the best possible life insurance policy for you.
Questions that will be addressed in this article will include:
- How Much Is Life Insurance for Ages 60-69?
- What types of life insurance options are available to 60-year-olds?
- How much life insurance will I be able to qualify for?
- Should I renew my guaranteed renewable term life insurance policy upon expiration?
- What can I do to increase my chances of finding the best life insurance policy for me?
So, without further ado, let’s dive right in!
Life Insurance Rates Ages 60-69
You may notice that there are no 30 year term life insurance quotes available and after age 65, there are no 25 year term life insurance quotes as well.
This is because companies will not provide a term that extends past age 90.
Some companies offer a guaranteed renewable provision in the policy that extends to age 95. However, the premium will exponentially increase each year after the initial term ends.
We mention this to help you consider how long of a period is going to be best for you. It might not make financial sense to get covered as long as possible, unless you plan on choosing permanent life insurance.
What life insurance types are available to 60-year-olds?
At first, this may seem like a strange question to ask because the truth is people in their 60s will still be able to qualify for term and whole life. The only problem is that as one becomes older, some of the “options” within these broader categories of different life insurance policy types may disappear.
While a 60-year-old will be able to qualify for a traditional term life insurance policy, most insurance companies won’t offer a 60-year-old a 30-year term. Rather, 10 year term life insurance and perhaps a 20 year term policy may be available.
This means that if they want to purchase a policy that will remain in force for more than 20 years or so, they’re most likely going to need to turn to a whole life insurance policy instead.
It should also be noted…
That many of the no medical exam life insurance policy options that are available to those in their 30s,40s, and 50s can become more difficult or “not available” as one enters into their late 60s.
Final Expense Whole Life Insurance
Another type of coverage you may want to consider is final expense insurance.
Final expense insurance, a/k/a burial insurance, is a small whole life insurance policy that covers your burial and final expenses.
You can check out the rates on a $25,000 life insurance policy below.
How much life insurance will I be able to qualify for?
You can use the following life insurance calculator to get an idea of how much life insurance you need.
Your total cost for years of retirement at per year is:
Assuming you retire at age , you have investing years left. Using a annual rate of return for your investments, you're expected to earn a total of .
Now, one thing that people don’t necessarily realize about buying life insurance is that insurance companies will place limits on how MUCH life insurance an individual can buy based on their age and current income levels.
The main reason…
Many folks aren’t aware of this because the “formula” that many life insurance companies use to determine how much insurance someone can purchase on themselves is pretty liberal (especially at a young age). For example, let’s take a look at what a 30 year old earning 40,000 dollars a year might be able to qualify for.
Using the most common…
Formula for determining a “financial justification” most life insurance companies would allow someone in their 30s to purchase up to 25 times their annual income. This example means that he or she would be able to purchase up to 1 million dollars in coverage.
“Which is great for a 30-year-old!”
The only problem is…
That as one age, the “multiple” used to determine how much an individual will be able to purchase will decline. And in the case of those in their 60s, this number is going to decline rather rapidly.
For someone between the ages of 56-65, the limit will usually drop down to 10 times the applicant’s annual income. Then after age 65, this number is reduced down to 5 times the applicant’s annual income.
A number that can significantly reduce the amount of life insurance one can qualify for, particularly because only “ACTIVELY” earned income will be used in this equation, meaning that any “PASSIVE” income or income that would continue to be earned after you died would not.
When we look at what a 60-year-old would be able to qualify for making 40,000 a year, we see that they would no longer qualify for a million-dollar life insurance policy.
Instead, they would only be able to qualify for 400,000. And a 65-year-old would only be able to qualify for $200,000 in coverage.
Which may seem…
Like a lot, but remember, this is right around the time that a lot of folks are thinking about retiring.
And once they do decide to retire, most folks will see the vast amount of their “active” income drop down to zero, making it very difficult to qualify for any significant amount of traditional term or whole life insurance coverage (regardless of whether or not they can afford it).
Should I Renew My Term Life Policy After It Expires?
The answer to this question can either be completely obvious or really difficult, depending on the situation in which an individual finds him or herself. Because while having the ability to “opt-in” to the guaranteed renewable clause is an excellent option for some.
It’s probably safe to say that for most, the idea of continuing to keep a term life insurance policy in place utilizing the guaranteed renewable clause is going to become unsustainable in the long run.
Let’s take a look at a couple of scenarios one might find themselves in where we’ll find that having access to a guaranteed renewable clause can be great, and when it’s probably not going to be all that helpful.
In our first example, let’s look at someone who’s 30-year term life insurance policy is set to expire at the end of the month and just been admitted into hospice care due to their fight with metastatic lung cancer.
In this example, were their term life insurance policy not renewable, this family would face the terrible situation of caring for their loved one while simultaneously worrying that their loved one’s insurance was ending soon.
For this family, once the original 30-year term life insurance expired, they would be able to keep their loved one’s insurance in place by simply taking advantage of the guaranteed renewable clause.
“which is great!”
The only problem is…
That this family is likely to get a pretty big surprise when the get the first insurance bill. Surprised because, depending on which company they have coverage with, the price of their beloved’s insurance is about to get ASTRONOMICALLY higher than before the original term expired.
But since the insured is in hospice, it may make sense to pay the increased premiums for a short period while they are still alive to make sure they have life insurance in place when they die.
For this example, we’re going to want you to consider a 54-year-old woman who has recently gone into remission after battling stage 3 breast cancer. Her treatment consisted of a double mastectomy and is now considered cancer-free.
The only problem is that her 20-year term life insurance policy that she purchased when she was 34 is set to expire in two weeks, and her new guaranteed renewable rate is expected to triple!
To make matters worse…
In this example is that due to this patient’s cancer, she will be unlikely to be able to qualify for a new term life insurance policy for at least 5 to 10 years, meaning that if she wishes to continue to be insured, she will need to pay this new “increased rate”.
Will continue to increase year after year until she either can’t afford her coverage any more or decides she can qualify for a new life insurance policy after years and years in remission.
This is an example that many life insurance agents don’t like to talk about when they mention that a life insurance policy has a “guaranteed renewable” clause.
“Sure, it’s renewable, but at what cost?”
In this situation, the insured realizes that their term life insurance policy is about to expire and realize that the new “guaranteed renewable rate” will be outrageous. Fortunately for the insured, however, they will immediately qualify for a new term life insurance policy.
Unlike the guaranteed renewable rate, they will be able to qualify for a new term life insurance policy at a new rate, which will presumably be lower than what they were being offered by NOT applying for a new life insurance policy.
We should point out that even this NEW rate will likely be much more expensive than the rate they received 30 years early, which is why they may decide that they no longer need as much insurance as they purchased 30 years ago, or they may decide to reduce the length of this next insurance policy if they believe that their insurance needs won’t last well into their 70s or 80s.
Getting back to the question at hand,
If I have a guaranteed renewable term life insurance policy now, should I just keep that in place, or should I apply for a new life insurance policy?
That will ultimately depend on the situation you find yourself at the end of your existing term and whether or not this option is even available to you. This brings us to the last topic that we wanted to discuss here in this article, which is…
What can I do to increase my chances of finding the best life insurance policy for me?
As you can see from this article, there are many things that one should be aware of looking to buy a new or replace an existing life insurance policy in your 60s, which is why it only makes sense that there probably isn’t one life insurance company or policy that’s going to be the “best” for everyone.
For this reason…
Logic should dictate that when it comes time to find the best life insurance policy for you, you’re going to want to shop around a little bit before you apply with any “one company.”
This is why we here at IBUSA have chosen to remain an independent life insurance brokerage that can work with dozens of different life insurance companies so that when it comes time to help you find the best life insurance policy that you can qualify for, we don’t have to rely on a..
“One size fit’s all”!
Instead, we’re able to shop multiple life insurance companies simultaneously and then present you with several options to choose from. So, what are you waiting for? Give us a call today, and let us show you what we can do for you!