Here at IBUSA, we understand that when it comes time to purchase a life insurance policy in your 70s, most folks aren’t looking to purchase a GIANT multi-million dollar life insurance policy.
Instead, most will be trying to decide what they should do with an existing life insurance policy that’s about to expire.
Decide if they should purchase a small life insurance policy to help their loved ones deal with any final expenses and burial costs that could arise after they’re gone.
This is why…
We wanted to take a moment and discuss some of the “issues” someone in their 70s might encounter when trying to answer these two questions. As well as provide some valuable advice about what one should be aware of should they choose to purchase a new life insurance policy in their 70s.
Questions that will be address will include:
- What type of life insurance policies are available to 70-year-olds?
- How Much is Life Insurance for Ages 70-79?
- How much life insurance can I qualify for?
- What are the pros and cons of purchasing a burial life insurance policy?
- What can I do to improve my chances of finding the best life insurance policy for me?
So, without further ado, let’s dive right in!
What type of life insurance policies are available to 70-year-olds?
As a 70-year-old, you should still be eligible for the different types of life insurance policies in the marketplace.
What changes as…
One ages is the availability of certain products within these larger categories and the requirements one must meet to be able to qualify for coverage.
For example, while a 70-year-old may be able to qualify for a traditional term life insurance policy, you’re not going to find insurance companies willing to offer you a 30-year term life insurance policy.
Instead, they’re probably only willing to offer you a 10, 15, or 20 year.
Most (if not all) insurance companies won’t offer any no medical exam life insurance options over $50,000.
Plus, most insurance companies will also require applicants looking for more coverage than this to have had a recent physical by their primary care physician within the last six months.
And an EKG will also likely be required during your medical exam when applying.
Final Expense Insurance
Many 70 year olds simply want to leave a little something behind to their family to cover final expenses and burial costs.
The good news is we work with many of the best final expense insurance companies, and can help you compare quotes and policies from each.
Life Insurance Rates Ages 70-79
The following term life insurance rates are for 70 year olds. One thing to take notice of is that the term lengths available for 70 year olds is limited to 15 year term life insurance or less.
So, now you have seen term life rates, but what about smaller whole life insurance policies for final expenses and burial costs?
The following table shows whole life rates for ages 70-79. All whole life insurance quotes shown below are guaranteed to stay the same for your lifetime.
How much life insurance can I qualify for?
Qualifying for coverage beyond $50,000 can also become more challenging in one’s 70s, particularly if one is retired and isn’t earning any “Active” income or income that would disappear at the time of their death.
This is because…
Most life insurance companies use a formula to determine how much life insurance one ought to be able to purchase based on one’s age. This formula generally allows people up to 70 to purchase five times their annual “active” income.
Beyond 70 years of age, this number drops down to zero and becomes something that is decided on a case by case basis.
A case by case basis issue does not consider how much insurance you can afford, rather how much insurance would be needed to make your family “financially whole” if you died.
You can use our life insurance calculator below to get an idea of how much coverage you would ideally want.
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, the good news is…
That income, such as pensions or retirement benefits that would disappear at the time of your death, would likely qualify as “active” income.
But this is something that you would want to make clear to the insurance company you’re applying with.
Otherwise, it might not be “automatically” included. This is why it’s always important to work with an experienced agent on these issues so that they can avoid any unnecessary delays or denials.
What are the pros and cons of purchasing a burial life insurance policy?
OK, now that we’ve covered the fact that folks in their 70s will still “theoretically” be able to qualify for a traditional term or whole life insurance policy, we want to take a moment and focus on those who can’t qualify for one and instead need to consider final expense insurance.
This group of individuals…
Will likely be those who have been diagnosed with some type of pre-existing medical condition, which now prohibits them from being able to qualify for traditional coverage.
The good news is…
There still may be a “type” of life insurance policy that they will be able to qualify for. The bad news is that this “type” of life insurance may not be exactly what they’re looking for.
This is why we want to take a moment and discuss what a Guaranteed Issue Life Insurance Policy is and what are some of the pros and cons of owning such a policy.
Guaranteed Issue Life Insurance Policy Pros
The main advantage of a guaranteed issue or final expense life insurance policy is that it is a life insurance policy that just about anyone can qualify for regardless of their past or present health condition. This means that even if you currently have cancer, heart disease, or other chronic and/or life-threatening medical conditions, you still have a chance to qualify.
This is because…
All one needs to do to qualify for a guaranteed issue life insurance policy is to be a US citizen, live in a state where guaranteed issue life insurance policies are offered, and meet the required age limits when applying (typically 45-85 years of age, with some exceptions). That’s it!
“Which is great!”
If you’re not able to qualify for any other “type” of life insurance policy, because at least now there is an option for you to consider. An option that will have some definite drawbacks, but none so large as being impossible to qualify for.
Guaranteed Issue Life Insurance Policy Cons.
When we here at IBUSA advise clients about some of the potential “cons” or “weaknesses” of a guaranteed issue life insurance policy, we generally focus on three main points.
In our opinion, the first weakness is that these “types” of life insurance policies only offer a limited amount of insurance coverage (usually $25,000 or less).
Which means that…
If you’re looking for more coverage than this, chances are a guaranteed issue life insurance policy isn’t going to be a good fit for you.
Now, it may be possible to purchase several different guaranteed issue life insurance policies from several different life insurance companies so that your total insurance coverage can be more than just 25,000 dollars, but this then leads us to the second potential weakness of a guaranteed issue life insurance policy which is…
Now we don’t want to suggest that guaranteed issue life insurance policies can’t be affordable.
We just want to make it clear that these “types” of life insurance policies will tend to cost more for the amount of coverage that they offer than another “type” of life insurance policy would.
But, if you’re not able to qualify for those “types” of policies, it probably doesn’t matter all that much anyway.
The last “weakness” that…
We want to focus on a specific “clause” that will be written into every guaranteed issue life insurance policy that will limit when the policy will cover an insured for NATURAL causes of death. Natural causes such as:
- Heart attack,
The “clause” is commonly referred to as a Graded Death Benefit and will usually last for the first two to three years, depending on which company you choose to purchase your final expense insurance policy from.
For those thinking that a graded death benefit is a complete “scam” because it prevents a life insurance company from having to pay a death benefit for natural causes of death within the first two to three years, it’s important to remember that this is the only thing protecting insurance companies from insuring someone that is REALLY, REALLY SICK.
Because there isn’t any underwriting going on with a guaranteed issue life insurance policy.
And because the insurance companies aren’t going to require an applicant to take a medical exam or answer any health-related questions, the graded death benefit is the only way that it can financially protect itself.
The good news is…
That if you do die from a natural cause during the graded death benefit, most companies will return all of the premiums paid (and sometimes a percentage more on top of this number) to your beneficiary.
Because nobody can predict an accident happening to them, these “types” of life insurance policies will provide immediate coverage in the event of an accidental death, so at least you’ll have some protection once you are insured.
What can I do to improve my chances in 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 when looking to buy a new or replace an existing life insurance policy in their 70s. This is why it only makes sense that there probably isn’t one life insurance company or policy that will 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 is able to 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 simultaneously shop multiple life insurance companies 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!