Life insurance is often associated with securing financial stability for loved ones after a policyholder’s passing. But as individuals reach their 60s and 70s, the question of whether to invest in life insurance becomes more nuanced.
It’s never too late to consider life insurance. At any age, it’s a way to contribute to your legacy and shield your loved ones from the financial consequences of the unexpected. But your shopping experience might be a bit different than that of younger people. How much coverage do you need? Is the cost going to be outrageous?
Let’s breakdown finding the best life insurance policy for someone in their 60s.
Evaluate Your Personal Needs & Responsibilities
Life insurance wears many hats for different people. Common purposes of life insurance are:
- Covering final expenses, such as funeral costs.
- Replace income that will be lost upon your passing.
- Settle debts that may remain upon your passing.
- Provide a financial legacy to enrich your successors once you are gone.
Understanding why you’re getting life insurance will help lead us to the right policy. For instance, if you want to replace income or settle debts, you will need a policy with sufficient benefits to meet those financial goals.
Most likely, if you’re in your 60s, you want a life insurance policy that will cover final expenses and potentially replace some income for your partner or loved ones. You want to ensure no financial burdens will be falling on your family or friends after your passing. But you also don’t want to pay for more than you actually need.
Consider Your Health
Health plays a significant role in life insurance eligibility and premiums. Age-related health issues may increase premiums or limit policy options. However, some insurers offer policies designed specifically for older individuals, considering their health conditions.
Often the medical underwriting process (like a potential medical exam) deters individuals from applying for life insurance. But it’s truly not something to be afraid of.
The medical underwriting process helps insurers understand the risk they are undertaking. Without this process, they’re going to assume the most risk just to be safe. So while it can seem intimidating, often a medical exam actually provides you with a more reasonable cost.
Analyze Other Long-Term Goals
If leaving a financial legacy or ensuring a smooth transfer of assets is important to you, a larger policy might align with your goals. Keep in mind, however, that over the age of 60 you are already going to be dealing with higher premiums. So if your family members are secure and self-sufficient, it might be wise to keep your policy to a minimum.
A Whole-Life Insurance Policy Often Makes Sense
Whole-life insurance policies are a type of permanent life insurance that provides coverage for your entire lifetime. Unlike term life insurance, which only covers you for a specific term, whole-life insurance is there for you until the end. Why is this the best option for most seniors?
You’re able to choose the coverage amount that best fits your needs, ensuring that the policy covers your final expenses and any additional financial obligations. The median cost of a funeral is $7,848, according to a recent study conducted by the National Funeral Directors Association.
Because whole-life insurance guarantees coverage for your entire life, your policy will pay out no matter when you pass away. Additionally, the underwriting process for small whole-life policies is typically less stringent and more straightforward than for larger life insurance policies. This simplifies the application process for seniors quite a bit.
Should I Go With the Cheapest Policy?
It is tempting, but might not be the best option.
You do not want to neglect the reputation of the insurer. If the insurance company fails or becomes insolvent, your death benefit and whole life cash values may disappear. It’s always wise to consider a healthy company for your insurer, even if it means paying a little more premium. Going with a struggling company that’s offering a low monthly cost is not a risk you want to take at this stage in your life and career.
Is Life Insurance Expensive for Those Over 60?
The short answer is yes. Insurers price life insurance based on the likelihood that the insured individual will pass away in the near future and the company will have to pay the death benefit. That risk increases as you age, and as such the companies charge a higher premium. But that doesn’t make it worth skipping. With the right resources, you can find a policy that suits your goals at a reasonable cost.
Try Our Online Life Insurance Calculator
Small whole-life insurance policies can be a great choice for those over the age of 60 who are looking to ease the burden of final expenses on their loved ones, but it’s always crucial to compare policies. Our online life insurance calculator guides you through the analysis of your financial needs. Our online calculator is designed to provide you with the expertise of an insurance advisor in a complete digital experience, available 24/7. Still have questions? Give our team a call.
By answering a few quick questions, you can quickly find the best balance of value, price, and protection for your loved ones.
