Purchasing Life Insurance as a Senior

If you had owned term life insurance previously but the term is coming to an end soon, you might be wondering what your next best option is. Perhaps you’re a senior who’s planning to retire or already retired, maybe you’ve paid off your mortgage, and your kids are adults and out of the house – well, what’s the point now in renewing your term life? Do you really still need life insurance as a senior?

As you’re likely already aware, the best way to get cheaper life insurance is to purchase it the moment you need it, and ideally when you’re much younger. As a senior, buying life insurance can be much more expensive, but it can help you out considerably to cover outstanding debts, pay for final expenses, and provide for your loved ones.

Even as a senior, you may still be eligible for life insurance. Ask an Excalibur Defender today about senior life insurance or read on to learn how you need to go about determining coverage as a senior buying life insurance for the first time, whether your existing term policy is eligible to convert into a permanent one, or if purchasing life insurance at an older age is still the right choice for you.

Why might a senior purchase life insurance?

For seniors, life insurance can be an option to still provide a certain amount of cash upon your death which allows you to tie up any loose ends or accomplish things you may not have otherwise been able to upon initially purchasing your policy. A cheap policy might pay out about $25,000 upon your death or less if you are fairly constrained in your budget. This money can also be used to fund final arrangements and funeral expenses, so your family isn’t saddled with that burden.

But often, seniors want to purchase a life insurance policy to benefit those that they love. For them, this could be a means to top up what their spouse’s existing savings already are – especially seeing as savings can be drained very quickly in retirement! In fact, a 2019 Survey of Households suggested an average of $48,453 in expenses annually for each year of a 25 year retirement.

Purchasing life insurance as a senior can also be a way to contribute to a charity that you believe in, and it can ensure that your values live on – even long after you have passed.

These are just a few of the reasons why a senior might purchase life insurance. Everyone’s circumstances and needs are different, of course, so as your needs change, so might your coverage requirements for life insurance.

Am I eligible for term life insurance after I hit a certain age?

Some insurers may not offer life insurance policies to those over a certain age, usually 75. At this point, it’s likelier that you’d need to purchase permanent life insurance as an option to ensure coverage for any medical debt and funeral expenses. Life insurance over 60 might still be a possibility, and it can always be used as a way to leave a tax-free sum of money to an estate or loved ones, and is excellent if you do not have savings and may have ongoing debts that could be passed on to your family.

What type of insurance is a senior eligible for?

Some varieties of coverage do have age limits, as mentioned previously. “Senior” can sometimes be a term used to refer to someone of a certain age, but really every organization, business, and area has different qualifications for senior. For example, most local pharmacies deem anyone over the age of 55 as a senior. Typically, insurance companies have no such definition. Your eligibility for specific coverage is based on your specific age, not whether or not you define as senior, or whether or not you’re retired (the average age of retirement in Canada being 64.)

You may not be eligible for term life once you’re 75 or over, but you could seek out insurance companies with alter age limits or get whole life/permanent coverage. These would be more expensive options but would cover you for the remainder of your life and grant a sizeable cash sum.

Simplified issue life insurance is best for any seniors over the age of 70 who do have health issues which may not allow them to qualify for standard coverage. Permanent life insurance is a good option as a senior so long as you have good all-around health and want to cover end-of-life medical costs, an estate plan, and any final expenses. Finally, guaranteed issue life insurance is good for those who are at an advanced age and have health complications but desire final expense coverage.

What is the best life insurance for seniors?

It really depends on your situation, what you want coverage for, and your current financial standings. Most individuals buying life insurance at 50-60 for a temporary need will find term more affordable, but if you are not eligible for term or if you need lifetime coverage to cover end-of-life expenses, permanent/whole may be a better option.

Do remember that permanent life insurance is more expensive than term, and it will be even more expensive as you are at an advanced age and life policies are underwritten with age as the most prominent factor. Also note that whole life policies come with an investment/cash value component that can be accessed throughout your lifetime, either by you borrowing against that amount or withdrawing once you are eligible to do so.

Ask an Excalibur Assurance broker for their best advice on what makes the most sense for you, your age, and your financial goals/what you need to have coverage. We’re happy to help you select a plan that gives you the best peace of mind and helps you save on your life insurance.