The major difference between a term life insurance policy and whole life policy is that the former remains in force only until the term expires, whereas, the latter covers the insured to death, irrespective of the age. However, in both the cases the real issue is the maximum age at which the companies are willing to offer life insurance policies. As a thumb rule very few insurance companies are willing to offer insurance policy past the age of 85, whereas, some set the maximum age as low as 75. So if you are over 70, and want an insurance policy, then it is very important to do proper research about buying life insurance for seniors over 70. Getting information from trusted source is important because the policy offerings change from company to company and companies’ offerings change from state to state. So, it is important to contact someone who works with a large number of companies across the United States to find the best policy.
Do You Really Need Life Insurance Past 70?
The essence of life insurance is usually to replace the income of a breadwinner or in other cases to replace the income equivalent of a homemaker. Other important reasons for a life insurance is to meet critical expenses such as college fund for children/grand children or mortgage repayment; which under normal scenario would have been met by the income of the insured’s. Usually every financial planner or insurance agent would recommend their clients in their 30s and 40s to opt for an insurance policy valued usually at 10 times their annual income. The monthly premiums is also less the earlier you buy a policy. Until a few decades back, the importance of the insured’s income for the family declines as they aged, as all the major expenses are met by the time they retired. Therefore, life insurance beyond 70 was not really popular among senior citizens. However, things have changed a great deal in the last couple of decades, with a rapidly increasing life expectancy the need for insurance among people over 70 is growing rapidly. The need to compensate those retirement plans that don’t provide for survivor’s benefits and the financial needs of families that face burial and end-of-life expenses makes it important to opt for a life insurance past 70.
Term life insurance is one of the most convenient policies with a relatively lower premiums per thousand dollars of coverage. This is usually for a specific timeframe like 5, 10 or 20 years. It often requires completing a health questionnaire and providing blood and urine samples. There will usually be no changes in the premium rates throughout policy tenure. While some policies will let you renew at the end of tenure, others require proof of insurability and maximum age limit.
Whole Life Insurance
Whole life insurance, covers the policyholders for life, but is often subject to the insurance company’s rules. To determine the insurability one should undergo a medical eligibility test, and have blood and urine samples drawn. The policy will develop a cash value, however, the appreciation is pretty slow.
Discuss with a good insurance agent to find out which policy is ideal for your age and means.