never too late to purchase term life
insurance (unless it is!). The
fact that you're searching for term life
online now means we're still early
enough even if you are searching life
insurance for seniors and the elderly. There are
some key concerns to address when
purchasing term life for seniors.
Let's start with what we mean by
term "Senior" or elderly has been greatly expanded
in meaning over the last few decades.
Traditionally, senior status was tied to
Medicare eligibility which as been age
65. There has been a slow bleeding
of the term downward to where age 55 may
in fact be thought of senior (please
forgive us in advance to any 55 year
olds!). Most people have a
general idea that life insurance rates
are tied to age so what if you find
yourself needing life coverage as
There are two main concerns for seniors
purchasing life. The first is
eligibility and the second is price.
Let's start with the first. Life
insurance eligibility can be translated
loosely as health status and history
plus a few key lifestyle choices.
On average, health care costs double
with each decades of a person's life.
Many issues that drive this health care
cost increase also affect mortality
which is the key concern to a life
insurance underwriter. Many
illnesses become more likely as we age
such as diabetes and cardiovascular
disease. If you are a healthy
senior, than this is not an issue.
The life insurance company will not
discriminate against a person just for
being older. If you are a health
senior, there is no reason you can't
qualify for the best tier. The
life insurance rate is where age is
reflected. If you have health
issues, which is much more common for
seniors, there are some options we can
investigate. We have new
hybrid term life insurance plans and
non-medical life insurance options
available. So essentially, if you
are healthy, you can run your
instant term life quote. If
you have significant health issues, non
medical life insurance may be the best
option and provide at least a certain
amount of life insurance coverage,
albeit it, at a higher price. In
between these two options, is the hybrid
plan. This is an interesting twist
that's new to the life insurance market
for the elderly where you can secure a
limited amount of life insurance
(typically Accidental) with the option
to take a medical exam in 6 months to
expand this to full coverage. This
is a great option that walks to middle
of the line and is a great to lock in
fast, coverage now with the possibility
to expand. We would be happy to
walk through your situation to see what
might be the best option.
Now let's look at cost. The
driving factors that make term life
insurance more advantageous to whole
life are even more powerful for seniors
or the elderly.
The cost of life insurance is tied to
age. The difference in cost for a
base amount of term life coverage
between a 55 year old and 65 year is
significant. If whole life
insurance can be 10 times more expensive
for the same amount of coverage, it
quickly becomes a questions of affording
enough coverage to actually address your
needs. Without a doubt, you will
find life insurance brokers who try to
sell you expensive whole life on the
premise that there is a guaranteed
benefit for your dependents when you
pass away but quickly look at the
difference in cost you will pay for that
"guarantee" in your annual premium over
one year not to mention 10 years.
Let's say you're looking at 10 years of
term life. The whole life "
guarantee" for seniors only matters in
year 11 and beyond. That means you
have to look at 10 times the annual
difference in premium plus whatever
investment that would make on a
compounded basis during that time.
We've dealt extensively on this site
with how to view the term versus whole
life decision and the only difference
for seniors who need life insurance is
that the numbers have risen several fold
due to age.
Tying into our first question of
eligibility above, your health status
can affect the rate available.
Based on our experience, the hybrid
option from RBC may "quote" higher than
the standard term life insurance options
but we have found that with health
issues, the standard term life carriers
will likely apply a higher tier.
If you have some health issues as a
senior, we may end up getting a better
rate through the RBC hybrid term life.
There are many options available to
seniors or the elderly for term life. We would be
happy to help you with your situation
and we'll try to bring our experience to
bear so you can get the best life
insurance coverage as a senior.