Jason Fisher When you start to consider purchasing life insurance for seniors over 70 you may be met with many confusing options. Life insurance agents have a way with complicating the purchase, when in actuality life insurance can actually be made simple. Considering life insurance at this age used to be unheard of, but now its financial planning importance has started to become more important to most families.
Many people who are considering a life insurance for seniors over 70 policy may even be purchasing their first policy, while others are adding to additional coverage. After speaking with most families in this age range they are very shocked to hear just how affordable a life insurance policy can be when when you go about it right.
The Demand For Life Insurance For Seniors Over 70
The reason many people do not purchase life insurance in their 70’s is because they don’t realize they can qualify for it. However, once they speak with someone who lets them know this is a real option, they can begin to see the many uses of a life insurance for seniors over 70 policy.
The emergence of people requesting life insurance over 70 really boils down to the increase in life expectancy throughout history. Now people are living longer due to better medical technology, health knowledge, and better lifestyle choices being made.
According to life expectancy statistics, the average American male will have a life expectancy is 76 years old, and for an American female the life expectancy is 81 years of age. With half of the population living past those years, it is pretty self explanatory why someone would be considering life insurance over 70.
Once you reach 70, your life insurance needs do not always cease, and at times may actually increase. In the past, most people did not even consider life insurance after the kids were on their own, and certainly not into retirement years. Now retirement is lasting 20-30 years, and people are taking on larger financial obligations well into retirement. Since people are now living well past 70 years of age, insurance companies have been able to make products more readily available and bring the price of life insurance for seniors over 70 down to a more affordable rate.
The increased rate of people requesting life insurance for seniors over 70 comes down to people living longer now than any other time in history. This is due to many different factors such as healthier foods, exercise, medicine, and of course medical technology. The average life expectancy is stretching into the 80’s meaning most people will still be alive well into their 70’s.
Why Own Coverage Past 70
The reasons for purchasing life insurance for seniors over 70 are very different, but some common trends start to emerge in this market. Anytime you start to think about life insurance, your mind probably associates with final expenses such as a funeral or cremation. This is the most common reason why people purchase life insurance for seniors over 70. Even more common is the children of their grown parents who are taking these policies out.
Since we have now determined people are living longer, we can now explore what someone would use life insurance for over 70. The most common uses for life insurance over 70 we encounter include:
- Mortgage Protection
- Retirement Planning
- Legacy Planning
- Final Expenses
Mortgage Protection
Every financial guru will advise you to not carry a mortgage into your retirement years. However, not everyone has a perfect financial plan and often times still have a mortgage for either their primary home or a secondary property. If a loved one is relying on you to finance the mortgage, or you would like to pass the property on to someone debt free than life insurance is a great tool to provide mortgage protection. Upon your passing the life insurance proceeds can be used to continue paying the mortgage, or to completely pay off the mortgage.
Retirement Planning
Unfortunately, the day some people retire is the first day they realize they are losing many of their benefits which they had through work. Workplace life insurance is generally not portable, which is why we always suggest owning a policy outside of work. This comes as a big shock, and many times life insurance is the first benefit to be cut. This is a big problem if you still have a need for life insurance. This is why many people are still searching for life insurance over 70, to fill the void which now exists because of retirement.
Legacy Planning
Life insurance is one of the most powerful tools when it comes to legacy planning. Life insurance allows you to take your current dollars, and leverage them to create a sizable death benefit which generally passes on to your beneficiaries on a tax free basis. This is an effective tool if you have money sitting on the side which you have already earmarked for inheritance purposes.
If you do have a sizable estate, life insurance can also be used to help lower the tax burden to those receiving an inheritance. We would be happy to assist you with any legacy planning, and it is best to also work with an attorney or legal professional as well before entering any of these types of contracts. An accountant may also be necessary for this planning process.
Final Expenses
The most common reason we are approached by people looking for life insurance over 70 is for final expenses. This could include burial, cremation, and medical expenses. Life insurance is important because most people don’t have enough money saved up to pass over to a funeral home in the event of a loved one’s death. Life insurance is a responsible decision which helps to ensure you will not leave a financial burden to those you love the most.
Grown children begin to realize when their parent passes away they will most likely be met with the financial part of burying their parent. This is a very morbid subject, but it is a smart thing to plan this part of your finances. Most people do not have enough money sitting in the bank which would be used for funeral expenses, and it sometimes ends up putting people in debt, which is truly tragic.
What Options Are Available For Seniors Over 70
In your 70’s you still have plenty of life insurance options available such as:
- 10-15 year Term Life Insurance
- Universal Life Insurance
- Whole Life Insurance
We would most likely use term life insurance for someone who has a temporary life insurance need such as to cover a mortgage, business, or any other debts which can be paid off in a certain period of time.
The second, and most popular option for over 70 life insurance, is guaranteed universal life insurance. Guaranteed Universal Life (GUL) Insurance will provide life insurance protection for your life regardless of age, and will keep your premium the same for the rest of your life. As long as you pay your “locked in” premium you will keep your life insurance in force for as long as you live. These types of plans are best for final needs, or anything else which you would wanted covered for the rest of your life.
Whole Life Insurance works similar to GUL meaning it keeps your premium level throughout the policy, but does normally cost more than GUL because it does contain cash value in the policy, and can have a feature which also allows the death benefit to grow throughout the life of the insurance policy.
Getting Started
When you are ready to get started evaluating which type of life insurance may be right for you, then we are here to help. Our blog is a great resource to help you decide which policy is right for. Once you have decided on an amount and type of policy, you can head over to online life insurance quoting tool. You can evaluate both permanent and term life insurance policies.
To get a more personalized life insurance plan please reach out to us directly to speak with an experienced life insurance agent.
