What to Look for in Life Insurance Over 65

Summary: Life insurance isn’t only for the young. For those over 65, it can provide a safety net, a legacy, or help ensure loved ones aren’t burdened with expenses. Rising premiums and various options can feel overwhelming. However, life insurance offers some peace of mind by providing financial security. Let’s explore how you can find coverage that fits your unique needs and budget.

In this article:

As you reach 65 and beyond, it becomes important to evaluate your life insurance. Your needs at this stage are likely very different from when you first bought a policy. Health conditions, financial obligations and retirement goals all play a role in shaping the kind of coverage that will best serve you now.

It’s important to focus on finding a policy that protects your loved ones and offers some peace of mind in your later years as costs rise with age. This article will guide you through the key factors to consider when choosing life insurance over 65.

Duration of policy and duration of benefits

The duration of your policy and your benefits are key factors to look at when choosing your coverage. There are a few options:

Term life insurance over 65

Individuals up to age 70 can often qualify for term life insurance policies with durations of 10, 15, 20, or even 30 years, providing flexibility to meet a range of coverage needs. These policies are an excellent option for temporary financial protection.

When evaluating a term life policy, it’s crucial to consider your health, family history, and the timeline of your financial obligations. A 20-year term might be popular, but shorter or longer durations could better align with your specific goals. Choosing a policy with an appropriate term ensures your coverage lasts as long as you need it without leaving gaps or requiring additional coverage later.

Whole life insurance over 65

A second option is to choose a permanent life policy. Eligibility for these policies begins at age 45 (or 50 in New York), offering a lifetime of coverage. If you already have a term life policy, you may have the option to convert it to a permanent policy. To learn more about your options, call your agent and explore what’s available for your specific needs!

A permanent policy – like universal or whole life insurance – is a type of coverage that builds cash value over time. This type of coverage could deliver the benefits to your loved ones, or the cash value could serve as additional income for you at a later date. While choosing a whole life insurance policy at age 65 may have higher premiums, it would eliminate the risk of outliving your policy.

Term life insurance vs. permanent life insurance: What’s best for seniors?

Key considerations

Term life insurance:

Permanent life insurance:

Life insurance rates for seniors: What to expect

As you approach retirement age, understanding life insurance rates becomes crucial to selecting the right policy. Several factors influence these rates and knowing what to expect can help you make informed decisions.

Key factors influencing life insurance rates for seniors

• Age: The older you are, the higher your premiums. Life insurance rates increase significantly once you turn 60 and even more so after age 70. This is because the risk to the insurer rises as you age, making it more likely that the company will have to pay out a death benefit sooner. Consequently, to offset the increased risk, premiums are adjusted to reflect the likelihood of a claim being filed.
• Health: Your health status plays a major role. Policies that require a medical exam (sometimes referred to as underwriting) typically offer lower rates for those in good health. Alternatively, guaranteed issue life insurance doesn’t require a medical exam but often has higher premiums.
• Coverage amount: Higher coverage generally results in higher premiums, with options ranging from smaller burial insurance policies to larger-term life policies.
• Type of life insurance:
• Term life insurance Term life insurance is more affordable but only provides coverage for a set number of years. Premiums remain level during the term but increase if you renew.
• Permanent life insurance: Typically has higher premiums but offers lifelong coverage and builds cash value over time. Examples of permanent life insurance include whole life insurance and universal life insurance. Both options provide long-term protection and offer the potential for cash value accumulation.

Peace of mind vs. cost

It’s true that life insurance premiums get more expensive as you age. But what price can you put on peace of mind? Term and whole life insurance benefits can provide for your loved ones long after you pass.

Additionally, a permanent life insurance policy provides cash value that grows over time, helping to diversify your investment portfolio. This policy would remain stable even if something happened to other investments. Plus, you and your loved ones would have the cash value to fall back on in the event of an emergency.

Additional coverage needs

If you already have a life insurance policy, it's important to assess whether it provides adequate coverage for your current circumstances. Life insurance benefits can help cover various expenses, such as mortgage payments, medical bills, and final expenses. This alleviates financial burdens on your loved ones if you pass away. With the right policy, these benefits can provide peace of mind and ensure that your family has the support they need during a difficult time.

While it's ideal to secure life insurance earlier in life, obtaining a policy at or over the age of 65 can still be a sound financial decision. To choose the right benefits for your unique needs, consider the following:

• Evaluate your existing coverage: Determine if your current policy sufficiently covers your obligations, such as outstanding debts or anticipated end-of-life expenses.
• Consider the graded death benefit: Some policies feature a graded death benefit, which may be beneficial for seniors. Here’s how it works:
• First two years: If you pass away from natural causes during this period, your beneficiaries receive all premiums paid plus an additional 10%.
• After two years: Full benefits are paid for death due to any cause.
• Accidental death: Coverage is effective immediately, meaning your beneficiaries will receive the full death benefit from day one if the insured dies accidentally, regardless of any other health conditions.

Important exclusions

It's just as important to be aware of what is not covered. Most life insurance policies have a suicide exclusion clause. If the insured dies by suicide within a specified period—usually the first two years—the death benefit is typically not paid. However, premium payments made during this period are generally refunded to the beneficiaries. This time frame can vary by state and policy, so it’s important to check the specific terms of the life insurance contract.

Frequently asked questions (FAQs)

Is it worth buying life insurance after 65?

Yes, life insurance can still be beneficial at this age. It can help cover final expenses and debts and provide financial support to loved ones after you're gone.

How much life insurance should a 65-year-old have?

The amount varies based on individual circumstances, but many experts recommend having enough to cover final expenses, outstanding debts and additional financial needs for beneficiaries.

What kind of life insurance is best for seniors?

Whole life insurance is often the best option for seniors. It provides lifelong coverage and builds cash value over time, offering both protection and a financial asset. Term life insurance may be suitable for short-term needs, but for long-term security and legacy planning, whole life is typically the better choice.

What kind of life insurance options are there for seniors?

Consider life insurance, health insurance and long-term care insurance. These can help ensure you and your loved ones are financially secure as you age.

United of Omaha Life Insurance Company is licensed nationwide except in New York. United of Omaha Life Insurance Company is solely responsible for its contractual obligations. United of Omaha Life Insurance Company, 3300 Mutual of Omaha Plaza, Omaha, NE 68175.
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