It is a very common belief that life insurance companies will not cover individuals over a certain age, after all, as we extend into our golden years our eventual demise becomes only more certain. I have even heard people say, “After you hit 65, your risk of death is too great. Why would any insurance company provide life insurance for someone that old?”
Logically, this does make sense. In fact, years ago, it was a fairly accurate statement. Today with rapid advances in medicine and technology that have greatly extended our life expectancy, there are a lot more options available for someone seeking senior life insurance at relatively affordable rates. Can you get a less expensive policy at 25 versus 65? Absolutely. The important thing to note is that at 65, you are not out of options.
Most people understand that when a life insurance company is calculating what to charge you for a policy, they are really factoring in the likelihood of your death during the term of the policy. When you are young and healthy, you can expect to pay next to nothing for your premium. The older you get, your mortality rate increases, and the more expensive life insurance becomes.
Today, insurance companies pay closer attention to your health status than ever before. They will always pay attention to your age, but you can expect to pay significantly lower premiums by maintaining good health. Chronic diseases like type 2 diabetes and arthritis become more likely to afflict us as we age, but even these health problems do not make you uninsurable.
It is never too late to work on improving your health. Losing a few pounds at the gym can often cut 25-50% off of your life insurance premium. If you are a smoker, quitting is one of the best ways to save money on life insurance. These days with cigarettes becoming more and more expensive, it is a great way to save money, period! Your body mass index, or BMI, can play a role when determining your insurance rate. A good rule of thumb is to try to maintain a BMI under 25. WebMD has a pretty good BMI calculator you can use.
Life insurance rates are usually locked in for the life of the policy, so you want to start off in the best possible health. If you think your state of health today is going to put too much of a drain on your wallet when it comes to picking up a senior life insurance policy, spend a few months improving your diet and visiting the gym 3-4 days a week. Doing so, could save you thousands of dollars over the life of your insurance policy.
You are also going to want to look at term life insurance policies versus whole life insurance policies. Without going into the specific details, whole life insurance has an added investment component. Whole life policies are sometimes used in conjunction with a retirement savings strategy. As such, there is an added cost to these policies. A senior looking for life insurance, is not looking for retirement investments. Your policy is already going to be more expensive because of your age. Do not compound the cost by purchasing a whole life policy.
You are also going to want to make sure you purchase the right amount of coverage. As a senior, you are likely not raising a family anymore. You are not going to need the same amount of coverage you might have needed at 30 or 35. You might only need to cover some small debts and funeral arrangements.
There are many carriers that offer senior life insurance, so do not feel like you have to buy a policy from the first insurance company you talk to. Shop around a bit and see if you can get better rates. Even just a difference of $25 a month, over the course of a 20-year term, is going to save you $6000 if you live out the full term. The great thing about the age of the internet, is it is very easy to get multiple quotes at once to compare.