Although most people who are age 60 and over may not have young children who are depending on their income for survival, there are still many reasons why someone who is in this age category may still need to carry life insurance.
In fact, when considering one’s overall financial plan, life insurance is oftentimes used as a tool for both protecting and enhancing asset protection and the wellbeing of loved ones in a number of different ways.
Why People Over Age 60 Need Life Insurance
Just some of the many reasons why people over 60 need life insurance include:
- Replacement of Retirement Income – One of the most important reasons that people who are over 60 carry life insurance is for the replacement of retirement income. Oftentimes, for example, the pension income of an individual may end or become greatly reduced upon their death. This could leave their spouse nearly destitute and having to change his or her lifestyle almost overnight. The proceeds from a life insurance policy, however, can help to alleviate this issue.
- Payment of Estate Taxes – Life insurance for people over 60 is also often used for the payment of estate taxes. There are many families that are faced with a substantial estate tax bill upon the death of a loved one. Rather than using savings or assets from the estate to pay this large bill, proceeds from a life insurance policy can instead be used.
- Final Expenses – Today, with the cost of the average funeral being in excess of $10,000, life insurance is often purchased for the purpose of paying final expenses as well. This can help families to avoid using savings or credit to pay these high costs.
- Protection of a Special Needs Loved One – Some individuals or couples may have a special needs adult child who will need care upon the death of the parent or parents. Knowing that there are funds from a life insurance policy available can help provide peace of mind in that the child will be taken care of – even after the parents are no longer able to do so.
- Charitable Contribution – Many people over 60 wish to make charitable contributions through life insurance as well. Funds from a policy can allow people to contribute a great deal more than just direct cash contributions.
- Business Continuation – Those over age 60 may also own a business that they wish to continue even after their death. Proceeds from a life insurance policy can help to ensure that the company can go on while a suitable replacement is being sought after the owner has passed away.
Applying for Coverage
When applying for coverage on life insurance for people over 60, the insurance underwriters will want to know certain information about the individual. This is because the life insurance company does not want to take on an applicant for coverage that will pose too much of a risk of filing for a claim.
On the application for coverage, basic information will be asked for, such as:
- Height, in relation to weight
- Smoking status / tobacco usage
- Alcohol usage
- Health condition
- Family health history
- Occupation and income (if applicable)
The underwriters will also want to know if there is any other life insurance coverage that is currently in force. This is because having too much life insurance can actually be considered a negative factor.
In addition, it is likely that the applicant will be required to take a medical exam. This typically consists of submitting a blood and urine sample. These samples are reviewed by the insurance company for certain health conditions that may pose risks to the insurer. The insurer may also require medical records from the applicant’s physician for review as well. Once all of the information has been submitted and reviewed, the life insurance underwriters will be better able to make a determination regarding approval for coverage.
How Much Will Coverage Cost?
The cost of coverage on life insurance for people over 60 will vary, depending on the way that the insurance policy is rated. Although it varies from one insurer to another, most insurance companies will typically have three primary categories of policy classes. These include:
- Standard - With a Standard rating, the insured is rated as essentially having average health, with no major health issues in his or her family health history as well. Therefore, the premium for their coverage will also be average, or in the range of other average policy holders in that same class of insureds.
- Substandard - If a policy holder has certain health issues that may pose more of a risk to the insurance company, they may be rated as a Substandard. In this category, the premium charged for coverage will be higher than average.
- Preferred – Should an individual be found to be in excellent health, they could be rated as a Preferred. Here, they will actually pay less in premium.
Taking the Next Step
For those who are seeking life insurance over the age of 60, it is always best to compare premiums from several top rated carriers prior to making a decision on coverage. This way, it will be easier to determine the amount of coverage that can be obtained for your budget.
At LifeInsuranceforSeniors360.com can help you in finding the life insurance coverage that you need. In order to start comparing life insurance policy premiums, simply using the form on this page. Should you have any additional questions about life insurance for people over 60 – over even about life insurance in general – we’re here to help. Please feel free to contact us at 888-229-7522 and we will respond to your question or concern quickly so that you can be on your way to obtaining the coverage, and the peace of mind, that you deserve.