Is There Life Insurance for the Elderly?

Is there life insurance for the elderly? The answer is yes, there is. But it can be advantageous to purchase this life insurance when you are young.

You see, when most people are young they don’t want to think about their own demise and death. They are very busy accumulating wealth, starting families, having good times, and feeling fully alive since they (probably) won’t die for decades to come yet. But, as tragic as this is, aging and dying are inevitable. The day will come when you are old, and your death is much closer. You might have developed health problems from the stresses and strains of living or from age-related causes. And the problem for you then will be that you could find it very difficult to get underwritten for life insurance.

Life insurance underwritable face amounts and premiums are very, very much based on age and health status at the time of application. The less the probability that you’re going to die any time in the near future, the lower your premiums and, in many cases, the more death benefit will be permitted to have. So, if you buy a life insurance policy with a face value of half a million dollars when you are 25 and going running and lifting kettlebells five days a week, you will pay a far, far less amount of premium than you will trying to buy that same amount when you’re 55, especially if you’ve also got health problems that have onset then. There’s also a chance that you won’t qualify for the half million face amount that you desire.

There’s another advantage here to buying young: if you choose a permanent policy like a Variable Universal Life plan, you can accumulate a great deal of money on a tax-sheltered basis. Indeed, many financial planners are using VUL as a core part of their clients’ retirement planning these days because the tax advantages are just too great to pass up. Not only will your life insurance premiums be substantially lower, you will have far more time to put in money into the investment portion and let it accumulate into a fortune. Just as with the insurance itself, when it comes to investing, truly, time is money.

But let’s say you never did any of that, and your question of is there life insurance for the elderly is much more urgent and immediate in meaning. The answer is still “yes”, but you will have to take reduced benefits.

Different life insurance companies have different underwriting standards here, but essentially all of the important ones do have policies tailored to the elderly. They will put a cap on how old you are allowed to be to qualify, but this could be anywhere from 70 to 85 depending on the company. There will also be strict caps on how much face value you can qualify for–typically no more than $25,000 and often even less. And, these elderly life insurance policies are usually “guaranteed acceptance”, meaning there’s no medical exam to qualify. They may also restrict the pay-out so that, for instance, you start paying for the insurance now but they won’t pay a death benefit if you die within the next 24 or 36 months (they will refund all of your premiums and usually with interest, in place of the death benefit). You pay for all this however: the premiums on these policies are very expensive for what you get. But it is a way of making sure you have life insurance coverage.

So, the question “is there life insurance for the elderly?” should be asked when you’re young–not when you’re elderly.

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