When Life Insurance for Seniors Makes Sense

Insurance, Life Insurance
too old to buy life insurance

People who buy life insurance are generally looking to cover the years when their families depend on them for financial support. That often means shopping for life insurance when you get married or have children, milestones that typically occur in your 20s, 30s and 40s.

But sometimes, certain types of life insurance make sense for seniors in their 60s, 70s and even older, typically when they have younger dependents.

For most people, term life is the best option. You select the term length and the policy pays a death benefit to your beneficiary if you die during the term. For example, you would buy term life to cover income replacement during your working years or for the years spanning mortgage payments.

Some people are simply too old to get term life insurance quotes, but the age limit for senior life insurance might be higher than you think.

Age cutoffs vary by company, term length and policy type, but common cutoffs are:

  • Age 80 for a 10-year term
  • Age 75 for a 15-year term
  • Age 70 for a 20-year term
  • Age 55 for a 25-year term
  • Age 55 for a 30-year term

A typical age cutoff for permanent life insurance, a more expensive form of insurance that covers you for the rest of your life, is 75 or 80. Some companies offer “final expense” insurance to consumers as old as 85, but the benefit is generally limited to $40,000 or less and may not pay off at all if the insured dies in the first two years.

Applying for term life insurance at older ages

Of course, life insurance gets more expensive as you get older, because actuarial tables show that you are more likely to die.

» COMPARE: NerdWallet’s life insurance comparison tool

And even if you’re not too old to buy life insurance, once you’re past age 50, you’ll likely find  more gauntlets to run during the application process. You may be required to do more medical tests, for example, especially if you’re applying for a high coverage amount.

Here are some examples:

MetLife policies for $250,000 to $2,500,000: Up through age 50, MetLife requires a paramedical exam with blood and urine tests. For ages 51 and above, MetLife adds a requirement for an electrocardiogram test.

New York Life policies for $250,001 to $500,000: For ages 40 to 59, New York Life requires a paramedical exam with blood and urine tests. For ages 60 to 69 they add an electrocardiogram test. And for ages 70 and older, they also require a cognitive and physical function test.

Prudential policies for $250,000 to $499,999: Applicants ages 41 to 50 will need a paramedical exam with blood and urine tests. Ages 51 and higher will also need an electrocardiogram. And when you hit age 71, Prudential also wants a cognitive test and will check prescription drug databases for medicines you take.

Term life insurance prices at older ages

Procrastinating on a purchase of term life insurance can be costly. We looked at the lowest average rates for buyers of various ages.

  • If you are age 40 and wait a decade to buy, your rates will easily double.
  • Waiting to buy until after age 60 is particularly pricey. Between ages 60 and 70, rates can triple for men, and are close to tripling for women.
Lowest average annual rates for a $500,000, 10-year term life insurance policy for healthy, nonsmoking individuals
Age 40 Age 50 Age 60 Age 70
Men $242 $547 $1,476 $4,523
Women $211 $449 $986 $2,807
Methodology: NerdWallet averaged the lowest three rates found for each age. Rates are as of July 2015. Your own rates will reflect your age, gender, health and other risk factors.

Life insurance rates vary widely by insurance company, so no matter your age, you should get quotes from several insurers for the same amount and type of coverage. NerdWallet’s life insurance comparison tool can help you get started.

Barbara Marquand is a staff writer at NerdWallet, a personal finance website. Email: bmarquand@nerdwallet.com. Twitter: @barbaramarquand.


Image via iStock.