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How to Evaluate Life Insurance Needs in Your 60s and 70s

by BlogLife insuranceWealth

The older we get, the more acutely aware we become of human mortality. And as we age, we often think more often of how we can help protect our family members in the case of an untimely death. Life insurance is different from other types of insurance — such as car insurance and health insurance — in that you most likely hope your family will never have to make use of it. However, since death is an inevitable part of life, chances are, your policy will not be purchased in vain.

According to a report published by Atidot — an insurance technology company providing AI, big data and predictive analytics tools for the life insurance industry — many people with life insurance policies are actually underinsured, with only about 30 percent of total coverage needs being met, leaving approximately 70 percent of unmet potential coverage.1Additionally, LIMRA’s 2018 Insurance Barometer Study found that about one in five people who have life insurance say they do not have enough.2 If you’re in your 60s or 70s, there are a variety of things to consider when evaluating your life insurance needs.

Am I Too Old for Life Insurance?

From mortgages to home repairs, there are many expenses your spouse could incur in the event of your passing. By purchasing a life insurance policy, you’re providing both you and your family with peace of mind knowing that these expenses will not lead to the loss of a house or more. A common belief about life insurance is that it’s expensive, especially if purchased later in life. However, as you get into your 60s and 70s, you may not need as substantial a policy, since your spouse may also not have as many years of living left to cover financially.

When considering whether or not you should get life insurance, it’s important to evaluate how many people rely on you for financial support, as well as how much that support entails. If your spouse doesn’t work or only works part-time, then they will most likely require additional income in the event of your passing. In a case like this, getting a life insurance policy is highly recommended if you want to make sure your partner is protected from excessive financial stress after you’re gone.

For people with estates very large estates, it’s often recommended to get permanent life insurance to minimize your estate taxes. Other people choose to fund their retirement with the cash value of their permanent life insurance. If this is your plan, then you’ll, of course, want to purchase a policy.

Life Insurance and Your Health Status

Typically, the older you are, the more expensive your life insurance quote is going to be. This is in part due to the fact that the older you are, the more health problems you could have. In some cases, you may be better off investing your money instead. If you’re in good health, it may make more sense for you to get a shorter term policy. For those with health problems, you may want to consider getting guaranteed issue life insurance, which anyone can get regardless of any health issues they may have.

Renewing and Extending Your Life Insurance Policy

While you may have bought a policy years ago, if you have a term policy, you may want to consider extending your coverage if you are aren’t able to cover retirement costs with pensions and savings. You can do this by either renewing your current policy or converting it to whole life insurance. If you choose to renew, it’s important to note that your premium could increase, and some companies may not even allow you to renew depending on how old you are.

What to Do Next

Regardless of your age, it’s always recommended to consult with a financial professional who can evaluate your individual situation and needs to determine whether or not life insurance makes sense for you. If a policy is recommended, they can help make sure you choose the type of life insurance that offers the most benefits for both you and your family.

  1. https://www.atidot.com/under-insurance-report-2018
  2. https://www.limra.com/barometer/
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
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Insurance Coverage and the Coronavirus

by BlogCoronaInsuranceLife insuranceUncategorizedWealth

The coronavirus pandemic has caused many people to re-assess their need for life insurance, along with other types of insurance such as long term care insurance and the adequacy of their health insurance.

Life insurance ensures surviving family members are provided for financially after someone’s death. There have been some changes in the application process for life insurance policies, and the good news is it’s still possible to get a policy.

In some ways it may actually be an easier process. According to Bankrate, “Because many people (and insurance companies) are honoring the CDC’s social distancing guidelines, in-person blood or urine tests and weigh-ins aren’t possible now. That means insurance companies currently have fewer potential reasons to reject applicants for coverage.”

“To make it easier for consumers to apply for a policy under these unusual circumstances, more than a quarter of U.S. life insurers have expanded their automated underwriting practices,” says Catherine Theroux, director of public relations for LIMRA. “One in 5 U.S. companies have postponed or waived paramedical requirements.”

Folks applying for life insurance however, are still required to provide a complete health history, allowing the company to analyze the insurability of the individual.

Some insurance companies are changing their offerings and limiting their coverage options based on age or the term of the coverage sought. For example, Mutual of Omaha Insurance and Penn Mutual Life Insurance have temporarily suspended applications for individuals aged 70 or older. Some other insurers are also temporarily suspending life policy applications for people in their 60s who might previously have been approved for coverage despite health issues like diabetes and asthma.

We believe that now is actually a good time to apply for life insurance, because it might possibly be the easiest process from an underwriting standpoint. If you believe a life insurance policy will protect you and your family, there really isn’t any reason not to apply now. Our insurance experts can help find the company that best meets your needs.

What about an existing policy and coronavirus coverage?

For the most part, existing policies will cover a person if they were to die from COVID-19. As long as your policy is in good standing, it will provide a death benefit to your beneficiaries. Just be sure not to let your current policy lapse. However, here’s a few exceptions to keep in mind:

  • The life insurance industry has something called a “contestability period,” a window of one or two years during which an insurer can investigate and deny claims. If it’s determined that the insured lied on their application or otherwise misled the insurer to defraud them, coverage — in the case of life insurance, the death benefit paid to the family — may be denied.
  • Another exception to a payout due to the coronavirus is for those who have purchased an accidental death policy. Those policies generally don’t cover death by disease. There are some exceptions, though, like if an injury causes someone to be hospitalized and the disease results directly from that hospitalization. It’s wise to discuss the specifics with your insurance agent.

If you’ve been honest on your application and current on your premium payments, you shouldn’t have any worries.

If you’d like to read more FAQs about life insurance, long term care insurance, healthcare or more, check out this article from AARP.

If you’d like to chat with a life insurance expert to analyze your life insurance (or long term care insurance) needs, talk to a RetireMentor to discuss your specific needs.