Many people in their 60s think that they either can’t get life insurance or that they no longer need it. Both of these assumptions are wrong. The reality is that life insurance is still a useful, necessary, and effective tool for people in their 60s, and it’s easier to get than you think.
Here we will discuss the different life insurance options available to people in their 60s and discuss the advantages of taking out a policy at this age. Read on to find out how life insurance can be a solution to many of your problems as you reach old age.
Life Insurance in Your 60s: Article Contents
Reaching your 60s is a time of change. Retirement is right around the corner, your income will change, your lifestyle will be transformed, and you may begin to feel the uncertainty that comes with reaching old age. Many people arrive at this stage in their lives with the peace of mind of knowing that they have a life insurance policy in place that will protect them and their loved ones if anything happens to them. But there are also many people out there who are entering into old age without a life insurance policy. It might be because they never took the time to purchase one, or because they weren’t able to when they were younger, and now, at the start of their 60s they might wonder if they can still get life insurance. And many people make the mistake of thinking that it’s too late. There is still time. Purchasing a life insurance policy in your 60s is a realistic, accessible, and necessary option.
At HolaDoctor, we advise you to purchase life insurance when you are still young. Most people begin to think of it when they reach their 30s, but it’s also a good idea to purchase one when you are studying or still very young. There are even policies for children.
So, if it’s best to purchase a plan when you’re young, what happens if you’ve already turned 60? As you are likely aware, many companies have an age limit for purchasing policies that ranges between 60 and 65 years, meaning that there are plans that are nearly out of your reach. However, there are many other options available. This means that it’s not too late.
Insurance companies offer solutions that are adapted to meet the needs of someone who is 60 or 65, and although these plans might not be so attractive for younger customers, they will allow you to purchase life insurance that gives you the protection you need for your loved ones as you begin the last stage of your life. In fact, there are also products out there for seniors. Insurance companies even accept customers that are 70, or even 80 years old.
Before you decide to purchase life insurance, the first thing to do is to decide what your needs are: what is the reason you are purchasing the policy? This is not an insignificant question, because by the age of 60 or 65, many people have less of a need for life insurance. Their financial situation is stable, they are enjoying or getting ready to enjoy a comfortable retirement, and their children are no longer dependents. So, why invest in life insurance instead of using the money for something else?
Read below to find out common reasons to purchase life insurance in your 60s.
Maintain income and standard of living. This is the most common reason to purchase life insurance at any age. If you are the one responsible for your family’s financial stability, even when you are collecting your retirement or pension, you will need to guarantee that they will be able to maintain the same standard of living without you.
Funeral expenses. Another common reason for purchasing life insurance is to cover expenses related to your death and funeral. In the United States funerals can be very expensive, making it a good idea to have an insurance policy in place to pay for these and ensure that your loved ones won’t have to cover them during such a difficult time. You can also purchase final expense insurance, but conventional life insurance can also help you meet this objective.
Covering expenses and taxes on your inheritance. If you are leaving an inheritance to your heirs, there is a good possibility that they will have to pay a considerable amount in taxes on it. Having a life insurance plan to help manage your inheritance can ensure that your heirs will receive the entire amount you left them.
Protect your business. If you have a small business and want it to keep going after your death, you can use life insurance to fortify and keep it operating after you are gone.
Leaving a charitable donation. Many people want to give part of their assets to charity after their death. Using the death benefit from the life insurance policy to help charities can be a good option.
Spending your savings in life. If you have savings and want to enjoy them while you are alive, you can purchase a life insurance plan to leave to a certain amount of money to them without this coming out of your savings.
Paying off debt. The worst thing you can do is leave your children and heirs with debt. Life insurance can allow them to pay these off, whether they are loans, mortgages, or another type of credit.
As collateral for loans. Older people have a hard time gaining access to credit and loans at banks. A life insurance policy naming the bank as beneficiary can be a way for you to access financial products that you would otherwise be denied.
As a solution to marital conflicts. You might need to purchase a life insurance policy as part of a divorce agreement. It is common for judges to require one of the parties in a divorce to purchase a life insurance plan to guarantee that the other party and their children will have economic support.
As you can see, there are many reasons to buy life insurance at 60 or older. You should think carefully about yours. And you should also consider the level of coverage you will need, because this will determine the amount of your premiums. If you don’t need to worry about taking care of your family after your death and you just need to pay for your burial, you won’t need very much coverage. On the other hand, if you still have a mortgage to pay off, or if you have children that depend on you, you will need more coverage that will guarantee a higher death benefit. Once you’ve decided how much coverage you need and why, next you will need to decide what type of policy you want.
When deciding what type of policy is best for your when you are already over 60, your options are more limited. However, you can still choose from one of two main types of life insurance: temporary or permanent.
Temporary insurance for people over 60. Term or temporary life insurance is purchased for a specific period of time. These polices are cheaper and the underwriting process is simpler. On the other hand, the death benefit your beneficiaries will receive is usually less, it doesn’t accumulate cash value and no death benefit is delivered if the person outlives the term of the policy.
Many experts believe that temporary insurance is the best option for people over 60. However, at this age it is rare for insurance companies to offer 30-year policies. In general, the longest term you can get for most policies up to age 65 is 25 years. Once you are over the age of 65, you can only get a term policy for a maximum of 20 years. The problem is that if you purchase a temporary policy for 20 years when you are 67, for example, you will lose this protection at the age of 87. Then you will have to renew your policy at a very old age, which will surely be very expensive. This might be a good reason to choose a shorter term, of 5 years, for example.
Permanent insurance after 60. Temporary life insurance is a good option to obtain reasonable coverage at an affordable cost. But if you need more comprehensive coverage, the best thing to do is to purchase permanent life insurance. This means that your policy will remain in effect up to your death and the company guarantees that your beneficiaries will receive a death benefit. There are several types of permanent life insurance policies: traditional or ordinary life insurance, universal life insurance, variable life insurance and variable universal life insurance. However, at the age of 60 or older, many experts recommend a variant of universal insurance known as guaranteed universal life insurance. This type of policy is a combination between temporary and permanent life insurance. Rather than purchasing a policy for a specific period of time, you purchase it up to a certain age. This means that, as long as you pay your premiums, the policy will remain in effect until the policy-holder turns the age outlined in the policy, and there are policies available that provide coverage up to 121 years of age.
In addition, this type of plan offers the ability to access temporary insurance by going through a simplified and less demanding underwriting process. It also offers the ability to add a clause allowing you to use part of the death benefit in advance to cover medical expenses.
In exchange, it does not accumulate cash value that is available to the insured and all of the money is allocated to the possible death benefit.
If you already know which type of policy is best for you, you can start the process of purchasing a policy by requesting quotes. Then you can purchase a policy and move into the last stage of your life with peace of mind. Life insurance at 60 can offer the perfect solution to start out your golden years on the right foot.