If you’re over 80 and you don’t have life insurance yet, now is the time to start thinking about it. Even if you are in good health, it’s important that you have coverage just in case of an accident. Life insurance will pay for funeral expenses and any other costs associated with your death, reducing the financial burden on your family. Funeral expenses can be well over $10,000, which is a huge cost for most families. However, it can be difficult to get life insurance for people over 80, as insurers do consider it more of a risk. Here’s what you need to know about getting life insurance when you’re over 80.
Burial Insurance Plans
Life insurance plans for older people are typically intended mainly to pay for funeral expenses. Insurers market these as burial insurance plans, and there are even companies that specialize in them. At this age, it’s unlikely that you have young children that need support, so the plan does not provide extra coverage for this. Looking for plans that are designed for this specific purpose will help you narrow down your options.
Another benefit of burial insurance plans is that they do not require a medical examination the way other policies do. At the age of 80, most people have developed medical conditions that would show up in an examination, and this could drive up the monthly premium dramatically. Burial insurance plans recognize that there isn’t a need for a medical examination in this case, although they typically will make you fill out a medical questionnaire. These policies have a list of pre-existing medical conditions that are completely exempt from additional fees. They typically have a flat rate benefit at around $25,000, although you may be able to find a burial insurance plan with a higher payout.
Single Premium Policy
If you don’t want to opt for a burial insurance policy, another option is to choose a single payment premium plan. In this situation, you will make one large lump sum payment, and then this will immediately start to accrue value over time. If you are healthy and still anticipate living several more years, a single premium policy may allow you to build up a larger policy than a burial insurance plan. However, it’s important to research these plans extensively to determine exactly how much value they can build. There are limits to how much you can contribute to these plans because otherwise, they can have tax consequences.
Graded Policy
A graded policy is similar to a single premium policy in that the value of the policy increases over time. However, if you pass before a certain milestone, usually three years after the premium was purchased, your family will only receive part of the benefit. This may not be the best option if you are ill, but if you expect to live a few more years, this policy will allow you to accrue some value over time.
Other Policies
If you are still healthy, you may benefit from a more comprehensive policy that does require a medical exam. This is because your health status could get you a lower rate and a higher benefit payout for your family. You likely won’t need a long-term insurance plan, so you can opt for a short 10-year policy with a lower cost. Life insurance companies offer the lowest rates to customers who do not have chronic conditions and who live a healthy lifestyle. Eating healthy, exercising regularly, and avoiding tobacco and other drugs are all easy things you can do to lower your premiums.
Medical exams can be time-consuming, and they can delay the finalization of your insurance policy. If you need insurance right away, you should avoid working with a life insurance policy that requires a medical exam. However, if you do have some time, the medical exam can be beneficial. If you are healthy, it will get you a lower rate on your policy. These exams are also very thorough and can give you some peace of mind if you haven’t been to the doctor in a while. Insurance companies will send your doctor’s office all of the results after the exam, so you can discuss them and address any problems that come up.
Shopping for an insurance policy past the age of 80 can be difficult, but it’s possible to find an affordable premium. It’s helpful to shop around and become familiar with all the options available to you before making a final decision. If you’re really struggling to find the right policy, talk to an independent insurance adviser. Many insurance companies don’t fully advertise all of their options for older customers, so it can help to have an expert guide you through the process.
