Life insurance for seniors: your options at 60, 70 and 80

What changes when you buy life insurance after 60

Generally, the insurer sets the premium based on your age and health when you apply. The NAIC guide puts it this way: if you are older or your health has changed, premiums for a new policy will often be higher, and if you are not insurable you will not be able to buy one. That is why the sooner you review your options, the more choices there usually are.

The purpose changes too. At 40, life insurance usually replaces income while the kids grow up; after 60, many families use it to pay for the funeral, medical bills, the remaining mortgage, or to leave something to children or grandchildren.

Your options by age

These are the most common types of coverage for older adults:

• Term insurance: covers a fixed period. According to the Texas Department of Insurance, most companies offer it only up to a certain age, usually 70 or 80. If you already have it, the premium goes up when you renew because it is based on your age at that time.
• Converting your current term policy: if your term policy allows it, you can switch to permanent coverage without a medical exam or health questions, but Texas notes that companies usually allow conversion only for a time, typically until you turn 65. Check your policy before that deadline passes.
• Final expense whole life: a small permanent policy designed for the funeral and the expenses a person leaves behind. According to the Florida guide, whole life has a fixed premium and coverage for life as long as the policy remains active.
• Simplified issue: generally no medical exam, but there are health questions. Depending on your answers and each insurer’s rules, coverage can be full from day one.
• Guaranteed issue: no health questions. In exchange, it generally has a graded benefit. According to the Florida guide, a graded death benefit policy, often sold as guaranteed issue, pays the full amount for accidental death but a much smaller amount for other causes during the first few years.

What the insurer looks at to approve you

It depends on the type of policy. Simplified issue policies generally ask about your health, such as diagnoses, treatments and hospital stays. Based on your answers, each insurer decides whether to offer you full coverage, another option (such as one with a graded benefit) or none. Guaranteed issue has no health questions.

Always answer truthfully. The Texas Department of Insurance explains that life insurance policies have a two-year contestable period: if you die during that time, the insurer can review your application and, if you gave wrong information or left something out, it can deny payment, even if it was unrelated to the cause of death or was a mistake. In that case it must return the premiums to your beneficiary.

Before you change or cancel a policy you already have

The NAIC recommends checking these points before replacing a policy:

• Don’t cancel your current policy until you have received the new one. You then have a minimum period to review it.
• Replacing can be costly: much of what you paid in the early years covered the cost of selling and issuing the policy, and you may pay those costs again with a new one.
• If you are older or your health has changed, the new premium will often be higher. And, at least in the beginning, the new policy may not pay for some causes of death your current one covers.
• You may not need to replace it: sometimes you can change your policy or add coverage to it.
• According to Texas, it is illegal for an agent to replace a policy just to earn a new commission.

According to the NAIC, the policy you have now may have valuable rights and benefits that the new one does not. Ask for a written comparison.

The free-look period: you can return it

When you receive the policy, you have a few days to read it and return it for a full refund if it is not what you expected. The Florida guide says at least 14 days; in Texas, the period is at least 10 to 20 days. Write down the date you received it.

Frequently asked questions