It’s no secret that it becomes harder and more expensive to get life insurance as you get older. Life insurance companies prefer to cater to younger people who have a good chance of outliving their term life policies or paying into whole life policies for several decades. But this isn’t to say you have no options if you would like to use an insurance policy to take care of your final expenses while you are still alive, or leave a payout of some amount to your heirs when you pass away. There are a few things to keep in mind if you are shopping for the best life insurance for elderly people.
If you look at term life insurance for the elderly, just remember that if you do not die within the term of the policy that the insurance company is not obligated to pay anything out to your loved ones. Now, it is possible to get term insurance with an option to renew it after the policy term finishes. Naturally you will pay a higher premium (all else being equal), but weigh that against the benefit of knowing that an eventual payout is more likely. Another thing of which you want to be aware is whether the policy is level term or not: do premium payments remain the same over the life of the policy -level term- or do they increase?
Term life insurance for elderly people is often the way to go, relative to whole life, for other reasons. Will you be able to make the higher premiums in the years when your earning power will probably be declining? Also, and this is a big shortcoming, whole policies sold to people over 50 or so often have no cash value to borrow against, or to take if you would like to terminate your policy early.
It’s a major selling point of whole life when you are younger, even though the premiums are higher: these policies behave a little like investments. Even though most experts actually advise against whole life because of the hidden fees and lack of real flexibility (as one has with variable or universal life insurance for example), their investment aspect still makes them attractive to some people. Take that away, and the payout relative to what you will pay into the policy makes whole life an even less attractive option for most older people.
A final word: it’s very easy to find ‘guaranteed acceptance’ policies for the elderly online, and in direct mailings. The idea of needing no medical exam to get insurance that can at least pay for your final expenses is naturally attractive to older people, but buyer beware. The amount you pay into these policies may very well exceed the death benefit payout that your heirs receive. If you are reasonably healthy, it might be wise to find a renewable lower-premium term policy that does require a medical exam. Consult a knowledgeable agent that you trust to help you find what is best for you.