Life insurance is an excellent financial planning option that can be customized based on your present and future needs. One option, term life insurance, may be purchased to cover you for 10, 20, or even 30 years, where permanent life insurance is designed to cover the insured for their lifetime. Whichever you choose is dependent on your needs.
In the spirit of the holidays, let’s answer one frequently asked question about life insurance through a hypothetical. Many prospective policyholders often ponder the ideal age to purchase life insurance, while a specific group might be curious about the upper age limit for eligibility. To explore this topic, let’s pose the question: Is Santa Claus himself eligible for life insurance?
Would Santa Clause Be Eligible to Buy Life Insurance?
No. Why? Because he’s too old. If we’re going to consider Santa Clause’s real, historical age (yes – he was technically a real person!) then Santa Clause is roughly 1,740 years old. In most pictures, the jolly guy looks to be around 70, or even 80 at most. However, the true monk that would later inspire the Santa Clause fable was born in modern-day turkey in the year 280 A.D. Nimble for his age if he’s still travelling all over the world in one night to deliver presents to children!
Most life insurance policies (keyword here is most) will contain an “age 100 maturity date.” This means that when the insured person turns 100, their policy expires and coverage ends, even if they were still paying premiums up until that point. Most life policies will contain this maturing date, specifically those that were issued prior to 2004. Santa Clause, being well over the age 100 maturity date, might be ineligible for coverage. Of course, the keyword here is might. Not every policy is the same, and nowadays with people living longer than ever, many insurance companies have modified the maximum age for coverage from the ripe old age of 100 to an astonishing 121.
When Are You “Too Old” for Life Insurance?
Here’s an unsatisfying answer: it depends.
Every life insurance company is different. Every policy is different. Life insurance is interesting because as time goes on we start to live longer and are (generally) healthier, rules and regulations start to change. To ballpark it, most companies will not permit the purchasing of life insurance after age 65 or 70. This is usually specific to term life insurance, since some whole life insurers will allow coverage to be purchased up to age 85 or 90.
Coverage can be limited for some people when purchased after a certain age and some causes of death may be excluded from your policy. Odds are that since you’ve purchased life insurance at a later age, you’ve likely had some health issues or ailments pop up. For example, if you’d been a cancer survivor, death due to the reoccurrence of that cancer may not be covered by your policy.
Reasons Why a Senior Might Need Life Insurance
Life insurance is usually purchased at a younger age to secure coverage for some of the major milestones we experience in our 20s-40s. Most families purchase life insurance when they get married, have a new baby, buy their first home, are still paying off student debts, etc. In all of these instances, having insurance can help secure your family in the event of your sudden passing.
But why would someone purchase life insurance as a senior? Here’s some reasons:
- To prevent outstanding debts from being passed on to family members
- To help cover funeral expenses, medical bills, and education expenses for grandchildren
- To support a spouse or partner as they continue to age
- To provide a legacy for loved ones after you pass on
Life Insurance Options as a Senior
Although Santa Clause may not have much choice when it comes to life insurance options, given his age, there are still ways to get life insurance as a senior. Keep in mind that your premiums will likely be far higher than if you had purchased a policy much younger and you may be required to participate in a medical exam to determine your current health/eligibility for coverage.
In your 50s, you’re likely still eligible for some form of coverage through the majority of insurers. You’re likely eligible for most forms of whole life or permanent life insurance, and you may be eligible for term insurance through some providers (although as to which terms you can select will vary).
In your 60s, term life insurance options may be more limited. Odds are you’ll only be eligible for a 10-year term policy, but you can still choose from a variety of permanent life insurance options.
People in their 70s or about to turn 70 have even fewer options, but may be able to choose a 10-year term policy or a permanent plan to create an estate for your loved ones after you’ve passed on. Purchasing life insurance as a senior means you have fewer options and some causes of death may not be covered. However, if you’re looking for a way to protect your family and provide them some kind of payout in the event of your death, talk with an agent!
AHI Group is happy to discuss insurance options for seniors. Give us a call to discuss your current financial goals today. One of our agents will work with you to find you a fitting plan.