Term life insurance is designed to replace your income and protect those who depend on you financially. In the past it was mostly sold to 30 and 40-year-olds — people in the prime of their working years and with young families depending on them.
However, the world has changed. People are working longer, becoming parents at an older age, and taking care of multiple generations. Instead of cancelling their insurance policies in their 50s and 60s, many people are buying more. This has led several readers to ask whether term life insurance is available and affordable at older ages. The good news is, the answer is yes to both.
Term life insurance is available to people as old as age 80, and pricing can still be very attractive for those in good health. For example, a 55-year-old man in good health could get $1 million of 20-year term life for about $250 per month. In addition, insurers have developed accelerated underwriting programs in recent years that allow people up to age 60 to apply for insurance without any medical exams.
When thinking about term life insurance at older ages, many of the same rules apply — apply as early as you can, shop multiple insurers to get the best price and don’t buy more than you need.
However, there are a few additional considerations for folks in this age group. First, consider if permanent life insurance is a better fit. While we normally believe term life insurance is best for most people, there are exceptions. For example, if you’re looking for insurance to fund your burial costs or leave a legacy, you may need coverage to last your lifetime, so you’ll be protected no matter when you pass away. Another example is if you have a special needs child or are looking after parents and want to make sure they’ll always be taken care of. In these cases, even a 30-year term might not be long enough to fully eliminate the risk of you outliving the policy.
On the other hand, if you have a shorter-term need (e.g. you have 10 more years of work and want to make sure your salary is covered), consider a shorter policy term. While most term life policies have 20-year terms, going with a 10-year term could save you a substantial amount. For example, a 60-year-old woman in good health will pay $100 per month for $500,000 of 10-year term, but $170 per month of 20-years of coverage. Just make sure that you really only need coverage for 10 years, since getting additional coverage in the future could be challenging if you run into health problems.
Finally, if you’re planning to keep your insurance policy well into your retirement, make sure you factor the costs into your budget. While an extra $100-$200 per month might be manageable today, it could become a real burden 10–15 years from now when you’re living off your retirement savings. Make sure you have the financial room to keep your policy for as long as you need it.
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Saturday Insurance Services, LLC (“Saturday” or “Saturday Insurance”) is a licensed, digital insurance advisor. All tools, quotes, and information provided by Saturday are for educational purposes only and based on the limited information, if any, provided by you. We urge you to consult with your financial and tax advisors before making any purchase decisions. All quotes and estimates are non-binding and are not to be construed as a guarantee you will be able to purchase insurance. Availability of insurance and final pricing is determined solely by our insurer partners and subject to their review and acceptance of a completed application. All product guarantees are subject to the claims-paying ability of your insurer.