It’s no secret that people are living and working longer these days, some well into their 80s and 90s. What many may not consider is, there is a real possibility that those who have term life insurance policies acquired in their 40s and 50s will need to shop for life insurance again in their 60s, 70s and sometimes in their 80s. Outliving your term life insurance policy happens when your coverage expires at the end of its term – but during your lifetime. When this happens, you no longer have life insurance. Worse, you run the risk of paying a higher premium, or being considered uninsurable, when you apply for another term life policy later in life.
Although we all wish to maintain good health as we age, the likelihood of that diminishes for many with each passing year. And health isn’t the only indicator of insurability. Reasons to be found uninsurable could range from a serious medical condition, like heart disease, or poor results from the required medical exam, to non-medical reasons like bankruptcy, a criminal record, a positive drug test, or even a dangerous hobby.
Because of this, the rule of thumb is to acquire life insurance while you’re young, healthy, and able to adjust coverage to suit your needs, lifestyle, and budget - as they change over time. That’s fine and dandy for the young. What about those who’ve reached “elderhood”? Most are living on fixed incomes, many are in poor health, and too many have been led to believe that life insurance is unaffordable, so why bother at their age? That is why experts stress that you should consult a trusted insurance adviser or agent to get the facts.
While you can purchase life insurance in your 70s and 80s, issues you may face include:
• Most life insurance companies have an age limit and stop offering coverage to people over that age.
• Policies for seniors often have lower coverage amounts and shorter terms than traditional policies.
• Premiums tend to increase as people age.
These considerations are not meant to be deterrents, they are merely facts to be considered and planned for. All is not lost for those who outlive their term policies. However, it’ll take a little more due diligence to regain the coverage that was lost. Outliving life insurance happens – but it doesn’t have to. Plan your exit strategy with the help of an experienced insurance adviser or agent so you can feel confident your insurance coverage will still be available to do what it’s intended to do.
Owner & Principal Adviser at Forty7 Benefits, Kim Parker, is an independent insurance adviser focused on helping individuals, families, and employers make informed decisions concerning insurance coverage and benefits. Her experience includes more than 20 years working in all facets of the health and life insurance industry, with emphasis on Medicare benefits over the last 12 years. Contact Parker at 810.350.4117 or kim@47benefits.com.
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