Life Insurance Needs in Your 60s and 70s
The older we get, the more acutely aware we become of our mortality. Part of this realization is thinking more often about how we can help protect our family members in the case of an untimely death. Since death is an inevitable part of life, chances are a life insurance policy will not be purchased in vain.
According to a report published by Atidot, an insurance technology company providing artificial intelligence, big data, and predictive analytics tools for the life insurance industry, many people with life insurance policies are actually under-insured, with only about 28 percent of total coverage needs being met, leaving approximately 72 percent of needs unmet by coverage. Additionally, LIMRA's 2018 Insurance Barometer Study found that about one in five people who had life insurance said that they did not have enough. If you're in your sixties or seventies, there are a variety of factors to consider when you are evaluating your life insurance needs.1,2
Am I Too Old for Life Insurance?
From a mortgage to home repairs, there are many expenses your spouse could incur in the event of your passing. By purchasing a life insurance policy, you're providing both you and your family with peace of mind; you will know that these types of expenses will not lead to the loss of a house or more. A common belief about life insurance is that it's expensive, especially when purchased later in life. However, a couple in their sixties or seventies may not need as substantial a policy as a younger couple given that the policy would need to financially cover fewer years of life for the remaining spouse.
When considering whether you should purchase life insurance, it's important to evaluate how many people rely on you for financial support, as well as the level of that support. If your spouse doesn't work or only works part-time, then they will most likely require additional income in the event of your passing. In such a case, purchasing a life insurance policy is highly recommended if you want to make sure your partner is protected from excessive financial stress after you're gone.
For people with large estates, it's often recommended to take out whole life insurance to minimize estate taxes. Other people choose to fund their retirement with the cash value of their whole life insurance. If this is your plan, then you will want to purchase a policy.
Life Insurance and Your Health Status
Typically, the older you are, the more expensive your life insurance quote will be. This is in part due to the fact that the older you are, the more health problems you could have. In some cases, you may be better off investing your money instead. If you're in good health, it may make more sense for you to purchase a shorter term policy. For those with health problems, you may want to consider purchasing guaranteed issue life insurance, which anyone can obtain regardless of their health issues.
Renewing and Extending Your Life Insurance Policy
If you have a term policy—even one purchased many years ago—you may want to consider extending your coverage if you aren't able to cover your retirement costs with your pension and savings. You can do this by either renewing your current policy or converting it to a whole life insurance policy. If you choose to renew, it's important to note that your premium could increase, and some companies may not even allow you to renew, depending on your age.
What to Do Next
Regardless of your age, it's always recommended to consult with a financial professional who can evaluate your individual situation and needs to determine whether life insurance makes sense for you. If a policy is recommended, they can help you choose the type of life insurance that offers the most benefits for you and your family.
1. Atidot.com, 2022
2. Limra.com, 2022
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.