Before you buy the first policy that comes along to get this over with, there are some things you should know about saving money on life insurance for a 63 year old.
Health conditions seem to magically crop up once people reach their 60s. Everything can matter, even something normal like high blood pressure. Give your agent a list of anything affecting your health and medications you are taking. They will use that to narrow down the companies who will offer you the lowest rates.
Now that you're nearing retirement age, your reasons for buying life insurance may have changed. Make sure your new policy type reflects what it is supposed to do for you. Then calculate exactly how much you will need with a life insurance needs calculator instead of picking a number that, "sounds about right."
How to Save Money of Life Insurance at Age 63
Follow these simple steps, and there is a good chance you can get much lower premiums. Not every tip may apply to you because every family situation is different. But we’ve found these tips can save our clients save hundreds (even thousands) of dollars.
Use a Needs Calculator for Life Insurance
The first, and best, way to save money on life insurance is to use a life insurance needs calculator. It takes into account what you might choose to use your life insurance for and makes you actually analyze how much you need to cover each reason for buying.
A needs calculator takes the guesswork out of life insurance purchases. Instead of 7 to 10 times your annual income, the categories look at what applies to you, which categories are most important, and what you can self-insure.
This way, you know that you aren’t buying too much life insurance. Why spend money on it that you don’t need to? It also makes sure that your family won’t be left under-insured if something happens to you.
Have an Independent Agent Run Quotes for You
Independent agents can offer products from many companies which they trust to take care of their clients. That typically means companies with strong financial ratings that aren’t at risk of going under in a few years. They are one of two types of life insurance agents.
The other type, captive agents, are contractually bound so that they can only offer products from one company. Usually, these are companies who are pretty financially stable, so it’s not a bad choice. The downside in the underwriting guidelines are consistent through all policies that company offers.
Use the INSTANT QUOTES form on this page to check rates from the leading companies for your exact age. The rates are set by the life insurance companies so you will not find a lower rate for the same policy. Questions? Contact us for help any time.
Looking at companies with different underwriting guidelines gives you an opportunity to avoid paying through the nose for any health issues that crop up. For example, high blood pressure is common once people reach their mid-fifties. Some life insurance companies penalize people for high blood pressure. Other companies view it as part of aging and do not add extra premium for it.
An independent agent and point you toward the companies who don’t penalize people for things like high blood pressure. Captive agents are stuck with the underwriting guidelines of their company.
Take the Life Insurance Medical Exam for a New Policy
Sometimes the more information a life insurance company has on you, the better your rates can be. (This isn’t always true, see our article on genetic testing and life insurance.) In the case of whether or not to take the medical exam, it’s always better to take it.
If you choose to apply for a no exam life insurance policy, the insurance company typically assumes (with reasonable data to back up their assumption) that there is some health issue that you are either trying to hide or are unaware of.
Policies are priced differently based solely on whether or not they require a medical exam. So merely by choosing a policy that requires the exam, you are applying for a much cheaper policy.
Secondly, if you prepare for the life insurance medical exam, then there is an additional chance you can qualify for a better rate class. It’s incredible how even two weeks can improve our overall health.
Requalify, Renew, or Convert
If you are approaching the end of a term life insurance policy, you may be faced with several options. Each has its pros and cons depending on the type of policy you originally bought, and the difference between your health now and at the time you bought it.
If your health has improved since you bought your life insurance policy, it would be wise to consider requalifying. Either way, you will be paying new rates based on your current age. What you’re looking for here is to improve your health class. Being healthier can make a 25% (or more) reduction in premiums. If you move from a standard health class to preferred, you will save a ton of money. Talk to your insurance agent if this applies to you.
If your health has deteriorated since you last purchased life insurance, consider renewing your term or converting your term policy into a permanent one. This way your health will not be reassessed. Your life insurance company will assign you the same health class that you already have. Looking at a new policy means you have to go through underwriting again where they take a detailed look at your health.
Term is the Cheapest, But Not Always Best
Term life insurance costs significantly less than permanent life insurance. The insurance company takes on less risk because they may not have to pay the claim. With permanent insurance, they almost always have to pay the claim. (Almost always because a percentage of people will let their policy lapse.)
If you are worried about your budget for life insurance, term might be the way to go. But it will depend on your families needs. Take a hard look at the reasons people buy life insurance. If you want to leave something for your family to cover estate taxes, a term plan won’t guarantee they’ll get the death benefit.
Do I need Life Insurance at Age 63?
That’s an excellent discussion to have with your family or spouse. It doesn’t make sense to spend money on something that “people just have.” This is doubly true as you approach retirement age.
You probably don’t need life insurance if the following situations apply to you:
- Adult children who are financially independent
- No children
- Mortgage is paid off
- Little to no debt that will eat up your estate
- No other financial dependents
If you have someone (or several someones) financially dependent on you, then making sure they’re taken care of through life insurance benefits is one way to continue to care for them after you pass on.
Term Life Insurance Rates for Men at Age 63
The cost of term life insurance at age 63 can surprise people when they go to renew after a 30-year term they purchased in their 30s. On the other hand, since most people are more financially stable in their 60s, the premiums can be easier to handle.
These monthly rates are for a 63 year old man in relatively good health who doesn’t smoke.
Monthly Rates - Men
Term Life Insurance Rates for Women at Age 63
The table below shows monthly rates for a woman who doesn’t smoke and is relatively healthy.
Monthly Rates - Women
For different term lengths and benefit amounts, you can use the Instant Quotes tool on the left. (Top if you're on mobile.)
Permanent Life Insurance for a 63 Year Old
Permanent life insurance can make more sense if you’re approaching retirement age. Life circumstances that work better with term insurance are often less relevant now, providing for children or paying off a mortgage.
Permanent insurance works well for families looking to protect their estates or making sure they have the cash to pay for burial services.
Permanent (aka whole life insurance) has extra features that can make it more attractive than a term policy. Features like the cash value accumulation which is a no questions asked loan from your insurance company.
No Exam Life Insurance
Options for people wanting to skip the life insurance exam are getting more and more common. As more companies begin to offer this type of policy, the prices are going down too.
You will pay a little more for a no exam policy, but the rates have plummeted in the last decade. They’re not far off from what a policy requiring an exam would cost. Typically, the extra expense stems from the additional unknowns about a person.
While these policies are available, you will save money if you apply for a policy that requires a medical exam.
Pre-existing Medical Conditions
Once you hit your 50s, medical surprises start popping up. Whether it’s high blood pressure or cancer, no one is immune. This doesn’t have to make finding life insurance more difficult. It just requires a few extra steps for your insurance agent and some frankness from you.
When you talk to an insurance agent about a life insurance policy, tell them about any medical conditions that have affected you. Insurance companies will be most interested in anything recent. Although long-past conditions, like beating cancer, can affect your rates.
When you tell your agent upfront (even if it feels awkward to you), they can take that information and narrow down your options to the insurance companies who have better underwriting guidelines for you. Keep in mind that insurance agents talk to people with all sorts of backgrounds, whatever medical condition you may have, they have probably seen it before and can help if you’re upfront about it.
Here's more information on life insurance with pre-existing medical conditions.
Guaranteed Issue Life Insurance
Guaranteed issue life insurance is a viable option if you have severe health complications. It’s a type of life insurance that will approve everyone. There is no health exam and few to no medical questions. (Some policies ask a handful of medical questions. Most policies don’t ask any.)
The downside is the death benefits are extremely restricted. Companies limit the amount to around $25,000. Naturally, it varies by company.
Guaranteed issue policies have another way of mitigating loss for the company. They call it graded benefits. It’s a tier system for distributing benefits based on how long the insured person lives after taking out the policy.
For example, the graded benefit structure might look something like this.
Years You Hold the Policy
1 - 2 Years
110% of premiums paid
After 2 Years
100% of face amount
With a benefit structure like the one above, the company won’t lose money on people buying when they’re diagnosed with a terminal illness.
Conclusions on Life Insurance for a 63 Year Old
Once you have the amount you need, the type of policy, and someone to shop the market for you, you are 90% of the way there. There are still a few other ways to save money, like the list we have at the top of the article, but you've hit the main points.
Just make sure that you find the insurance companies that suit you the best. Not the ones that spend a fortune on TV advertising or are familiar household names. They might be the right companies for you, but make sure to explore your options. You can't change how a company underwrites health, so it's really important in your 60's to pick the company that suits you the best.
Why Use Abrams Insurance Solutions?
We are a group of independent agents. That means we work for you and not the life insurance companies. We work with 70 of the top-rated life insurance companies in the United States. So we can find something to fit everyone’s needs and budget, whether you're looking for life insurance in your 60s or your 20s.
It’s important to us that someone of any age and any health can find protection for their family. We use our expertise and experience with things like pre-existing conditions to narrow down options of what will work best for each family.
The Bottom Line
Not everyone needs life insurance, but it can help keep families who do out of trouble. Discussing death in specifics is difficult, especially their own or that of a cherished family member. We’re here to help facilitate that discussion and help plan so that event doesn’t have to be financially challenging as well.
Give us a call today at 858-703-6178. We are here to help.