The process of buying life insurance at age 61 is not much different from buying life insurance at 30. The two noticeable differences in what you get are pricing and fewer options for term insurance.
Steps to Save Money on Life Insurance for a 61 Year Old
Luckily, you don't have to sell your antique coin collection to afford life insurance at 61. There are several tricks for saving money on life insurance. Adhere to the following suggestions, and your pocketbook will thank you.
Use a Needs Calculator, Don't "Ballpark"
Estimating your needs based on 7-10x your annual income is not quite the definition of folly, but pretty close. You can easily end up grossly over-insured or under-insured. Either way, you are losing money or failing to mitigate risk.
Instead of ballparking, use a life insurance needs calculator. That way you know exactly how much life insurance you need. Also, you can stop worrying that maybe you are paying too much.
Doing your own analysis of your needs before you step foot in an insurance office means you will never be oversold. You can get accurate quotes. You can easily compare policies to see which company will offer you the best deal.
Speak with an Independent Agent
There are two types of insurance agents in the United States. Agents who can sell the products of many companies, and those who can only represent a single company.
Let's say you are looking at going out to dinner tomorrow night and you want to try a new restaurant. Would you use a search engine that only showed you Thai food or a website like Yelp that can show you lots of options and you can customize it later? (Now if you are in the mood for Thai food, that's one thing. Or if you only eat Thai food the first option might be best, but the rest of us want options.)
Captive agents can only represent one company. The company may have several different types of life insurance policies. Yet the rates will all be based on the same actuarial tables.
Independent agents can show you the products that will best fit you from dozens of different companies. Each company assigns health classes (what determines your rates) on different criteria. Company A might charge less for someone who is overweight, whereas Company B might charge less for someone with diabetes.
Maybe, at the end of the day, the captive agent has the best plan for your family. By speaking with an independent agent before you make a decision, you know you've done your due diligence on shopping the market. Well, in reality, the independent agent will do it for you, but it amounts to the same thing.
Term is Cheaper, But Not Always the Right Decision
You will pay less for term life insurance than permanent (or whole) life insurance. That's just how the probability tables work out.
But if you are looking into life insurance because you want someone that will cover burial expenses, pay off any debts, or leave something for your heirs, then permanent might be a better fit for you.
If you want something that will replace your income in case you pass on before you retire, then term will be a better choice.
It all depends on your intention. Don't let anyone tell you otherwise.
Consider the Cost of Requalifying Instead of Renewing
Some term life insurance policies offer to renew at the end of your term. They make it exceptionally easy to stay with the same company. Most of the time you don't have to go through the entire application and medical exam all over again.
Renewing is wonderful if you want to continue your policy when your health has deteriorated. Requalifying is better if your health has improved.
Most people think that your health deteriorates as you age. This can often be the case, but not always. Many people make lifestyle changes and lose weight, stop smoking, or get their cholesterol under control.
These seemingly minor things can make the difference of thousands of dollars for a life insurance policy.
It's easier to buy one large policy than several smaller ones. But what is easiest is not always the most cost-effective.
Did you know that most medical exams are good for six months with just about every insurance company?
For example, if you are looking for life insurance to both pay off your mortgage and leave something to your children, it may be wiser to layer two smaller policies. A decreasing term policy will cover your mortgage until you pay it off and the premiums will get cheaper over time. You can stack that on top of a whole life policy to make sure you leave something for your heirs too.
If you go this route instead of one expensive whole life policy, you can use the medical exam from the first one you apply for on the second application. That is as long as you apply within six months. Talk to your agent who can fill out most of the information on your application too.
Term Quotes for a 61 Year Old Man
These are the monthly rates for a man in generally good health at 61. The top row shows the death benefit amount your beneficiary would receive.
Term Quotes for a 61 Year Old Woman
Women typically pay less for life insurance than men because they statistically have longer life expectancy. The chart below shows monthly rates.
Permanent Life Insurance
Permanent or whole life insurance lasts for your entire life as long as you pay your premiums.
There are a few other perks too. Many plans have a cash value accumulation feature. This allows you to borrow against the cash value you have built up over time.
Many people take advantage of the cash value accumulation by using it from everything like funding annual vacations to paying for unexpected medical bills. The catch is you must pay back amount borrowed. The insurance company is using your death benefit as collateral.
It's basically a no questions asked loan.
Permanent life insurance is best for situations where you want to pay off something beyond your working years. Whether that is a house, burial expenses or paying off whatever debts your estate may incur.
Talk to your life insurance agent about what type of life insurance would be best for your situation.
Guaranteed Issue Life Insurance
What happens if you are in poor health? Are there still options for life insurance?
Absolutely. Keep in mind they are typically more costly options. Guaranteed issue is a type of life insurance offered to people regardless of their health. Everyone gets approved.
There are a couple of things to watch out for. Most guaranteed issue policies have a graded benefit. This means that the benefits are stepped based on how long you live after purchasing the policy.
For example, a graded benefit policy might refund all premiums paid + 10% if you die within the first 2 years from a pre-existing condition. If death is from an accident, then the full death benefit is usually paid out from day 1. After 2 years, any death is paid out at the full amount.
It's not ideal for everyone, but it is better than nothing for many families.
Why Health Ratings Matter for Life Insurance at Age 61
Your health and your age are two of the most important determining factors in life insurance. Your biological sex is the 3rd, but there isn't much you can do about that.
The younger you buy life insurance, the cheaper it will be. The healthier you are, the cheaper it will be.
Procrastination on life insurance can end up costing you thousands of dollars. Yet if you can improve your health just a little, you may be able to get into a better health class. A better health class can make all the difference.
You can use the Instant Quotes tool to the left (top if you're on mobile) to see the difference for yourself. The rates in the above tables were calculated using preferred health. Try putting in the amount of life insurance you need based on the Life Insurance Needs Calculator and switching the health classes.
Sometimes premiums can increase by 30% or even 40%. There are several tips and tricks to acing your medical exam that can help bump you up to a better rate class.
Why Use Abrams Insurance Solutions
At Abrams Insurance Solutions, we dedicate our time and resources to help folks with pre-existing conditions find the best life insurance at the lowest prices. That's why we will shop the market for you and leverage our connections to get you the best possible rate class.
The Bottom Line
Our independent agents are here to serve you and your family. We work with the best 70+ companies and will make them fight over your business. That way you know you are getting the best possible deal.
Feel free to call us anytime with any questions. There is never any obligation to buy. Reach us at 858-703-6178 for information on life insurance at any age.