Wait. Before we go any further, I need to tell you something important. Age 60 is the last year you can take advantage of SBLI's no medical exam term life insurance. Age 61, you have to take a medical exam. So if you are considering getting life insurance for a 60 year old, hate needles, and are looking for a face amount of $500,000 or less, don't put this off.
60 is an age where many aspects of life insurance change. Some options cease while others are new. When searching for life insurance for a 60 year old, it's important to revisit the reasons for having it.
Many seniors don't need life insurance. It's similar to how plenty of people in their early 20's don't need life insurance either. Nobody is financially dependent on them.
Reasons to skip on life insurance for a 60 year old:
- The kids are grown up and established
- You are single
- Your spouse is not dependent on your income or pension
- You will not leave your spouse with any outstanding debt
- You have enough money to cover funeral expenses
- You have the assets (or long term care coverage) to cover any assisted living expenses
In short, if you and your family are financially secure, then there is no reason to continue with life insurance. Without that financial security, it might be a good idea to look at renewing your plan. Shopping the market for a better deal is always a good idea as well.
Use the Instant Quotes tool on the left (top if you're on mobile) to see rates from top rated companies right now. To see term life insurance tables for 60 year old men and women, scroll about halfway down the page. You will find rates for varying amounts and term lengths.
Steps to Save Money on Life Insurance at Age 60
Saving money on life insurance is easy if you ask the right questions. Although knowing the questions to ask is the hard part. As a rule these are some of the easiest ways to save money.
Step 1: Use an Independent Agent
The first way to save money (and time) is to use an independent agent. In the life insurance world there are two types of agents who can sell insurance, captive agents and independent agents. Captive agents are bound by contract to one company. Therefore they cannot offer any other company's products. Independent agents are not bound by contract to anyone.
Independent agents save you money because they can shop the market for you. Rather than trying to figure out which product you best fit, an independent agent finds the insurance coverage that best fits you.
There are 850 life insurance companies operating in the United States. Plus or minus a handful on any given year. That's a lot of searching to do yourself.
Step 2: Term Insurance is Cheaper than Permanent Insurance
The second best way is to consider term insurance. Term insurance is simple. There is the face amount (or death benefit) and a length of time for which the policy covers you. That length of time is the term.
Because there are no bells and whistles on this policy, you pay less. There is also a pretty good chance you will survive the term if you are healthy.
But wait, I don't want to pay for a policy that I might not use! The insurance companies have an answer for that. It's called the Return of Premium rider. If you are still alive at the end of your term, your insurance companies returns your paid premiums to you.
Step 3: Requalify for a New Policy Instead of Renewing Your Old One
Getting a new policy instead of renewing your old one helps you save money if you have gotten healthier since you last applied for life insurance. Maybe you lost weight, got your blood pressure under control, or removed that pesky thyroid.
When you renew a term policy, the insurance company will assume you are the same health class as when you applied before. Your rates will increase because you're older, but the health class stays the same.
Things such as your BMI or cholesterol levels can affect your life insurance rates. So improving your health can dramatically reduce what you pay.
Step 4: Opt for Annuity Payments
This little known secret reduces premiums because the insurance company does not pay your beneficiary all at once. Instead, he or she receives installments over a series of years.
Annuity payments can save you money as well as ensure your spouse will be taken care of for years to come.
How to Save Money with Pre-existing Conditions
Pre-existing conditions can be rough on your life insurance costs. Something such as high blood pressure can bump you from one health class to the next.
The good news is that some companies are more generous than others when it comes to different medical conditions. Although there are too many variations to list them all here. So what about if this applies to you or someone you know? This page has information about how life insurance companies review different medical conditions as well as occupations.
You will find information on how insurance companies view conditions such as diabetes, lymphoma, and epilepsy. If you don't see a topic of interest, let us know.
For 13 circumstances where you will want someone to pre-screen your application for life insurance, Forbes has an excellent article. Pre-screening is anonymous and just involves a quick email to an underwriter with the pertinent information.
Pre-existing conditions are another reason to speak with an independent life insurance agent when shopping around. A captive agent can tell you how the company he or she represents will rate glaucoma, for example. An independent agent can tell you how dozens of insurance companies will rate glaucoma. As a result of using an independent agent, you can compare companies who will be the most accommodating to your circumstances.
Rates for Term Life Insurance for 60 Year Old Men and Women
The following rates reflect people in generally good (not prefect) health who do not smoke. We ran a few options. You may also notice that there are no longer 30 year terms available above $100,000. All companies except one stop offering longer term lengths at age 60.
Rates for Term Life Insurance for a 60 year old man - Preferred Health - Non-smoker
10 Year Term
20 Year Term
30 Year Term
Rates for Term, Life Insurance for a 60 year old woman - Preferred Health - Non-smoker
10 Year Term
20 Year Term
30 Year Term
How to Get Your Money Back with Return of Premium
Term policies are the most affordable type of life insurance. End of story. Of course the gamble is whether or not you will outlive your policy.
Return of premium is how you hedge those bets. If you pass on during the duration of your term policy, your family receives your death benefit. If you outlive your policy, the insurance company returns your premiums.
The downside of adding a return of premium rider to your policy is that it increases your premiums. Not just a little. They often approach double of what the policy would cost without them.
Permanent Life Insurance for a 60 year old
Permanent life insurance is a good option if you don't want to gamble. You will pay more, but you will also get all the other accoutrements that come with it.
Both term and permanent policies pay out a death benefit. While term policies will only cover your for the number of years in the term, permanent policies cover you until age 121. Although it doesn't technically last forever, you are extremely unlikely to outlive it.
Since most people don't live that long, you are covered for life. The only catch is you must keep paying your premiums. If you miss payments, your policy lapses and it can be difficult to get it reinstated.
Permanent life insurance has other investment style features that can help you out while you own the policy. Although life insurance companies are legally forbidden to advertise them as investments. So instead you have "cash accumulation" features.
What is a Cash Accumulation Feature?
Cash accumulation has what is essentially an investment account tied to your policy. It's tax deferred as well. Your life insurance company will take some of your premiums and invest the money for you.
You can borrow against this cash accumulation. However any money not paid back at the death of the insured person is subtracted from the payout to the beneficiaries. These often get used for paying off medical bills or when someone needs help with down payments on a house.
Keep in mind with permanent life insurance for a 60 year old, you will not have as much time to build up a large cash accumulation. We recommend saving money with a term policy. Then you can use the extra cash you would have spent on a permanent policy to expand your retirement/investment portfolio.
Getting Life Insurance Without an Exam at Age 60
Like we talked about at the beginning of the post, this is the last year you can take advantage of SBLI's no exam policy. They offer term policies with the same strength of coverage as other companies. Plus they are about average as far as pricing goes. Most importantly, you skip the medical exam!
Once you turn 61, your affordable no exam options diminish. Most no exam policies fall into the guaranteed issue category, which sounds great. But a product that is guaranteeing acceptance tends to charge a little more.
Another way life insurance companies offset the risk is by including graded benefits. When you have a graded benefit it means your beneficiaries do not recieve 100% of the death benefits at first. The first year you own the policy, he or she might receive 60%. The second or third year, 80%. It's uncommon for a graded benefit policy to pay out in full if the insured person passes within the first 3 to 5 years of holding the policy.
Why Choose Abrams?
At Abrams Insurance Solutions, we work for you. We are an independent agency. Which means we can choose from over 70 top-rated life insurance companies to find the best fit for you.
We've built relationships with underwriters. Because when we see a rating we don't think is fair, that relationship allows us to revisit and sometimes negotiate better rates. If worse comes to worse, we will shop the market again and find someone more reasonable.
If you're interested in other age groups, our master list is here. If you have any questions we failed to answer here, give us a call anytime at 858-703-6178. We are happy to answer your questions and there is never any obligation to buy.