Life insurance is an important part of your retirement and estate plan. If you’re 70 years old or older and haven’t secured a life insurance policy now is the time to start your search.
Life insurance carriers make money by taking in more money than they pay out. They do this by carefully considering the risk of each policy holder and pricing the policy according to the level of risk—that is, the likelihood that the policyholder will die during the policy term. Policyholders that are already age 70 and over are considered one of the highest risks for a life insurance company.
Why are Life Insurance Companies Cautious About Selling Policies to Seniors Over Age 70?
As you can see from the graph below the average life expectancy in the United States is just over 78 years old (as of 2014) and growing. Insurance companies use advanced statistical analysis to determine the likelihood of a potential customer dying during the period of the desired policy term. For example—if you want to get a 10 year term policy and are 68 years old, the life insurance company computes the probability that you’ll die before the expiration of the policy (or before 78 years old). If life insurance companies wrote long term life insurance policies for people over the age of 70, they’d surely go out of business.
What Can I Do to Improve My Chances of Securing Life Insurance Over Age 70?
There’s a number of ways seniors and people over age 70 can improve their odds of getting affordable life insurance coverage:
Shop Carefully and Use an Experienced Life Insurance Broker
There are over 700 life insurance companies in the United States, each with their own preferred type of clients, specialization of risk, and underwriting guidelines. With that many choices, most consumers are overwhelmed by choice and don’t have the experience to choose the right company for their unique needs. That’s why using an experienced life insurance broker gives you a competitive advantage when shopping for life insurance if you’re over age 70. Just be sure you use an independent broker that has access to a large number of insurance companies.
Compare Quotes and Policy Options
Not all policies are created equal. The older you are the more important it is to carefully examine the details of the life insurance quotes you’ve received. Again, the best way to do this is to utilize an experience life insurance broker that has experience examining the details of each policy.
Get Started Earlier
When it comes to life insurance the earlier you buy the better. On average (and not considering health factors, etc) the younger you are when purchasing life insurance the cheaper it will be. Every year you wait to purchase life insurance the premium will become more expensive.
Is Age the Only Factor Affecting My Life Insurance Premium?
Nope. Age is not the only factor impacting your life insurance premium, though if you are over 70 years old it’s the most important factor.
The factors that are considered by the insurance company include:
Age. For life insurance companies age is the biggest determining factor in determining the probability of paying a claim for an insured. Consider the difference in risk of a 30 year old to a 70 year old—obviously the odds of the 70 year old dying are greater—and therefore the premium will be higher.
Smoking and Tobacco Use. Smokers and tobacco users have a greater chance of developing cancer and other life threatening diseases, and, on average have shorter life spans. These risks increase as a life insurance policyholder ages—making the insurance company less likely to issue a policy or more likely to price a policy very high.
Level of Fitness and Weight. Otherwise called “body type” your level of fitness, your body mass index and weight will contribute to your insurance premium. This is important if you are 70 years old or older. As we’ve already said age will be the number one factor determining your premium, and fitness and weight are generally (excluded medical conditions) under your control. Be sure to maintain a healthy lifestyle and diet to improve your chances of getting a good price on your life insurance.
Presence of Health Conditions. Diabetes, heart disease, obesity, alzheimer’s, heart murmur, high cholesterol, high blood pressure…Common chronic diseases are still the number one killer of senior citizens in the United States. Life insurance companies will look at your complete medical history and if you suffer from a chronic condition insurers will be sure to factor that into your risk profile and accordingly your premium.
Occupation. If you work in a high risk industry, such as fire fighting, you pose a high risk to life insurance companies. Coupled with the fact that you’re older than 70 years old and you have a challenging risk profile to place.
Driving Record. As we age our reaction time and coordination decreases. Life insurance companies will carefully review your driving record for signs of risky or reckless behavior and make assumptions about your disposition to take risks. If you have any serious violations like reckless driving or speeding these will impact your life insurance premium.
Can I Still Get Life Insurance Coverage Over Age 70?
The answer is yes, you can still likely find life insurance coverage even if you’re over age 70. But be sure to act fast as every year that passes your premium is likely to be higher than the year before.