10 Life Insurance Facts Everyone Over 60 Should Know

Life insurance can protect your family financially after your death, and the money from a policy can help them to pay for things such as bills, debts, and your end-of-life expenses.

However, buying life insurance after age 60 comes with challenges, as well as some opportunities. Here's what you need to know about life insurance to prepare yourself financially if you're over 60.

A simplified issue insurance policy is designed to be a quick way to obtain life insurance without a medical exam. This might appeal to those who are 60 and older and worry that their health status might hold them back from getting coverage.

Traditional life insurance policies require a physical exam and blood work. It can take weeks of underwriting before your policy goes into effect.

By contrast, a simplified policy may require a small questionnaire but can be finalized in a matter of days. However, remember that because you forego a medical exam, the insurer is taking on a higher risk. That usually translates into a higher premium.

Expect death benefit payouts with simplified issue policies to be smaller, often under $100,000. In addition, it is possible that the policy will need to be in effect for two years or more before it will pay out a full death benefit.

Guaranteed issue life insurance is another type of policy that does not require you to undergo a medical exam, although that also might mean higher premiums.

With simplified issue life insurance, you typically need to answer some questions about your health history when you apply for coverage. On the other hand, guaranteed issue life insurance accepts everyone without an exam or medical questionnaire.

You may also have a waiting period before the policy goes into full effect, often two to three years.

In 2023, the average cost of a funeral and burial was $8,300, according to the National Funeral Directors Association. A final expense policy covers these expenses and doesn't leave your grieving family stuck with paying bills.

This type of insurance doesn't require a physical exam, but those with serious or advanced medical conditions may not be eligible. In addition, some insurers will not sell coverage to people once they reach a specified age.

Coverage amounts are smaller than for other life insurance policies, but that means premiums are also more affordable.

Insurance companies typically base premiums on factors such as your age and your health status. People who are 60 or older tend to have more health conditions, and this might impact the type of coverage for which they qualify and how much they will pay for a policy.

For example, if you have a pre-existing condition or a family history of heart disease, this will likely impact your premium cost. In some cases, you could be denied coverage due to health issues.

Insurance premiums increase the older you get. This is because the risk that you might soon die grows as your age increases.

MarketWatch recently estimated that a 25-year-old male would pay about $27 per month for $500,000 in coverage. The same policy for a 55-year-old male would cost more than $150 a month.

Yes, it is true that on average, women pay less in life insurance premiums than men — about 24% less, according to Policygenius. This is because women live longer than men.

Although gender is one factor in determining your life insurance costs, experts say that health and lifestyle often have more of an impact.

The truth is that not everyone needs life insurance. If you have significant assets or a lot of money tucked away in retirement accounts, you might not need an insurance policy.

The richer you are, the more likely it is that your loved ones will be financially secure after you die.

One way to determine if you need life insurance is by taking a look at the financial impact your death would have on loved ones. Then, consider whether you actually need a policy or whether your family could do fine based on their own income or on the money you leave behind.

Life insurance companies often offer riders, which are additional coverage options you can purchase and add to your policy.

For example, a policy with a rider for long-term care coverage can be helpful if you become unable to live independently and need help with basic activities such as bathing and dressing.

This type of rider can cover the high cost of a nursing home, protecting your family from footing the bill. But remember that you will need to pay for this extra coverage, so you'll have to determine whether it's worth the extra cost.

If you get life insurance coverage through your employer as part of a benefits package, you may be able to convert that group policy coverage to individual coverage when you change jobs or retire.

Each insurer will likely have different rules surrounding this conversion option, so find out whether you can keep your previous coverage at the same rate for a certain period.

Insurance companies may check your credit score before issuing policies. If your score is low, the insurer might worry that you will struggle to pay premiums and might charge you more to compensate for this risk.

Check your credit score before applying for life insurance. Pay your bills on time, get out of debt, and see if that improves your score. Raising your score might help you save money on premiums.

Life insurance policies come in all shapes and sizes. Working with a trusted insurance broker can help you navigate the different providers and coverage amounts available to you.

Even if you're over 60, you can still purchase coverage that will help your family get ahead financially and stay there.