You may think life insurance isn’t necessary if you’re over 80 or near it. You should be set financially, and life insurance is another expense you don’t need.
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This isn’t the case for everyone.
Plenty of people buy life insurance after 80, especially those who have had unexpected expenses and had to drain the money they had saved for their loved ones. Life isn’t perfect – we all learned that the hard way the last couple of years, and if having life insurance over 80 is what you need, you have more options than you may realize.
It sounds crazy, but here’s the truth.
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How to Determine How Much Life Insurance you Need After 80
Deciding how much life insurance you need after 80 is easier since you have more limited options. It’s not that insurance companies won’t sell you life insurance after 80 because they will but in much smaller amounts.
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You can buy $2,000 in coverage at a minimum and a max of $100,000, but that’s rare. The average senior over 80 gets up to $25,000 in life insurance coverage.
How do you decide how much you need?
Look at your financial situation and ask yourself why you are buying the coverage. Are you trying to cover your funeral expenses? The average funeral costs around $10,000.
Do you have other expenses you need to cover, like debts you’re leaving behind or estate tax you want to cover for your loved ones?
The more you need to cover, the higher the coverage amount you’ll need.
What Type of Policy Should People over 80 Get?
Once you’re over 80 years old, you have fewer options for life insurance. Because you’re older, you are at a higher risk for insurance companies. Most ‘standard’ terms and whole life policies won’t apply to you.
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Instead, you’re looking for final expense insurance, which is life insurance created for seniors. Most insurance companies don’t offer this insurance until you are 50 years or older.
Final expense insurance, as the name suggests, is insurance to cover your end-of-life expenses. It’s a popular policy for those who don’t have the money saved to help their loved ones cover their funeral and other end-of-life expenses.
Final expense insurance is a whole-life policy, but if you’re over 80 years old, chances are the policy won’t accrue a cash value of much worth. It takes a long time to accumulate enough cash to tap into and use for other expenses or supplement your retirement income.
There’s more.
Final expense insurance can be guaranteed or simplified life insurance.
Guaranteed life insurance means everyone gets approved regardless of age or health conditions. You’ll pay higher premiums but get the coverage you need for your loved ones.
Simplified life insurance is less expensive, but you must be able to answer a few questions about your health. They pertain to big things like you don’t have a heart condition or have final stage kidney disease.
Premiums for Life Insurance over 80
So how much can you expect to pay for life insurance over 80?
It’s not cheap, but it’s worth it if it protects your loved ones. On average, people pay $100 – $200 monthly for coverage up to $20,000.
The less coverage you need, the less you’ll pay, but don’t be stingy when thinking about what your loved ones may need.
Males usually pay higher premiums than females, and obviously, the older you are, the more you’ll pay.
For example, an 80-year-old female looking for $10,000 coverage may pay $100 a month, while a male may pay $135 a month.
As you get older, the premiums increase significantly.
An 89-year-old female looking for $10,000 coverage may pay $275 a month, and a male may pay $350 a month.
Bottom Line
If you’re over 80, consider how much life insurance you need carefully. There are more life insurance companies than you probably realize will give you life insurance, but you’ll pay higher premiums.
Think about what you want to accomplish with the funds – are you leaving behind a legacy or just need money for your loved ones to cover your expenses? Either way, you’ll find policies that will protect you just how you need them.
