When you reach your sixties, your financial obligations change. You might have a second mortgage for a second home or you could still be paying off the tail end of your first mortgage. You could have children who are permanently dependent upon you, a spouse who is also permanently dependent upon your income, or perhaps you now have new grandchildren when you want to protect financially.
You could equally be on the opposite side of the spectrum, with a paid off home and children who are no longer dependent on your income. Perhaps you fall somewhere in the middle of the spectrum as well. Regardless of your financial situation, if you need life insurance coverage in your 60’s, you want to begin looking for coverage as soon as possible, as your rates are going up while your options are going down every single day.
When you are choosing between burial insurance, term life insurance, or permanent life insurance there are different variables you have to take into consideration. Working with a third-party broker will help you to go over the different aspects of your circumstances to better determine which option is ideal. They will review factors such as:
Hypothetically, a sixty-year-old applicant probably doesn’t have children living at home. Most sixty-year-old applicants have children who are grown up and on their own which means that the applicant has different needs. Such applicants might want a smaller face value for their Term Policy to cover final expenses. If there is a dependent spouse a Term Policy or whole life insurance policy might be an ideal solution to provide for the needs of the spouse.
There are many flexible options out there with different insurance providers which is why a qualified third-party broker can help you compare which strategy is best for your situation.
What Does Burial Insurance Cover?
Burial insurance, as the name implies, covers the cost of burial. More specifically, it covers the costs associated with death. This includes any cost incurred during the funeral services or burial, such as:
- Burial Plot
- Funeral Services
Many seniors in their 60’s who think they have no need life insurance because their debt is paid off and they have no more financial dependents may be shocked to learn just how much all of these things cost. The average American funeral costs anywhere from $7,700 – $10,000!
While it is gruesome to think about one’s own death, it is perhaps worse to think about leaving this type of financial burden on your family members in the event of your death.
Types of Life Insurance Available to 60-Year Olds
Term Life Insurance
Term life insurance lasts for anywhere from 10 to 30 years. Typically, only 10, 15, and 20 year term policies are available to 60 year olds, and as you approach 65, these options can become even more scarce. On top of this, by the time your term policy expires, you will be too old to get any other type of coverage. There are a few term policies that cover people through age 85 and even 95 on the market.
Term is recommended for people in their 60’s who do not have a need for permanent coverage in the event that they outlive their policy. For those who will need permanent coverage, term may not be the best option. While it is far cheaper than permanent coverage at this age, it may not be best for some people.
Permanent Life Insurance
Permanent life insurance lasts for your entire life or until you have reached the maximum insurable age of your policy (usually 95, 105 or 121). This type of life insurance accumulates cash value over time with the premiums you pay in. This cash value can then be borrowed against on a tax-free basis.
For people in their 60’s, permanent life insurance policies can be VERY EXPENSIVE. In the thousands of dollars per month, even for people who are in good health and who are non-smokers. For this reason, it is really just not a realistic option for people, unless they opt for a no medical exam policy, which can offer affordable permanent life insurance for seniors, but with lower face amounts than traditional policies.
Permanent life insurance is recommended for people in their 60’s who can easily afford the high cost, and who have a need for life long coverage for establishing a trust, executing a will, or passing on a legacy to their family.
Burial insurance is a form of permanent life insurance that offers small face amount life insurance policies to people ages 50-85. It is only available in small face amount policies (typically up to $50,000), though some companies sell larger policies. This is life insurance with no medical exam, and sometimes no health questions in order to receive coverage.
This type of life coverage is more expensive in terms of cost per thousand dollars of coverage than term policies, but it also offers coverage for life, as well as coverage to people who may otherwise be denied life insurance because of health related problems or age.
Burial insurance is best for people in their 60’s who do not have a lot of remaining debt or financial dependents and only need small coverage amounts, people who need immediate coverage, or people who would otherwise be denied traditional life insurance coverage.
Types of Burial Insurance or 60 Year-Olds
Simplified issue burial insurance is insurance with no medical exam, but that has a few health related questions. People can still be denied this type of coverage based on health issues. As a result, it is less expensive than guaranteed issue burial insurance, but takes longer to qualify for coverage.
This type of burial insurance is recommended for anyone who can wait the 48 hour to 2 week application time in order to get burial insurance coverage who is also healthy enough to qualify for coverage.
People with the following health issues will likely be denied simplified issue burial insurance:
This type of burial insurance is available to anyone. It is insurance with no medical exam or questions. Simply apply and get life insurance coverage within 24 hours or less (in most cases). This is the most expensive type of life insurance because it is open to the most risk.
Guaranteed issue burial insurance is only recommended for people who either need immediate life insurance coverage, or who are unable to qualify for traditional coverage options.
How Do Death Benefits for Burial Insurance Work?
Depending on your level of risk, the policy itself, and the company you purchase your coverage through, your death benefits may work differently. The three main types of death benefits for burial insurance policies are:
This is a death benefit that remains constant over time. Usually, this is only available for select simplified issue policies.
Graded death benefits are available on most guaranteed burial insurance policies. These policies have a graded death period which typically lasts 2-3 years of the purchase date of the policy. In this period, the beneficiaries will only receive a portion of the death benefit. Once the period is over, 100% of the death benefit is paid out to the beneficiary.
The reason this exists is to protect life insurance companies from higher risk individuals. An example of how a graded death benefit works is:
Modified death benefits operate under the same principal as graded death benefits, paying out a portion of the DB throughout the graded period, then switching to a 100% payout once the period is over. The difference between the two being that modified death benefit policies also pay back a portion of the premiums paid into the policy as well. Once the graded period is over, the premiums paid in are no longer paid out to the beneficiary.
An example of how modified death benefits work:
How Much Does Burial Insurance Cost for 60 Year-Olds?
For this sample, the individual is from California and is in the Preferred Plus Non-Smoker category, taking out coverage worth $20,000.
Consider the following:
If a first purchaser purchased a guaranteed universal life policy where premium did not change, at age 60, a $15,000 coverage policy from Mutual of Omaha for $702 per year.
A second purchaser waits until 69 to pick a $15,000 from Phoenix which costs $1,128 per year.
Assume the two purchases pass away at age 80. If that is the case, when they pass away, the first purchases paid $14,040 in total premiums while the second purchaser paid $12,408 in total premiums.
Now, had the individuals paid into the plan for 20 years each, the first purchaser would have paid a total of $14,040 in premiums while the second purchaser would have paid $22,560.
That said, if you pay into it for the same amount of time, it is better to purchase sooner rather than later.
Best Burial Insurance Companies For 60 Year Olds
Tips for Finding the Best Life Insurance in Your 60’s
Figuring out how much you need for life insurance starts by determining whether you actually need it.
If you are financially stable, you have enough money to pay for all of your taxes and all of your expenses for the rest of your life, and you have no debt and no one financially dependent upon you then you probably don’t need life insurance. But for everyone else it’s going to be a necessity.
1. Calculating how much you need
You have to ask yourself to important questions:
There are typically three categories of resources available to your survivors when you pass away. The first is Social Security and any retirement related benefits. The second is group life insurance typically from an employer. The third or other assets and resources that you have personally.
It is important for you to understand when each of these resources will be available. For example, Social Security benefits are payable immediately after you die but only after your surviving spouse is 60 if you don’t have children. So, if you don’t have children and you pass away at 50 your spouse who is also 50 won’t have access to that money for 10 years.
Consider the three categories of financial requirement as well. The first is final expenses that they have to pay to cover your burial or funeral, the second or any debts that you leave behind, and the third our income needs that they need after you die.
2. Consider your objectives
After this you have to consider the objectives you have for the life insurance policy. Some life insurance policies offer a cash value feature whereby you can earn a small savings by having the company invest some of your premiums. If you want to use the policy to supplement retirement or the potentially earn cash value against which you can take out a loan this is something you want to consider.
3. Figuring out what you qualify for
You may have a high amount of needs and wants for life insurance, but it is important to be practical. Based on your health and age, it may be difficult to afford certain life insurance options. For people in better health, it is not too late to purchase an affordable term or permanent life insurance policy that offers the financial protection your family needs.
For those in worse health or who are older, it may be best to consider your no exam life insurance options in order to find a burial insurance policy that is both affordable and easy to get with medical conditions.
4. Determine which policy meets your needs
Essentially you can choose from a term life insurance policy, a whole life insurance policy, or a universal life insurance policy. If you need insurance to match a specific length of time or you have a limited budget term policy are going to be a better fit. But if you need something for the rest of your life and you want it to accumulate savings a whole or Universal policy will be better.
5. Do some shopping
There are plenty of ways to save money when you try to buy life insurance but remember that the cheapest policy is not necessarily going to be the best policy. Looking at short-term savings might cost you a lot more in long-term savings.
Life insurance is a very competitive business, so it is important to work with a third-party broker to help you compare the quotes from different companies. You would be surprised how significantly the quotes will vary from one company to the next usually as a result of a very specific medical condition or age.
Some companies are incredibly favorable to smokers for example and give them the same fees as non-smokers if not very similar fees. Other companies are much friendlier to people who are managing diabetes or managing their high blood pressure with medication. If you have something that might cause you to get a higher quote it is best to have a third-party broker help you compare which companies are more favorable to your situation.
You can easily compare burial insurance rates now using our free quoting tool!
6. Figure out when to pay your premiums
You get to decide whether you want to pay your premiums on an annual basis or in installments on a quarterly or monthly basis. It is much better for you to pay on an annual basis because if you pay in smaller increments they tend to charge you additional fees which ends up costing you about 10% more.
Make sure you tell your beneficiaries where you took out your life insurance policy, where they can find a copy of the policy and anything else they need to know with regard to your death benefit. It does happen from time to time that individuals take out life insurance policies and keep the paperwork in a safe place but just forget to tell their beneficiaries and if that happens you won’t be able to claim the death benefit.
There are some steps to take if you are quite positive that there was a life insurance policy and you have no proof at this juncture but it’s going to be a hassle.
Finding the Best Burial Insurance Coverage for 60-Year Olds
Once you have done some calculations on what you need, and some research on how much your life insurance costs will be, it is best to seek some professional help in order to make sure that you are getting the coverage you need. Our simple to use life insurance quote tool can help you find burial insurance quotes from dozens of the best burial insurance companies in seconds.
Our life insurance agents work independently of individual life insurance companies in order to provide our clients with the best coverage for their specific situation. Give us a call to speak with an expert about your needs, wants, and concerns when it comes to life insurance. We will be able to help you find the ideal life insurance policy for you and your loved ones.