Are you 80 years of age or older, or know someone who is, and find yourself struggling in life without enough savings and minimal assets? That doesn’t mean you’re not entitled to some form of life insurance coverage or an adequate equivalent.
In fact, too many octogenarians may not even consider applying for life insurance coverage because they think that they may be too old to apply.
Still, you must be extremely realistic and accept that life insurance options will be extremely limited in availability and scope.
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Table of Contents:
- Improving Your Odds
- Before You Apply
- Life Insurance Options for Octogenarians
- Pre-Planned Policies from Funeral Homes
- Life Insurance Restrictions for Seniors Over 80
Improving Your Odds of Life Insurance Approval
If you have decided to apply for life insurance at 80, then the success of your application efforts will depend on specific, non-negotiable pre-application conditions pertaining to your life, habits and health:
Do You Smoke?
Unless you stopped smoking a decade or so before applying, your available life-insurance options will shrink dramatically. There are not many reputable life insurance companies that will offer octogenarians who smoke cigars or cigarettes regularly life insurance policies of real significant value.
Do You Exercise Regularly?
Do you practice yoga or take regular walks? You will have to be in pretty good physical condition and very healthy, relatively speaking, for an octogenarian. The human body breaks down as we age. Most people in their 80’s, statistically speaking, will have endured some form of major surgery, like hip replacement or heart surgery, or endured some major ailment or disease.
As an octogenarian applying for life insurance, you will most certainly be required to undergo medical testing and evaluation to prove your eligibility for coverage. If you are in less than optimal health for an octogenarian, than be prepared to shop around significantly.
Where Do You Live?
If you live in New York, California or another large financial capital state in the U.S., then the average funeral and burial could cost anywhere from $8,000 to $10,000. In rural and suburban cities and in smaller, Mid-western and inland states, the average cost of a funeral could start at $1,000, more or less.
Do Your Homework Before You Apply
Shop around and compare costs. Knowing the current market state of the life insurance and funeral business in your area could save you thousands or tens of thousands of dollars.
You will be limited in the amount of life insurance coverage you can take out. You will have to be very healthy, undergo intense medical evaluations, meet numerous pre-condition and be very lucky to qualify for life insurance products valued over $30,000 at age 80.
How Much Does Life Insurance Cost After Age 80?
On average, a healthy and eligible octogenarian could face spending between $80 to $100 a month for a basic, bare bones $10,000 life insurance policy. For a $25,000 policy, that price can soar to over $200 a month in premium payments. For a $50,000 policy, an average monthly premium could be in the neighborhood of $400 a month.
Do you know that your beneficiaries will have to wait 2 to 3 years before receiving death benefits? It is a standard policy death benefit waiting period that applies for elderly people looking to become insured. You will have to deal with this condition with any life insurance company willing to insure an 80-year-old.
Death benefit payments for your beneficiaries may be dramatically reduced because of your age.
Always Read the Fine Print
Some life insurance policies can be designed to self-cannibalize themselves after a certain age. After you reach 70 or 80, the policy may pay for itself by siphoning payments from your premium cash value, reducing death benefit value until the policy cannibalizes itself.
Make sure that you contact one of our qualified and independent insurance agents or affiliate companies via our rate finder form which you will find on this page. They will help you to navigate the intricacies and bureaucracies of the life insurance application process.
Life Insurance Options for Octogenarians
Selling life insurance is a business. A life insurance company want you to pay more in premiums over years and decades than they have to pay out in death benefit payments.
Some life insurance companies pay out a dividend or annuity based on the stock market and investment performance of the company. Premium amounts are partly set on such investment and financial factors.
They would rather sell life insurance products to young and middle-aged people for decades over selling insurance to the elderly, especially octogenarians, for a relatively shorter period of time.
Consider researching and applying for the following policies:
- Whole Life Insurance
- Guaranteed Life Insurance
You can also consider Pre-Paid Funeral Plans and getting advice referrals from your local Volunteer and Community Advocacy Groups that specifically help the elderly.
Whole Life Insurance
Whole life insurance has a coverage span that lasts your entire lifetime. As long as you pay the premium you don’t have to worry about the policy lapsing.
Whole life insurance policies can gain greater cash equivalency cash value over time. You may be able to take out a loan against the value of the policy.
Here are some additional factors to consider:
- You can defer taxation of the policy, it’s cash value equivalency or death benefit payments.
- This type of policy is more expensive than other types and will be more so for an octogenarian.
- There probably won’t be a lot of flexible or adaptable policy options.
- You probably won’t be able to increase or decrease the amount or level of coverage you sign up for.
Unless you are willing to pay more in premium cost, a basic life insurance package may be the best route to go.
Guaranteed Life Insurance
This is the kind of life insurance coverage that is marketed in those TV commercials pitched by game show hosts and celebrities. It is hard to be turned down for this kind of coverage. Also, there is no need for a medical exam or physical.
The rate of premium will be decided by the company. Expect to pay more than the average because of advanced age. Shop around and get the best quotes before signing on a dotted line.
There will definitely be a 2 or 3-year mandated waiting period before any death benefits are paid out. The company doesn’t want to pay out until they are sure fraud isn’t involved.
Also, insurance companies like to tend to their investments and cater to regular premium paying policyholders before paying out to their elderly customer demographic.
Guaranteed Life insurance plans offer a graded payout option. Death benefits can be paid out in percentage increments from year to year. Death benefits can be paid in refunded premiums in the first year. The next year, 25 percent benefit of the cash of the policy can be paid out and so on. This way, full payments are made in increments.
Save $100 a Month Until You Find the Right Plan
You can put away $100 a month in a good bank savings plan.
Hold onto the money until you find a life insurance policy that works for you. Shop around. Be picky. Find coverage suited to your needs, even if you have fewer options.
Buy A Pre-Planned Funeral Policy Directly from a Funeral Home
This is where you would set up a payment plan system directly with a specific funeral home or through your life insurance agent.
- You are basically setting up a pre-payment lay-away plan for your future funeral. Or with the aid of an insurance agent, setting up a basic insurance plan directly with the funeral home.
- Know that there probably won’t be a refund policy or flexible options. It may be a life insurance plan, but you are dealing with a funeral home, not an insurance agency.
- Employing a budget conscious mindset when pre-planning your own funeral arrangements may be the best option.
- How fancy, indestructible, luxurious and expensive does your coffin need to be? Think about what you are spending money on.
- If you change your mind or decide to move to another city you will lose your money and possibly end up paying more to make up for it. A funeral home is not an insurance company. Any deal you make will not be adaptable or refundable.
Non-profit, volunteer and community advocacy groups for the elderly may be able to refer you to an affordable funeral director or knowledgeable insurance agents as well.
The Reality For Seniors Over 85 In Need Of Life Insurance
Most life insurance companies wouldn’t accept applications from applicants over 89 or 90.
There are many more who would consider 85 to be the cutoff age for applications as well.
Short term, high premium profits would not benefit the life insurance company in the long term. Most people only live to be 80 years old. In fact, most men only live until their mid or late-70’s.
Still, the life insurance industry is a business. There are agents and companies that will sell to the mid and late 80’s octogenarian demographic.
Policy Restrictions for Seniors
It’s just that such life insurance coverage offers lean benefits packages, much leaner death benefit payment sums, non-flexible policy options and severely restricted terms of coverage.
If you die within 2 or 3 years of the policy activation, then all potential or future death benefits are voided. Your beneficiaries will be paid out the remaining value of the premium or interest from cash equivalency account value, if applicable.
- Octogenarian-friendly insurance coverage will only offer specific, stipulation-centric coverage but not full coverage.
- Octogenarians are prone to falling and having accidents, statistically speaking. So you may be offered simple, temporary or expensive coverage plans that protect against slip and falls or accidents that occur in the home.
- Whole life insurance is prohibitively expensive for applicants aged 65 or older. More so for people over 85.
- For elderly policyholders, there are strict, industry-wide provisions concerning death benefit payments. Also, the exact day and time of death of a policyholder proximate to policy signing can affect the standing of a policy
- If at 85 you bought a life insurance policy and died at 94, years removed from the first 2 years of policy activation, your beneficiaries will still have to wait a year probationary period before being paid death benefit.
Death benefits for your beneficiaries will be much smaller in size, compared to younger policyholders, unless you can pay high premium prices.
Life Insurance For Those 85 And Older
If you are buying life insurance at the age of 85 or older, then statistically speaking, you are probably not going to live long enough for the policy to accrue cash value or enable you to make the most out of flexible contract coverage options.
You need to sit down with an independent life insurance agent and seriously consider what it is you want out of a life insurance package.
Most seniors over 80 purchase around $7,000-$10,000 of burial insurance coverage to take care of their final expenses.
If you’re in a situation where you’ll leave someone burdened with your burial costs, do the right thing and get that peace of mind.