There are many reasons to consider taking out life insurance. It can cover the costs of a funeral, or help their loved ones cover mortgage repayments and other financial commitments.
Our guide explains how life insurance for over 60s works, and what your best options are if you're looking for life cover during your golden years.
The bigger the risk is to the insurer of having to pay out, the more you will have to pay in monthly or annual premiums. Your age is going to be considered as a risk factor that is likely to increase the cost of your premiums.
However, with advancements in healthcare and general standards in living, the typical lifespan for many people is well above the age of 60. This means that finding relatively cheap life insurance for over 60s is possible.
Because of today's higher life expectancy, your age won't be the most important factor when you start applying for life insurance cover.
That doesn't mean it's not important, though. Some insurers may offer you a 'life assurance' policy, which means you will be covered for life and guaranteed a payout when you die, whenever that happens.
On the other hand, many insurers will put a maximum age limit on life insurance. This is an age agreed when you will no longer be covered and would be asked to renew your policy if you wanted further insurance.
This type of cover is often referred to as term life insurance, while any cover that offers you a guaranteed payout regardless of when you die is often known as life assurance.
Life assurance can be quite a bit more expensive than term life insurance, and if you're over 60, you will need to weigh up how much the extra cost is worth to you, considering the circumstances.
For example, if you're 65 years old and you're looking for life insurance, it's important to ask yourself how many years of cover you would realistically need - this is the 'term'. One insurer may offer you whole of life insurance, to cover you even if you die at 100 years old, and another insurer may cover you for up to 20 years from the time of the policy being taken out.
You can also choose between level term and decreasing term. Level terms means whatever sum you have agreed will be paid out regardless of when you pass away. Decreasing term life insurance policies are designed to follow a repayment mortgage, so as more is paid off the amount need to clear the mortgage declines. A decreasing term policy pays out less the later in the term you pass away so the monthly premiums are lower than for level term policies.
You will need to look at the cost, how important that final payout is for you and your loved ones, and what the fine print says under what circumstances you would be able to claim.
For instance, many insurers will not pay out if you die within a year of taking out the policy, so your actual cover may not kick in until a year or two after.
However, there are some factors you can control to get a cheaper deal on life insurance for over 60s.
The risk taken by insurers is the biggest factor in deciding how much they charge you on the monthly premiums.
To get cheap over 60s life insurance you should compare a range of policies across the market, but more importantly, you should lower the risk you pose to the insurers.
You're only going to get older, so your risk can only go higher, but if you're a smoker, drink regularly and have a poor medical history, then your risk will drastically increase.
Women may find that they get a cheaper deal than men because insurers find that they tend to live longer. Keeping healthy will improve your chances of lowering the cost of your premiums, so it's worth doing so before considering life insurance for over 60s.
Read on to find out how to get the best life insurance for over 60s that's right for you and your family.
Before you take out over 60s life insurance, consider how important the payout is. For example, if you're taking out life insurance to guarantee that your mortgage repayments will be completed after you die. Use an over 60 life insurance calculator to calculate how many years it would take you to pay it off while you're alive. This length will then give you a guide to how long your insurance policy should be.
If you need the payout no matter what, then you will probably need to get longer cover, or even whole of life insurance. Remember, the premiums will keep coming as you get older. So it's important to ask yourself if your income will be able to pay those premiums.
With many whole of life insurance policies for over 60s, premiums will either stay the same or increase – they almost never get lower as you get older.
You may need one or more of these:
Whole of life cover - life assurance that will pay out no mater how long you live
Level term life insurance - will pay out a fixed amount if you die at any point during the term of the policy
Decreasing term life insurance - will pay out a decreasing amount if you die at any point during the term of the policy (usually set to clear your outstanding repayment mortgage)
Many people with dependents have a combination of decreasing term to ensure their mortgage would be paid off and level term to replace the lost income from the person who has passed away.
But once the kids have flown the nest that level term cover may either need to be a lot less or not be needed at all. If paying off the mortgage would leave your partner comfortable with their own pension income and no mortgage to pay, you might not need any level term cover. Just having a decreasing term policy would be a big saving.
This is why it's vital that you shop around and compare the best life insurance policies for over 60s before committing to anything. Be sure to weigh up what your circumstances require and look at ways you can improve your health before beginning.