What are your best life insurance options when you’re aged over 60? Read our guide to learn more about life insurance for over 60s and find out if it’s right for you
There are many reasons to consider taking out life insurance. For some life insurance can help their family cover the costs of a funeral after they die, 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 are looking for life cover during your golden years.
Life insurance over 60 explained
As you might expect with any type of insurance, 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.
The same is true for life insurance and if you are in your 60s or older, then 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 does not 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 for seniors over 60. 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 pay out regardless of when you die is often known as life assurance.
Life assurance or term life insurance for over 60s?
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 are 65 years old and you are looking for life insurance, it’s important to ask yourself how many years of cover you would realistically need. 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 will need to look at the cost, how important that final pay out 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.
How do I get cheap 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 are only going to get older, so your risk can only go higher, but if you are 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 only 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.
Finding the best life insurance for over 60s
Before you take out over 60s life insurance, consider how important the pay out is. For example, if you are taking out life insurance to guarantee that your mortgage repayments will be completed after you die, then calculate how many years it would take you to pay it off while you are alive. This length will then give you a guide to how long your insurance policy should be.
If you need the pay out 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 keep up.
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 should then decide if you want the maximum cover available or a more balanced type of cover. The maximum amount of cover from an insurer will usually pay out higher but often with larger premiums, while balanced cover is likely to pay out less if you die early as you pay less in premiums.
One of the most important things to be aware of with life insurance for over 60s is that the policy does not have a cash value – your premiums are invested, and your pay out is a return on that investment.
This could result in you paying more in premiums than you get as a pay out. For example, if your policy has maximum cover and you pay a high amount of premiums for 30 years, the pay out your beneficiaries will receive after you die might be high enough to cover all of the expenses you wanted to cover, but it may still work out lower than the amount you paid up front.
This means it’s vital that you shop around and compare the best life insurance policies for over 60s before committing to anything. Be sure to also weigh up what your circumstances require and look at ways you can improve your health before beginning.
Use uSwitch’s comparison tables to help you find life insurance for over 60s.
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