If you haven’t gotten your insurance locked in before the age of 70, the premiums are going to increase drastically. Although the increase starts at the age of 60, it isn’t all that visible as you pay a part of the inflation rate and changes to the cost of living when your premiums go up.
Seniors who are over 75 have lots of options to pick from for life insurance. An overwhelming majority of the insurers will offer whole life insurance since it will be the most profitable option for them and it looks attractive on the surface. However, we strongly recommend going with a 10-year or 20-year term life insurance if it’s available for you.
The main reason why we don’t recommend whole life is that you basically pre-pay your own death benefit. Sure, you heard all those good marketing campaigns about how you can ”borrow” money from your savings for any reason, but is that even a good thing?
Paying interest on your own money
The main problem with whole life insurance is that if you take money from your savings, you will have to put it back and even if you put it back the next day, you are going to pay interest on that money. If you want a simple fix to this, we strongly recommend opening up a savings account and link it with people that you want your money to go to rather than relying on the death benefit.
However, doing this won’t be the perfect option as the money that your beneficiaries will receive will be subjected to taxes while the death benefit is tax-free. So we strongly recommend going with term life insurance as you can get up to 20-year policies. Also, it is going to be the most affordable life insurance for seniors over 75 as the prices won’t exceed $2,500 per month for $500,000 in coverage for 10 years.