Life insurance for seniors

Availability is not the problem

People approaching this stage often assume the market has closed to them. It has not.

Fully underwritten coverage is widely available in your sixties. Term policies of 10 and 20 years are typically still offered, and permanent coverage is issued routinely. What changes is that 30 year terms generally stop being available, prices are higher than they were at forty, and insurers ask for more medical evidence.

The most expensive mistake at this age is assuming full underwriting is out of reach and going straight to a guaranteed issue product. Those exist for people who genuinely cannot get anything else. For someone in reasonable health at 63, they are a poor substitute for a policy that would have been issued on ordinary terms.

The harder question is whether you need it

By this stage the obligations that drove the original purchase have often gone. The mortgage is paid or nearly so. The children are working. The household spends less.

If that describes you, and your savings would comfortably cover a funeral and settle your estate, it is entirely reasonable to conclude the job is done. Continuing to pay for a large death benefit out of habit is not automatically sensible.

Where a need genuinely remains, it is usually one of these:

Final expenses. Funeral costs and the immediate expenses of settling an estate, so nobody has to find the money quickly or wait for probate. See final expense insurance.

An estate tax bill. Death triggers a deemed disposition of capital property in Canada, and a cottage or a non-registered portfolio with large gains can produce a substantial bill the estate has no cash to pay. This is the clearest case for permanent coverage at this stage. See estate planning.

A dependant who will not become independent. An adult child with a disability, or a partner whose own retirement income would not be sufficient without you.

Replacing a survivor pension shortfall. Some pensions reduce substantially or stop on death. Whether yours does is worth checking, because it changes the arithmetic for a surviving partner.

A business obligation that has not been unwound. See key person and buy-sell coverage.

Each of those points to a different amount, and most of them point to a smaller amount than you carried at forty.

If your term policy is expiring

This is the most common reason people in their sixties look at this at all, and it needs starting a year ahead rather than a month.

Four options exist: let it renew at a much higher price, convert it to permanent coverage if the deadline has not passed, apply for a new policy, or let it end. Which is right depends on your health and on whether the need remains.

Two things to know. Renewal prices rise sharply, because renewal pricing assumes the healthiest people leave and buy fresh. And the conversion deadline usually arrives before the term ends, often at a set age such as 65 or 70, so it is entirely possible to hold a policy with years left and no conversion right remaining.

Find your expiry date and your conversion deadline now. See what happens when your term ends.

Term or permanent at this age

The usual rule applies: match the product to whether the need has an end date.

If the need runs for a defined period, such as supporting a partner until their own pension improves at a known date, term coverage does it far more cheaply.

If the need genuinely lasts for life, such as an estate tax liability or final expenses, term coverage bought at 63 and expiring at 83 does not solve it. Permanent coverage does, and Term to 100 provides the death benefit at the lowest permanent cost if you have no interest in cash value.

Health

Applications at this age involve more medical evidence, and that is routine rather than adversarial. Expect a paramedical and often a request for your doctor’s records.

Most conditions common at this age, including treated blood pressure, controlled diabetes and a cancer history well in the past, do not prevent coverage. They may produce a rating, and a rated fully underwritten policy is normally still much better value than a no-medical alternative. The health conditions section covers what drives each assessment.

Beyond seventy

The product set narrows further, and coverage remains available. See life insurance over 70.