Not everyone needs life insurance at age 66. But if you do, a little preparation and research into your options can save you thousands of dollars.
Quick Summary
There are simple ways to make sure you pay as little for life insurance as possible. One of the best is getting quotes from an independent agent. For example, you can use the free Instant Quotes tool on the left to compare quotes from different companies right now.
Even health issues don’t have to be a barrier to affordable life insurance. Just be upfront with your agent and do a little research ahead of time.
Frequently Asked Question: Do I need life insurance after 65?
Not everyone needs life insurance once they enter their golden years. Life insurance is meant to protect your family in the event something happens to you. If you are retired, and nobody is financially dependent on you, then your money may be better spent elsewhere.
While you might have fewer financial obligations than you did a decade ago, the reason for life insurance remains the same. If someone you care about would be financially worse off with your passing, you should consider life insurance. This could be anything from your spouse still working to not having enough cash to cover funeral expenses.
How to Save Money on Life Insurance at age 66
There are several methods for saving money on life insurance. They’re all fairly straightforward too.
Use a Life Insurance Needs Calculator
Once you determine that you have someone you might want to protect with life insurance, the next step is figuring out how much you need. 30 years ago, an insurance agent might tell you to get five times your annual income. Some agents suggest 3x, others 7x.
Use an insurance needs calculator to make sure you aren't buying too much.
None of this takes into account your unique financial situation, nor the status of your dependents. When you use a free tool like a life insurance needs calculator, you can look at the exact dollar amount you need to protect different aspects of your life.
Get Quotes from an Independent Insurance Agent
Life insurance companies must set their pricing with the state. So anyone who sells a life insurance product will have the same prices as everywhere else.
That leaves two options. Make dozens of phone calls to different agents each representing one company, also called captive agents. Or you could make one phone call to an independent agent who can work with dozens of companies and do the comparison shopping for you.
Captive agents work for one insurance company. They can’t sell you a policy from anyone else. That severely limits your ability to find the company with the best underwriting guidelines for you. A company can offer several products, but if they overcharge for diabetes, it’s tough luck.
Independent agents work for their clients. They use their experience and reach to find the few best companies for each situation. Then they can do the majority of your research for you to help you make the best choice possible.
You Can Requalify, Renew, or Convert an Old Policy
If you currently have a life insurance policy, you still have options. So don’t let it lapse before you examine if it's best to requalify, renew, or convert your current policy.
Requalifying means going through underwriting again with the same company or a new one. You have a new medical exam and everything. It’s the same as not having an old policy at all.
However, requalifying presents an advantage if you are healthier now than when you purchased your last life insurance policy. You will still pay higher premiums due to age, but you might be able to earn a better health class.
Renewing a term policy means you roll your old term policy into a new term policy. Your rates will be updated for your age, but you’ll keep the same health class and skip underwriting. Not all companies offer this. You will have to look back through your current term contract to see if you have this option.
Converting an old term policy into a permanent policy is a more commonly available option. Like renewing, there is no new qualification procedure. Just fill out the appropriate paperwork with your agent, and you are all set.
Both renewing and converting present advantages if your health may not be quite as good as it was when you first purchased life insurance. Questions? Call us and we'll point you in the right direction.
Term Versus Permanent Life Insurance
The best way to choose between the two major categories of life insurance is to ask yourself why you are buying life insurance. If you only need a policy for a few years until your spouse retires, term makes the most sense.
On the other hand, if you need something to offset estate taxes, permanent is a better choice for that purpose. However, permanent life insurance can be more than 10 times as expensive as the same amount in a term policy.
There is a third option which has emerged in the insurance market over the last couple of decades and is gaining in popularity, burial insurance. Since many families don’t have the $8,000 it costs for the average funeral and burial in the United States, an inexpensive burial insurance policy can cover this costs for a fraction of even a term policy. It also lasts for life.
Comparison Shop Based on Pre-existing Medical Conditions
Every life insurance company has different underwriting guidelines for every medical condition. It’s a combination of their data, research, and risk tolerance. Even for the same medical conditions, rates will vary between companies.
If you’re looking for life insurance with a pre-existing condition, then it needs to be a part of your comparison shopping process. Don’t just pick a health class and compare rates between companies. Talk to your agent to see which companies offer the best deals to people with that condition. It can make a difference of thousands of dollars over the course of your policy.
Quotes for Term Life Insurance for a 66 Year Old Man
The following table shows rates for a 66 year old man in relatively good health (preferred) who doesn’t use tobacco. Your prices may differ.
Men | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
10-Year Term | $71 | $153 | $298 | $570 |
20-Year Term | $153 | $326 | $622 | $1,215 |
Quotes for Term Life Insurance for a 66 Year Old Woman
The table below gives rates for a 66 year old woman in good health. Again, these are non-tobacco rates. If you’re in excellent health, your rates could be even lower.
Women | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
10-Year Term | $51 | $96 | $171 | $327 |
20-Year Term | $111 | $229 | $426 | $801 |
Permanent Life Insurance
Most people in their 60s are looking at permanent life insurance to cover final and estate expenses. The primary reason for term insurance (children) are all grown up and more or less financially independent.
Aside from lasting your entire life (or until age 121), permanent life insurance policies have a cash value accumulation component. A portion of your premiums each month goes toward the cash value of your life insurance policy. This grows beyond what you contribute to it. You can use the cash value of the policy as a no-questions-asked loan, have it pay your premiums during financial troubles, or cash out the policy if you no longer need it.
There are several types of permanent life insurance. Whole life is the most common. It has a low, but relatively stable cash value growth. Universal life insurance is another type of permanent life insurance with the ability for more aggressive cash value growth. However, the growth can slow or stall in economic downturns.
Burial Insurance (aka Final Expense)
Burial insurance is a newer type of life insurance that focuses solely on paying for burials, cremations, and memorial services. The average cost of a memorial service and burial is just under $8,000 in the United States. Cremation and memorials can be slightly less, but the average is also close to that $8,000 figure.
Many funeral homes will allow you to pre-pay for these services, even in installments. Life insurance recently caught on to this idea and created insurance products to cover these. Burial insurance (also called final expense) works like any other insurance policy. The only difference is that the death benefits are much smaller.
Most people choose $10,000 - $25,000 in benefits. That covers all the final services arrangements and leaves a little left over to pay any surprise expenses that come up. The beneficiary is typically the person who will be in charge of the funeral arrangements.
Life Insurance with Pre-Existing Medical Conditions
The key to getting life insurance with any sort of medical history is first to tell your agent. That is one of the best ways to save money on life insurance.
Beyond that, the insurance agent will want to know all of the pertinent details to choose the best company for you. Some conditions like high blood pressure are common as you age. These can affect your life insurance rates, but for the most part, have little impact.
Other conditions, like diabetes, can have a significant effect on your rates. To make sure you find the company with the lowest prices for any medical condition you will want to have all of the following information on hand:
- Date of diagnosis
- Type and severity of the condition
- Treatment methods
- Medications
- Dates of any hospitalizations
You can get an idea of what your health class might be for many common medical conditions on our pre-existing conditions page.
Guaranteed Issue Life Insurance
There is a type of life insurance that approves everybody. As long as you are over 18 and under 75, you qualify.
This is a last-resort style of life insurance for people who cannot qualify for a traditional policy. The benefits are lower, and the premiums are higher than regular life insurance. But it’s still several steps above nothing.
There is no medical exam for a guaranteed issue policy and few to no medical questions. Most applications get approved within 72 hours, if not 24.
The critical thing to understand about a guaranteed issue policy is the graded benefits. Make sure your beneficiary understands how this works as well if you choose this type of life insurance.
Graded benefits have tiered payouts. Since they cover people who are terminally ill, the life insurance company risks going out of business if they pay the full death benefits within the first year or two of a person owning this policy.
On the other hand, they don’t want to create a situation where a family loses money and gets less back in death benefits than they paid in premiums. The amount of money the beneficiary receives increases as long as the person the insurance covers lives for a couple years after they take out the policy.
Most policies usually look something like this.
How Long You've Had the Policy | Benefits |
|---|---|
1st Year | 110% of premiums paid |
2nd Year | 110% of premiums paid |
3rd Year | 100% of death benefits |
Conclusion
To compare rates from different companies, use the free Instant Quotes tool on the left. It’s at the top of the page if you’re on mobile.
If you have any health conditions, it’s best to work with an independent agent who can find the companies charging the least amount for your medical history.
How Abrams Insurance Solutions Can Help
We are a small group of independent life insurance agents working to connect families with the best and lowest cost insurance policy for their needs. We pride ourselves on going the extra mile and advocating for our clients with underwriters to make sure their health class is a fair reflection of their health.
There is a bunch of information on life insurance out there, and it can be hard to cut through all the jargon. If you ever have any questions, please give us a call at (888) 905-0333. There is never any obligation to buy.
For other ages, see our comprehensive guide on life insurance at every age or life insurance over 60.
The post Pro Tips on Affording Life Insurance as a 66 Year Old – Get the Best Rates appeared first on Abrams Insurance Solutions.
* This article was originally published here
