When we are young, able and healthy, the requirement of life insurance doesn’t look prominent to us. Those who understand that life at old age would not be so free in terms of finance make the right decision and buy life insurance in time.
However, those who tend to ignore this thought often end up in regret when they face financial dilemmas. We must understand that buying life insurance is not an open option forever.
Typically people tend to buy life insurance policies under the age of 50 but that is not the cut off age for it. As the human rate of mortality has exceeded the age limit the need for buying life insurance too has surpassed.
Talking clearly in terms of cut off age for buying life insurance, one can say that it entirely depends on company to company. There are guidelines to specify the entry-level age for buying insurance as per the plan that you may want to buy.
There are policies that do not allow one to buy beyond the age of 65 while there are options that may allow one to buy a policy at the age of 90 as well.
Usually, the age limit for buying term life insurance plan is lower than a universal life insurance policy. There are certain factors that must be taken into consideration while planning to buy a life insurance policy at a later age:
- Premiums become costlier when one age.
- There are limitations in choices for the types of plans that you want to buy and those available.
- Burial insurance is possible even at the later age of 85 to 90 years.
- Term life insurance is generally not offered beyond 75-80 years of age.
- Whole life insurance or universal insurance can be bought at higher premium rates when you exceed the age of 80 years.
Let us discuss these points in detail
If You Want to Secure the Future of Your Dependents
Before you will buy a life insurance policy, you must know why exactly you want to buy it! Mostly when we want to safeguard the financial future of our loved ones or dependants we invest into life insurance policies.
So, if you have dependents that rely on your income when you are alive, it is advisable to go for life insurance. There are various family situations where adults are taking care of their family members through earning even at a later age.
Some have their grandchildren to bring up in absence of parents while others have to contribute to the family funds given to the poor financial or health condition of their children.
You can buy life insurance even until the age of 90 but as we have mentioned above that the type and amount of benefits may vary.
If you are above the age of 80 years, it is more likely that you will not get a term insurance policy. The universal life insurance plan will be a better option in this case.
There can be other options as well such as “no medical exam, no waiting period” policy that can be considered. However, it will be even more expensive.
If You Want to Buy a Funeral or Burial Expense Policy
The most commonly found reason for people above the age of 80 to buy life insurance is for covering their funeral or burial expenses.
There have been various reasons that the senior citizens do not want to be a burden on their children and desire to depart from the world on a happy and dignified note. This can be one lifestyle choice as well. Therefore, quite often the people who exceed the age limit of 70-80 years enquire about burial expense policies.
Usually, the cut off age for such policies is around 90. You can easily buy such policies without much questioning or intervention as the purpose is very clear.
Which Type of Life Insurance Policy Would You Buy?
In general, life insurance policies have been categorized into two types-
- Term life insurance
- Whole life insurance
In term life insurance there is a period-specific limitation. After a certain period of time, the policy gets matured and you get the money back as promised at the time of policy issuance. The advantages of buying term insurance are its lower premiums and higher rates of interest.
In most of the cases, it has been observed that companies do not offer term life insurance to anyone who crosses the age of 75 (or 80 to a maximum extent). But as we have specified above, the term life insurance promises a certain amount of money on the completion of its term.
When you would have already crossed the age of 80 years there will hardly be any financial commitments for you to fulfill and therefore the money may not be a priority. The concern is more towards ensuring a better financial future of your loved ones, paying off any pending debts or arranging for your burial expenses while being alive itself.
This situation enables you to consider the whole life insurance policy as a preferable option to purchase. Whole life insurance offers coverage until the age of 100 years and you can buy it even if you are 80-85 years. This policy can suffice the purpose in your mind where you want to maintain dignity more than affording a comfort.
The cut off age for life insurance policies vary from policy to situation. It mostly depends upon what you are looking forward to fulfilling, at what age!
Most of term life insurance policies provide a cut off age of 75 years, while it is 80 years for whole life insurance plan. While the coverage in the former is limited to a specific time period the same in the later is mostly life-long unless mentioned hitherto (in some cases they specify 100 years)!
Final expense policies or burial insurance plans are a very good option while considering policies in later years of life. The cutoff age may vary but it is always advisable to buy a life insurance policy at the earliest.