It's easier to qualify than in the past as underwriting has gotten better. There are options available in your later years, says Yahoo Finance’s recent article entitled “Retirees, It's Not Too Late to Buy Life Insurance.”
Your health risks and the type of life insurance, whether term or permanent, impacts your premium as well as your chances of qualifying. Because medical underwriting differs by insurer, you should have some idea of what companies seek in applicants before shopping around for a policy.
While life insurance proceeds are considered part of your estate, the money is taxed only if the estate's total value is more than $11.7 million under present law. The policy can also be used to cover funeral costs, medical bills and probate court fees after you pass away.
Buying life insurance can also boost a surviving spouse's income, especially if one Social Security check won’t be enough. It could make even more sense if you have a pension. When retirees start taking their pension, they must decide if payments should continue for their spouse after they die. Selecting the survivor benefit decreases the pension payments by 10%.
Life insurance may be easier for seniors to get, but it's not a certainty. Most policies require health underwriting. Therefore, the insurer will review your medical history to determine if you qualify and at what rate. Unless you’re terminally ill, you have a decent chance of qualifying, even with a health condition, but you'll probably pay a higher premium.
Before applying, you should also proactively manage your health. Insurers will consider if an applicant is attempting to live their healthiest life and it can make the difference between qualifying or not.
Each life insurance company has different guidelines, such as making diabetes less of a risk than another company or define smoking differently. An insurance broker who represents several companies often knows the nuances of each company's guidelines and can match you with the best fit.
You can also apply directly with multiple insurers for quotes, but it takes more time. Some financial advisers also specialize in life insurance and can help you.
If you're unsure that you'll qualify, experts recommend still applying.
Even if it's a 50/50 shot, you should apply. There’s no cost, and if you aren't happy with the offer, you don't have to accept it.
The health review may also uncover a medical condition.
Reference: Yahoo Finance (Aug. 17, 2021) “Retirees, It's Not Too Late to Buy Life Insurance”