Life Insurance 101: Is there a Life Insurance Age Limit?

If your term life insurance policy is due to expire or you're otherwise uninsured, you may be wondering if there's a life insurance age limit. Many seniors choose not to purchase life insurance because premiums increase with age, especially when preexisting health conditions are a factor.

However, life insurance could still be a good option during later life in some circumstances. Let's explore whether there's a life insurance age limit and what factors to consider before buying a policy.

Learn More About Medicare

Join our email series to receive your free Medicare guide and the latest information about Medicare.

By clicking "Sign me up!" you are agreeing to receive emails from HelpAdvisor.com

Thanks for signing up!

Your free Medicare guide is on the way.

Make sure to check your spam folder if you don't see it.

Is There a Term Life Insurance Age Limit?

Term life insurance provides coverage for a fixed term—usually 10 to 30 years, although some insurers offer longer terms. These policies are popular with people on a budget because they generally cost less per month than whole life or permanent life insurance options. Some insurers let you extend the term if you still need coverage or convert to a whole life policy when the term ends.

Term life insurance policies don't generate cash value. Instead, you pay level premiums for the entire term in return for a guaranteed death benefit if you die before the policy expires. If you outlive your policy, you won't receive the death benefit, although some companies include a return-of-premium feature. This feature allows you to claim back premiums at the end of the term, but it usually increases the cost of the policy.

You may wish to consider term life insurance as an older adult if you want to keep your premiums as low as possible and secure a death benefit for your beneficiaries. However, many companies have term life insurance age limits that could make it challenging to find coverage. Limits vary by company, and many term policies end automatically when the policyholder turns 65. Therefore, you may not be able to extend an existing term policy after a certain age or purchase a new policy if you will exceed the company's age limit during the term.

Generally, insurance companies won't sell you a term life insurance policy with a 30-year term or longer past the age of 55. However, some insurers sell shorter policies to people in their 70s or 80s.

Is There a Whole Life Insurance Age Limit?

Whole life insurance policies are permanent options that accumulate cash value. While whole life insurance is more expensive per month than term life insurance, it has certain advantages. Generally, you can borrow against the value of your policy and use your savings as an income source.

Some whole life policies, such as universal life insurance, let you change your premium payments and death benefit to reflect any changes in your financial situation. This feature could be beneficial if you're unsure of your future income, as term life insurance comes with inflexible premiums.

It may be easier to purchase whole life insurance than term life insurance in later life. Usually, companies set their whole life insurance age limit at 85 for new policies, although some will insure new applicants up to age 90.

Do Seniors Need Life Insurance?

Whether you need life insurance after retirement depends on your circumstances. For many older adults, there's little financial sense in paying life insurance premiums, and it's sometimes better to save or invest the funds instead. However, purchasing life insurance could be a sensible move in certain circumstances. Consider the following factors when deciding if you still need life insurance.

Financial Dependents

When weighing whether to purchase life insurance or not, consider your dependents. If your spouse, children or grandchildren rely on your income, they could find themselves in financial distress if you pass away. In this situation, life insurance can ensure their financial security. However, you may be better off saving your money if no one will suffer financial hardship following your death.

Assets

You may not need life insurance if you own all your major assets outright, such as your home and car. However, difficulties can arise if you still owe large amounts on your mortgage or other debts, as your spouse or family members may need to continue repaying them after your death. Purchasing a life insurance policy with a death benefit large enough to cover any remaining debts may be a sensible option in this situation.

Funeral Expenses

End-of-life costs, such as funerals and burials, can be expensive. In fact, the average cost of a funeral and burial is around $7,848, which can cause significant hardship for families when someone dies without life insurance.

Funeral expenses may not be an issue if you have enough savings or equity in your home to cover the cost, in which case you may not need life insurance at all. However, final expense insurance could be an excellent alternative to regular life insurance if you're worried about end-of-life costs and don't have dependents or outstanding debts. These policies are usually more affordable because they offer lower death benefits designed to cover the cost of your funeral, burial or cremation. Final expense insurance age limits vary by company, but most insurers accept applicants between the ages of 45 and 85.