Yes, you can. While it is true that life insurance premiums become costlier as we age, many Canadian insurers accommodate seniors aged 70 and over, even if they are not in perfect health.

Seniors in their 70s can get both fully underwritten and no-medical life insurance plans. Fully underwritten plans include a paramedical exam and health questionnaire, whereas non-medical policies, at the most, require you to answer a few health questions to prove eligibility.

A traditionally underwritten plan may be a good choice if you are 70 or over and in pretty good shape. That is because these policies are usually cheaper than no-medical plans. But if you have an underlying illness, a no-medical policy might be your only option to secure some coverage.

Getting life insurance, such as term life insurance, at 70 can be expensive. We recommended talking to an advisor to get you the best deal possible and to determine how much life insurance you need based on your debts and final expenses.

Is life insurance for seniors worth it?

Is life insurance worth it? it depends on your personal and financial situation. Many seniors do not need the protection offered by universal life insurance. They either no longer have dependents or enough savings to care for them.

However, in some situations buying life insurance, such as term life insurance, in your older years makes sense.

• You still have dependents: If a loved one would be hurt financially if you passed away, you should consider putting a life insurance plan in place.
• You have debts: Your loved ones are not responsible for paying back your debts after your death. But if a spouse or partner is listed as a co-signer, what you owe will be passed on to them. You may need universal life insurance if you have a loan that a loved one will inherit. If you suddenly pass away, your survivor can use the death benefit to pay off the creditor.
• You want to cover final expenses: Funerals can cost upwards of several thousand dollars. If you do not want your family to pay those costs, a small term life insurance policy could be a good option. Final expense life insurance policies are particularly beneficial for seniors, as they can specifically allocate funds to cover funeral costs while also serving other financial needs. When the time comes, they will be able to grieve rather than worry about funeral expenses.
• You want to cover end-of-life care expenses: If you end up needing hospice care, in-home care, or faculty-based care, that could leave your family with a large amount of medical debt after your death.
• You want to leave a gift: Do you want to leave a gift for your children or grandchildren? Life insurance, such as term life insurance, is a terrific way to do this, as the beneficiary generally does not have to pay tax on the death benefit.

Getting insurance without a medical exam

Traditional life insurance policies involve a medical exam, which is just like a routine health checkup. It allows insurers to assess your risk level thoroughly and set life insurance premium rates appropriate to your risk profile. But you can opt for a no medical exam policy if you have one or more pre-existing conditions. As the name suggests, such plans do not require you to undergo a medical test to prove insurability.

A no-medical policy might also be a terrific choice for seniors who have needle phobia or who do not want to take a life insurance medical test for any other reason. However, the downside of these policies is that they are generally more expensive than fully underwritten plans. Additionally, guaranteed acceptance life insurance is specifically designed for seniors with pre-existing conditions who may struggle to qualify for standard life insurance policies.

Simplified vs. Guaranteed Life Insurance

The two most common types of no-medical life insurance are simplified and guaranteed issue life insurance. Both let you forgo the medical exam, but their key differences exist. When considering these options, it's important to determine how much coverage you need based on factors like age, health, and financial responsibilities.

Simplified Issue Life Insurance

Simplified issue life insurance involves minimal underwriting. You must answer a few health questions related to your health and lifestyle but do not have to undergo a medical exam. As a result, it is a great option for seniors who have pre-existing health conditions but are otherwise in decent health.

Applying for a simplified life insurance policy and getting approval is easier, faster, and painless. However, these conveniences come at a price. Simplified issue policies are much costlier than those requiring a medical exam. They also usually have smaller death benefits. While a few insurers may offer simplified issue plans with over $500,000 in coverage, most cap the death benefit at $100,000.

Some simplified issue plans have a waiting period of two years. If you pass away during this period, the insurer will not pay the death benefit. Instead, it will refund the premiums paid into the policy, plus interest. The waiting period, however, does not apply to accidental deaths.

Lastly, not every person who applies for simplified issue life insurance is approved. If your answers reveal that you are too risky to insure, the insurer may reject the application.

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Guaranteed Issue Life Insurance

If you do not qualify for traditional life insurance or simplified issue plans, buying a guaranteed issue policy is your only chance to secure some coverage. These policies require neither a medical exam nor answering health questions. Because acceptance is almost guaranteed, it is an ideal life insurance product for older adults with serious underlying medical issues.

However, the shortcomings affecting simplified issue plans also plague guaranteed life insurance. If anything, in its case, they are more severe. Since the insurer has no other information about you, apart from age and gender, that it can use to calculate your life expectancy, a guaranteed issue is more expensive than a simplified issue of life insurance.

Additionally, these policies offer smaller amounts of coverage, usually not more than $25,000 or $50,000. In most cases, the payout is sufficient for paying for end-of-life expenses but not enough to cover debts, replace the deceased's income, or leave an inheritance.

Nearly all guaranteed issue policies include a waiting period, which is usually two years. That means you must hold the life insurance policy for at least two years before it pays the full death benefit. If you die from a natural cause during the waiting period, your beneficiary will only receive the premiums plus interest.

Other Types of Life Insurance for Seniors

Seniors, especially those in good shape, can choose from a full range of products — term life insurance, whole life insurance, and universal life insurance.

Term Life Insurance

If you are healthy and do not mind a medical exam, term life insurance is a good, low-cost option. Since the coverage is for a limited period, it is most suitable for providing a financial safety net for dependents or covering debts, like a mortgage, should you pass away during the term life insurance policy term.

If you are shopping for term life insurance in your 70’s, you will likely get approval for only a 10- or 15-year term. Life insurers generally do not offer longer term life insurance plans, say 20 or 30 years, to applicants aged 70 and over.

Whole Life Insurance

Unlike term life insurance, whole life insurance covers your entire lifetime. Moreover, these policies build cash value over time. You can tap into it while you are still alive. When you die, your beneficiary receives only the death benefit amount — not the unused cash value.

However, whole life plans are significantly costlier than term life insurance, especially if you buy one later in life. Additionally, since cash value typically grows slowly in the first few years, if you buy a policy in your 70's, you might not live long enough to be able to live off it. For these reasons, whole life insurance is rarely a great choice for someone in their 70's.

Guaranteed Universal Life Insurance

Guaranteed universal life insurance (commonly known as GUL) looks and feels a lot like a hybrid between term and whole life insurance, offering lifelong protection at an affordable price. When it comes to low-cost permanent life insurance protection, GUL is hard to beat.

GUL policies have little or no cash value and hence are much cheaper than whole life insurance. You are basically paying to maintain lifelong coverage. And unlike a term policy, which you may outlive, a GUL will pay the death benefit no matter when you die.  

Final Expense Insurance

Also called funeral insurance or burial insurance, final expense insurance is a type of permanent life insurance meant to help your family pay off funeral costs, burial costs, and other end-of-life expenses. Today, funerals cost on average $7,000 to $10,000 in Canada. If you do not want to burden your loved ones with the cost after you are gone, final expense insurance is worth considering.

These policies are popular among people in their 70s because they typically do not require a medical exam. Coverage is issued based on your answers to a few health-related questions. Also, premium rates are generally more affordable than other life insurance products because the death benefit is much smaller, usually $10,000 - $20,000.

How much does it cost?

Your premium rates depend on factors like age, gender, health, policy type, and coverage amount. However, two things are certain:

• You will pay significantly more for life insurance in your 70’s than what you would have paid in your 40’s or 50’s
• Life insurance premiums rise considerably for every year you delay buying it in your 70’s

When considering life insurance, such as term life insurance, it’s important to determine how much coverage you need based on your age, health, and financial responsibilities.

Here are some examples of the premiums you may pay in your 70’s.

A 70-year-old healthy man may pay $195 a month for a 10-year term life insurance policy with a $250,000 death benefit. The same life insurance policy, however, may cost $148 a month for a healthy 70-year-old woman. On the other hand, a guaranteed issue life insurance policy with a coverage amount of $10,000 may cost $81 a month for a 70-year-old man and $61 for a woman.

Here are some examples of the premiums you may pay in your 70’s.

A 70-year-old healthy man may pay $195 a month for a 10-year term life policy with a $250,000 death benefit. The same policy, however, may cost $148 a month for a healthy 70-year-old woman. On the other hand, a guaranteed issue policy with a coverage amount of $10,000 may cost $81 a month for a 70-year-old man and $61 for a woman.

Conclusion

Life insurance is a great way to financially protect a dependent or help your family cover final expenses. Several coverage options are available to people who are in their 70s, including term life insurance, whole life insurance, and universal life insurance. And depending on your health, you might even get relatively low-cost rates for your life insurance.

If you are 70 or over and looking for affordable life insurance, get in touch with a Dundas Life advisor. We can help you find the best coverage at a great price.