Seniors Life Insurance: Six Factors to Consider

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Seniors Life Insurance Tips
There Are Many Life Insurance Options For Seniors

It has long been a popular belief that by the time we are ready to retire, we will be debt free and have a bank load of money to spend any way we like, so there would no longer be a need for life insurance. Unfortunately for many Canadians, life didn’t turn out that way. More and more seniors are carrying debt into retirement. According to a recent debt study by Hoyes, Michalos & Associates Inc., trustees in bankruptcy based in Ontario, the percentage of seniors with debt increased by nearly 60% over the past 10 years. This leaves a heavy burden on surviving family members.

But it’s not always easy for seniors to get life insurance – that is why you need a specialist who is focused on life insurance for seniors.

The Canadian marketplace has changed dramatically for seniors looking for life insurance. Premiums have gone down in most instances, but at the same time, insurance companies are looking more closely at certain risk factors such as lifestyle and travel.

According to the World Health Organization (WHO), the average Canadian male born in 2012 can expect to live to 80 and females to 84. In comparison, males born in Canada in 1990 have a life expectancy of 74 and females of 81 on average.

WHO claims, “In high-income countries, most of the gain in life expectancy is because of fewer people dying before age 60 from heart disease and stroke. However, among high-income countries, the gap between longer life expectancy for women and men narrowed by one year, mainly because smoking rates for men fell more than for women.”

The Toronto Star reported the average 81-year-old man in Canada has a 38% chance of living to age 90 and a 73% chance of living to 85.

The article also presents a cautionary tale for any senior citizen buying life insurance: if you’re not careful and don’t read the policy information closely, you could live long enough to pay more in premiums than the life insurance policy you purchased is actually worth. This is because on many life insurance policies, the premiums just keep rising at exponential rates.

Eighty-one-year-old Raymond Ellis told The Star that he has paid nearly as much in premiums in the past 26 years as his $45,000 life insurance policy is worth. His annual premiums keep rising. This past year they were up 9.6% to $3,243, which means if premiums continue to rise at this rate, he will pay an additional $45,000 over the next 8.5 years.

“I have begged Manulife (Financial) for relief but they say there is nothing that can be done,” he is quoted saying. “They can only promise me that I will lose everything if I can’t make the monthly payments.”

Don’t end up in this situation. Consider the following six factors when looking into life insurance as a senior:

1. Premiums Are The Lowest At The Age You Are Now

Many insurance companies now offer life insurance to individuals up to age 85. However, the rates vary significantly between ages 65, 75 and 85. The best time to look into life insurance is at your current age because premiums generally cost more when you are older. Seniors with health issues might want to consider Assumption Life, Canada Protection and Industrial Alliance for Simplified Issue plans with No Medical Tests and only a few health questions. The coverage can start immediately – see point 6 for details. Equitable Life recently introduced a simplified issue plan similar to Assumption Life’s Golden Protection, but coverage is only available to applicants up to age 80.

“Fun is like life insurance; the older you get, the more it costs.” – Frank McKinney aka “Kin” Hubbard (1868-1930), American cartoonist, humorist and journalist.

2. The Cost Difference Increases More As A Senior

Face amounts can be as low as $5,000 and premiums can be as low as $20/month.  But the price for life insurance for seniors increases exponentially as the insured ages. This means the cost difference between a 71 year old and a 70 year old is much more than the cost difference between a 41 year old and 40 year old.

“Every birthday puts you one year closer to your life expectancy and thus, you’re are more expensive to insure.” – Chris Huntley, life insurance agent at Huntley Wealth and Insurance.

3. Individual Life Insurance vs Creditor Insurance

Many creditor insurance plans end at age 69. Individuals who are approaching retirement or are currently retired and in good health should consider individual life insurance options instead of creditor insurance. Individual Life insurance is portable so if you switch banks or move to another home you can maintain your coverage. More information can be found at our Facts on Mortgage Insurance article.

4. Preferred Rates Can Save You Money On Your Premium

Preferred rates are available to those in excellent health and with an excellent family health history. Preferred rates can save you up to 35% and many companies have multiple preferred rate classifications so even if you do not qualify for the best preferred classification you can still enjoy a significant saving. The savings on preferred rate qualification for Permanent policies is less pronounced and not as many companies offer preferred rates on permanent policies. For more information see Understanding Preferred vs. Standard Rates.

“If I bought groceries the way I buy insurance, I’d eat a lot better – and so would my dog.” – Phil Gramm, Economist and former Congressman and Senator.

5. Last-to-Die Coverage Offers Lower Rates Than Traditional Life Insurance

Many insurance companies offer last-to-die coverage at a lower rate than traditional life insurance. This form of insurance is used primarily for estate planning and pays out a tax-free death benefit upon the passing of the last surviving spouse. Since the insurance benefits are paid out further in the future, the cost is substantially less. Last to die policies are usually only available as Permanent rather than Term policies and are most often used for Estate Planning purposes. Some examples of seniors using life insurance for estate planning include taxes on a cottage or investment property or taxes owed on the RRSP or RRIF.

“I detest life-insurance agents: they always argue that I shall someday die, which is not so.” – Stephen Butler Leacock (1869-1944), Canadian teacher, political scientist, writer, and humorist.

6. Guaranteed Issue Life Insurance

Guaranteed Issue policies are available for the hard-to-insure or people with health issues. Similar to Simplified Issue life insurance, these policies do not have medical tests, but they also do not have any health questions. These are often considered a last resort and are commonly sold directly by companies such as BMO Insurance and Manulife. This type of policy has a two-year waiting period for payouts on non accidental deaths.

“I called an insurance company to get a quote. They gave me one of Oscar Wilde’s best.” – Jarod Kintz, author, humorist.

Contact us at 1-866-899-4849 to get a free quote today. For non-medical life insurance quotes fill out the contact form on this quote page

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BD
BD

My husband is 65 and in excellent health. I’m hoping for affordable term insurance for him. He has never smoked.

Ingrid
Ingrid

As a senior, I do not have any debt except a line of credit 30K. What ins. can I qualify for to cover this debt and cost. Thank you

Ed
Ed

I need Term Insurance for 20yrs to cover young kids. I am 60.5 yrs old. My health is good and I lead a fairly active lifestyle. Please send me some quotes.

Debby
Debby

I would like to purchase life insurance for our 82 year old mother. She is relatively healthy. In 2002 she had breast cancer and has been cancer free for 15 years. I am not sure what plan whole or term is available to her. I look forward to hearing from you. Can you please help me with this?

Christi
Christi

My father old is 76 years. What life insurance plan should qualify for my fathers? Can you help me regarding this. Thanks

JC
JC

My husband was 75 in August, 2016 and his Term Insurance was cancelled. He does have a small whole life policy. He is in reasonably good health for someone his age, and is a non-smoker.

We would like to obtain some additional insurance to cover final expenses and so that our children will not be left with outstanding debts.

Can you help us?

Thanks,

Ravi kumar
Ravi kumar

Thanks for the article. My parents aged 60 years old and they need insurance policies for secure their old age. What kind of insurance policies do they need?

Lucille Carlos
Lucille Carlos

Thanks for your great article. My grandmother is 80 years old and She is looking life insurance for her. It’s true that they have more risk in health and needs more care. So they must need senior life insurance.

Samantha
Samantha

I am looking for a cheap policy for my grandfather who is 85 years old. He is physically quite good, but the underwriters are not ready to provide any cheap policy. No medical life insurance seems to be very costly. Need a solution.

Jordan
Jordan

Does Canada Life offer a 30 year term I’m 58. The Whole Life was too much Thanks

Gord
Gord

Hi There, Can my father get life insurance he is a perfectly health 92 year old looking for $10,000

LES BAGSHAW
LES BAGSHAW

WHAT % OF MEN LIVE TO BE 85 YEARS OLD IN CANADA

Lester
Lester

Can I get a Term insurance plan if I’m 70. I do not want any cash values, just want insurance

Hillary
Hillary

Just have some reference material that I can show my client on the importance of being truthful on a life insurance application.

TH
TH

Can my client still get a 20 year term he is 69.

Maurice
Maurice

I am about to get cut off for the mortgage insurance at …. the plan ends at age 69.

I turn 69 in Feb. Can you give me a quote on $243,000 of term insurance

Jack
Jack

How much more to men pay for women and does it matter in terms of the product. It seems a little unfair and Innoway reverse discrimination

Harry T
Harry T

Can I get a Term 30 quote at age 60. I would like to save on what I’m quoted for Whole Life with ….

Wilbur
Wilbur

I hate blood tests. But i’m in good health, I don’t mind other tests, its just I hate blood awlways have. The BMO plan I received in the mail was too expensive what can you offer?

Howard
Howard

My father has turned 82 in April and I wanted to know what coverage if any he can acquire?

Tamara Humphries
Tamara Humphries

Hi Lois
The great news is that insurance has changed a lot and healthy people can qualify for insurance at age 85 and younger. You should have no problem getting term or permanent. Please note term insurance only runs to age 85 and so your husband will only be able to purchase 10 year term until he is 75. Permanent is no problem (this includes term 100).
I hope this is helpful.

Colton
Colton

I’m looking for a policy for my Mom and Dad The problem is they are apprehensive. Do they have to sign the application. I can get all their health details doctors names, meds etc. and I will pay the premiums

Maria O.
Maria O.

Hi.
May I get an insurance
For my mom who lives in Canada and I’m here in the states? She is 66 yrs. old. I would appreciate your help.
Thanks

Frances
Frances

Husband turning 65 next year. His insurance runs out when 65. Has medical problems that will not let him renew his policy with his present insurance co. Is a non smoker. Looking for something that will cover burial expenses.

Lois
Lois

We are interested in life insurance. My husband, is 74 in excellent health. I am 64. He does all the work that many 50 year olds are “huffing and puffing” after doing. He recently finished remodeling a house and is now starting on another. He is a non-smoker, and so am I. We are both very “young minded” people. We eat healthy and take supplements too. Can you help us get some low cost insurance so we can be sure we do not leave any debt for our children if something should happen to us.
Thank you, Lois

Wilson
Wilson

We are interested in mortgage insurance and also senior insurance. I am 65 years old and in excellent health with no underlying health problems. I am presently employed and do not wish to retire for several years yet. My wife is 58 years old and we were told that only she could be insured for the mortgage as she is under 65, while I did not qualify…could you please give us some quotes.

sharon
sharon

what are some rates for senior life insurance. for age 52.

Margaret
Margaret

My husband is 66 years of age. we would like to purchase more life insurance. with inflation we feel that he should have more insurance. Please advise.

Diane
Diane

My Mother is going to be 82 in November. Her health is phenomenol–nutritious diet/takes vitamins daily, exercises, still drives her own car, has all her faculties, is mentally stable and she still possesses her sense of humour. She has never smoked, either. She hasn’t travelled via airplane since 2001; at this point in time, she basically only visits a sibling in the US once or twice a year. Would your Critical Illness or Seniors’ Life Insurance be available to her? She has recently told me that her insurance coverage ended when she reached her 75th birthday. It would be great… Read more »