How Does Life Insurance Work for People Over 85?

Updated

Not only is it possible for people over 85 to buy life insurance, this can also be a practical choice. Some lesser-known life insurance companies cater to this market, and many life insurers with household names have developed life insurance policies for seniors.

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In this article, we’ll look at the different types of life insurance available for seniors, who some companies are that sell to people over age 85, how much these policies cost, tips for buying life insurance for senior’s over 85, and more.

What Type of Life Insurance Is Available for Seniors Over 85?

There is only one type of life insurance available for seniors over 85: whole life insurance.

Many people think there are multiple types of life insurance available for this age group, but that’s not the case. 

There is confusion concerning this because insurance companies market life insurance to those over 85 as “burial insurance,” “funeral insurance,” or “final expense insurance.” In reality, they’re all the same thing. It’s just different whole life insurance policies. 

Life insurance companies don’t offer term life insurance to seniors over 85, nor do they offer universal life insurance or accidental death life insurance. They strictly offer whole life insurance.

Whole life insurance has been around for centuries. Its main features are:

  • Monthly premiums don’t increase
  • The death benefit doesn’t decrease
  • The policy won’t expire due to age (it remains in force for the insured’s “whole life”)

Like all life insurance policies, whole life insurance pays out a tax-free death benefit to the policy’s beneficiary(s), who can use the money any way they choose.

How do these life insurance plans differ?

Whole life insurance policies are available for all ages through major life insurance companies, but their policies for those over 85 have one significant difference: lenient underwriting. This means that seniors with pre-existing medical conditions can still qualify, though submitting an application does not guarantee a policy will be issued.

The death benefit amount available to those over 85 is also considerably smaller than what their younger counterparts have to choose from. Face amounts for seniors over 85 typically range from $2,000 to $25,000, though some companies will issue policies with death benefits higher than this.

Is there a waiting period?

Some companies that sell policies to people over age 85 have what is known as a “two year waiting period.” This waiting period is the amount of time that must pass from when a policy is issued until the insurance company will pay out the policy’s full death benefit to the beneficiary(s). 

If the insured person passes away during that waiting period, only the premiums that have been paid (plus interest) are typically paid out, and some insurers may not pay out any amount.

How Much Does Life Insurance Typically Cost for Someone Over 85?

Life insurance for someone over 85 is expensive. Insurers must price it high enough to cover the increased risk of paying a death claim on someone who has already exceeded the average life expectancy in the U.S., which was 77.0 years in 2020.

These are some sample rates for life insurance policies with various face amounts for seniors between 86 and 89 years old who don’t use tobacco:

Woman

  • Age 86 monthly cost $87+
  • Age 87 monthly cost $104+
  • Age 88 monthly cost $122+
  • Age 89 monthly cost $130+

Man

  • Age 86 monthly cost $119+
  • Age 87 monthly cost $140+
  • Age 88 monthly cost $160+
  • Age 89 monthly cost $180+

For those who do use tobacco, the cost increases. These are for policies with payouts between $5,000 and $20,000. 

How Do Seniors Know If They Should Purchase Life Insurance If They’re Over 85?

 Whether or not a senior over age 85 should purchase life insurance is a personal decision that may be influenced by several factors. First, without life insurance, is there enough money available for the person responsible for funeral costs to pay all of the final expenses, including medical bills that are due, funeral expenses, burial costs, etc.? 

These costs can easily exceed $10,000, and many seniors living on fixed incomes don’t have the cash available to pay for final expenses. Life insurance provides their loved ones with the funds to cover these costs.

Also, many seniors buy life insurance to leave something behind for their children or grandchildren. Some people over 85 have received all kinds of support from family members, including financial aid, caregiving assistance, and emotional support. Leaving behind a death benefit from a life insurance policy is one more way a senior can thank family members for the care they’ve received.

A senior over age 85 may also need to buy life insurance to help a surviving partner financially. The death benefit a surviving spouse receives can significantly improve their quality of life during their remaining years. 

What Are Popular National Life Insurance Companies for Seniors Over 85?

Several popular national life insurance companies sell policies to seniors over 85. Like all things planning, it’s important to shop around. 

One well-known insurance company that insures this age group is Aetna. Some policy particulars are:

  • Age Availability: 45-89
  • State Availability: All States Except NY
  • Face Amount Range Over 85: $2,000-$25,000
  • Two-Year Waiting Period: No (subject to underwriting approval)

Another company that provides policies to seniors over 85 is Security National Life. Their policy features include:

  • Age Availability: 40-90
  • State Availability: All States Except CT, DC, DE, ME, MA, MT, NH, NJ, NY, NC, ND, OH, PA, RI, SD, VT, WA, WV
  • Face Amount Range Over 85: $2,500-$10,000
  • Two-Year Waiting Period: No (subject to underwriting approval)

What Are The Eligibility Requirements for Buying Life Insurance Over 85?

Since guaranteed issue life insurance (policies with no health questions and no medical exam) isn’t available for seniors over 85, you will have to medically qualify for coverage when you apply. 

You will have to answer health questions on an application, which typically include:

Right now, are you:

  • In a hospital, nursing home, hospice, or other medical facility?
  • Confined to a bed?
  • Been prescribed oxygen (even if you don’t use it)?
  • Have an aneurysm that hasn’t been fixed via surgery?
  • Using a wheelchair?
  • Awaiting a pending surgery, diagnostic test, or other procedure that has not yet been completed?

In the past, have you:

  • Been advised to have a stem cell, bone marrow, or organ transplant?
  • Had dialysis?
  • Been diagnosed with dementia or Alzheimer’s disease?
  • Developed a mental incapacity?
  • Experienced Lou Gehrig’s Disease (ALS)?
  • Been told you have 12 months or less left to live?
  • Been diagnosed with AIDS, HIV, or any AIDS-related complex?
  • Experienced congestive heart failure?
  • Had cardiomyopathy?
  • Developed cirrhosis?
  • Had part of your body amputated due to diabetes?
  • Required a mechanical mobility device or wheelchair?
  • Developed neurological conditions such as muscular dystrophy or cerebral palsy?

 In the last 12 months, have you had:

  • Stroke or mini-stroke (TIA attack), angina (chest pains), heart attack, or had surgery on the heart/circulatory system?
  • Pending surgeries, diagnostic tests, or other procedures that haven’t yet been completed?

In the last 24 months, have you had:

  • Hepatitis?
  • Any form of internal or external cancer (excluding basal cell)?
  • Treatment or counseling for the abuse of drugs or alcohol?

If you live in a state where coverage is available, you must answer “no” to all of these health questions to qualify for coverage. At this age, insurers either accept or reject applications, and any “yes” answer results in an automatic denial of coverage.

In addition to asking health questions on the application, insurance companies will also check your prescription drug history to confirm what health issues you may have. For example, if you indicate on the application that you’ve never had dementia, but the insurer finds you’ve previously filled a prescription for a dementia-related medication, they will deny your application.

Tips for Buying Life Insurance for Seniors Over 85

There are several things a senior over 85 can do to make sure they buy the right policy from the right company. First, work with an independent life insurance agent who specializes in helping seniors. 

It takes specialized knowledge and experience to find life insurance companies that sell policies to people over 85, and an agent who knows this market is needed to help you with finding the best life insurance policy and figuring out how much life insurance you may need.

Second, read the fine print carefully. Look for any exclusions the insurer may have added to the policy, like a two-year waiting period before the death benefit would be paid out or the exclusion of certain causes of death, such as cancer or heart attack.

Alternatives to Life Insurance for Seniors Over 85

Many seniors over 85 would like to buy life insurance, but they’re not able to get approved when they apply, usually because they don’t medically qualify. They may also not live in a state where a company sells policies to people that age, or it’s just too expensive for their budget.

If you’re a senior over 85 and life insurance isn’t an option for you, what else can you do? Consider these three options:

  • Save: Put as much money as you can aside every month. This is the slowest way to accumulate money, but you’ll be surprised how quickly it can add up if you do it religiously.
  • Plan: Make pre-planning arrangements with a funeral home. Some funeral homes will work with you individually and customize your funeral arrangements around your budget. They may also set up a monthly payment plan for you to put money aside for your final expenses.
  • Estate: Rely on your estate to pay for funeral expenses. This can present challenges for your loved ones since it can take many months for heirs to access your estate. Once they do, they may still have to liquidate assets, which can also take months.

Be Truthful and Accurate On Your Application

If you pass away within two years from when your policy was issued, the insurance company will likely request medical records to confirm the cause of death. 

They’ll then match that cause with the answers you provided on your application. If they find that you intentionally misled them or omitted information, they can deny paying the death benefit to your beneficiary. While life insurance can be beneficial, it’s not your only option. 

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