Term Life Insurance Plans for 70-Year-Olds
When buying life insurance, you have two choices as to how to purchase a policy. You may choose a permanent policy or a term policy. Permanent policies provide lifetime coverage. However, the premiums are high when compared to term life policies. When you are 70 or older, your only affordable option may be a term life policy.
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Types
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There are two types of term policies. The first is an annual renewable policy. These policies have maturities of one year. On your policy anniversary, the policy renews. The other type of policy open to 70-year-olds is a level term policy. Level term policies have a fixed -- level -- premium that does not change for the term of the policy.
Significance
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The significance of buying a term policy when you are 70 or older is that you will be buying a life insurance policy in the later years of your life. Many insurers may not be willing to insure your life at this age. However, impaired risk insurers and insurance companies with the mortality experience to take on 70-year-old individuals do exist and will sell policies to you provided that you are wiling to undergo a health exam. In some cases, you may be required to use extensive underwriting.
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Benefit
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The benefit of a term policy at age 70 is that it may be less expensive than buying a permanent policy at this age. Term policies tend to offer premiums lower than that of permanent policies, since there is no added policy fee expense for maintaining a permanent policy and the investment portion of a permanent policy, called the cash value.
Disadvantage
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The disadvantage to buying a term policy at age 70 is that it is expensive. Even though the policy may be less expensive than a permanent policy, you may still spend several thousand dollars per year in premiums. Additionally, many insurers will not insure a 70-year-old for more than 15 years.
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