July 16, 2024

Your guide to life insurance for over 65s

Navigating life insurance options can be complex for seniors over 60. It’s essential to explore coverage options tailored to your needs, considering factors like maximum entry age, policy duration, and coverage types. Seniors can benefit from understanding average costs, types of coverage available, and potential savings strategies. With the right information, seniors can secure financial protection for themselves and their loved ones, providing peace of mind in their later years.

Important :

  • Life insurance is available to people over 65.
  • Certain insurers offer life insurance up to the age of 130.
  • After the age of sixty, income protection insurance is no longer accessible. However, up to the age of sixty-five, you can usually obtain term life insurance, trauma insurance (also known as critical illness insurance), and total and permanent disability (TPD) insurance.

 

In the event of unanticipated events like your death or a terminal medical diagnosis, life insurance provides you and your loved ones with financial protection. Making sure your loved ones are financially secure becomes more crucial as you get older and your health changes.

You and your loved ones can have peace of mind as you get closer to retirement because there are lots of options accessible. Examining your alternatives for life insurance is a smart idea regardless of whether you’re looking for your first policy in retirement or thinking about changing to a new one.

There are many ways to give you and your loved ones a financial safety net when it comes to senior life insurance. The age at which you can no longer apply for new insurance is known as the maximum entry age, and it is set by most insurance firms. Generally speaking, this age restriction ranges from 60 to 75, depending on the insurer and the policy.

Is there life insurance for over 65s?

In Australia, different life insurance carriers have different maximum entry ages for policies, but generally speaking, anyone over the age of 18 can apply for coverage, and the age at which life insurance expires is 75.

The age at which your life insurance policy expires may affect how long it lasts. This is the age at which your insurance will expire on its own. This age range usually spans from 99 to 130 years old. For instance, you will continue to be covered until the age of 100 if you get life insurance with an entry age of 70 or above and an expiration age of 100.

These three life insurers—out of the ten we deal with—offer the greatest maximum entrance age for life insurance along with the highest maximum expiry age.

For over-65 life insurance, there are many coverage alternatives as well as techniques to possibly reduce your costs.

How Do Senior Life Insurance Plans Work?

The maximum age at which an insurance company will accept a customer for a life insurance policy is usually between 60 and 75 years old. They also establish a policy expiry age, which is the age at which your coverage expires on its own. Usually, this age restriction is set at 99.

After 65, is life insurance still worthwhile?

For those over 65, the value of life insurance varies depending on their unique needs, risk tolerance, and desired level of protection in the case of death.

Your family may find it difficult to pay for certain expenses without you and/or your income, such as:

  • how much raising dependents costs;
  • unpaid mortgage(s);
  • additional debts
  • ongoing living expenses including rent and school tuition;

Speak with a life insurance specialist if you have any questions.

Can I still get covered if I have a pre-existing medical condition?

Depending on the sort of life insurance you have with your insurer, you may or may not be covered for any pre-existing medical issues. Pre-existing conditions are frequently covered by term life insurance, although particular plans, like trauma, TPD, and income protection, may have restrictions. For those with pre-existing medical issues, some insurers provide life insurance, but at a higher premium rate or with restrictions on benefit payouts because of your condition.

The following top causes of death for seniors in Australia are among the major health concerns for those over 65:

Types of life insurance for seniors

Several coverage options are available for senior life insurance, which can be purchased separately or, in some situations, combined into a single policy.

In Australia, there are five primary categories of senior life insurance:

Term life insurance

Alternatively referred to as “life cover” or “death cover,” this kind of insurance provides a lump sum payout to a beneficiary, like your partner, in the event that you pass away or are given a terminal diagnosis.

Maximum age to enter: 75 years old, maximum, depending on the insurer

Coverage for total and permanent disability (TPD)

If a permanent illness, accident, or disability prevents you from working again, TPD coverage provides a lump amount.

The insurer’s definition of permanent disablement varies, so it’s critical to review the product disclosure statement (PDS) to determine the timing of benefit payments.

Maximum entry age: 60 to 75 years old, while many insurance companies have a 60-year-old cutoff age.

Insurance for trauma

Trauma insurance, also referred to as “critical illness cover,” provides a lump sum payment in the event that a certain disease or condition, such cancer, is discovered.

Entry-level maximum age: Typically 65 years.

Insurance for income protection

This kind of coverage, provided you haven’t retired, provides up to 70% of your regular salary, normally on a monthly basis, in the event that a sickness or injury prevents you from working temporarily. Redundancy is not covered under income protection insurance.

The maximum age of entry is typically 60, while some insurers do provide coverage to senior Australians.

funeral Insurance

When you pass away, this kind of coverage gives a beneficiary—like your partner—a lump sum payment to cover funeral costs.

Funeral benefits are frequently an extra perk of having term life insurance.

Compared to traditional funeral insurance, this can offer greater value, and it’s not unusual for people to pay more for their funeral cover than their family actually spends on the funeral.

For instance, if you have a $100,000 term life insurance policy with funeral coverage, your beneficiary may receive an advance of $15,000 to $20,000 right away to help with burial expenses in the event of your death.

Processing of the entire life insurance policy (as well as the outstanding payment) can then take a few more weeks.

Maximum age to enter: above 75

 

Can I still get covered if I have a pre-existing medical condition?

In a nutshell, it depends on the kind of life insurance you have and your insurer.

Pre-existing conditions are commonly covered by term life insurance. Pre-existing conditions may be covered by some income protection, trauma, and TPD insurance, though there may be some exclusions.

On the other hand, certain insurance companies may agree to pay a partial benefit for claims relating to your medical condition, or they may give seniors life insurance at a higher premium cost for those with pre-existing medical issues.

You should evaluate coverage offered by several insurers if you already have a medical condition to determine your alternatives.

Any pre-existing conditions that the insurer asks you about or that you list on the form must be disclosed; if you fail to do so, your insurance may be void. Certain conditions combined may make an insurer very hesitant to cover.

What is the cost of life insurance for seniors?

Everyone’s cost will be different based on their age, occupation, health history, and smoking status.

The typical cost of a $500,000 term cover policy by age group for a man and woman in NSW who work in an office job and have no pre-existing medical conditions is shown in the table below to give you an idea of how much it will cost.

This information was acquired on July 31, 2020.

Because the chart is merely illustrative, the prices you receive will vary based on your unique situation.

An example table showing the typical cost of a term cover policy may be found below.

image source: compareclub

 

What factors affect the price of life insurance for seniors?

The price of senior life insurance can vary depending on a number of criteria, as with any insurance, including but not limited to:

  1. Your age: Generally speaking, your premiums will increase with age.
  2.  Gender: Because men often have a lower life expectancy than women, elderly men typically pay higher premiums.
  3. Smoking history: Whether you smoke or not—If you smoke, your rates will go up.
  4. Your medical history: Your premiums can be higher if you already have a medical issue. The medical history of your family If any members of your immediate family have a history of serious sickness, such heart disease, your rates can go up.
image source: compareclub

 

Knowing the stepped premiums for Seniors life insurance

Stepped and level premiums are the two primary life insurance premium structures.

Age and stepped premiums are related. Every year, your insurer reevaluates your risk of disease, injury, or death and modifies your premium.

To put it another way, you will typically pay a lesser premium when you are younger and a higher premium as you age.

Your age is not a factor in level premiums, therefore any increase in your premiums will come from other sources.

These kinds of policies typically have higher initial premiums, but over time, they may end up being more cost-effective.

The majority of life insurance policies for seniors have progressive rates. This implies that the more years you are insured, the higher your premium may be.

When weighing your options, it’s critical to take stepped premiums into account because, if the yearly increases on the cheapest coverage are substantial, it may wind up costing you more in the long term.

A seniors life insurance policy’s product disclosure statement (PDS) ought to provide information about potential rate changes. These will vary depending on the insurance company.

How to lower the price of life insurance for elders

It’s not always necessary to choose the most affordable life insurance for seniors; there are a few things you can do to reduce rates while still locating the ideal coverage for your requirements:

  • Insurance bundles: If you’re considering purchasing multiple insurance policies, you can frequently save money by combining coverage into a single policy. For instance, purchasing funeral insurance separately is typically more expensive in the long run than combining funeral benefits with term life insurance.

 

  • Don’t merely maintain your insurance coverage till your super: Your policy may terminate at a specific age, it is not medically underwritten, and having coverage via your super does not ensure the lowest prices. With coverage from a retail life insurer, you might be able to get a better bargain for an extended length of time.

 

  • Examine estimates from several insurance providers: Prior to choosing a choice, it’s a good idea to shop around, just as with any purchase. Since each person’s circumstances are unique, comparing your alternatives will help you locate the best senior life insurance rates as well as a policy that fits your needs.

Although you should still have the greatest years of your life ahead of you, it’s always a good idea to be prepared so that your loved ones won’t have to worry about money in the event of an emergency.

If you believe that you could still benefit from a life insurance policy even though you’re in your 60s or 70s, you can start the process by contacting one of our specialists at 1300 904 624 or by clicking the button below.

Frequently Asked Questions:

Which life insurance plans are available to people over 65?

  • coverage for term life.
  • insurance for trauma.
  • TPD shield.
  • funeral coverage.

What does ‘term life insurance’ mean?

Most people think of term life insurance, often known as “death cover,” when they hear the word “life insurance.” It’s the one-time payout your family receives after you pass away. Term life insurance covers you for a specific amount of time (up to 130 years old, according to some insurers), and in the event that you pass away before the policy expires or you choose to cancel it, the beneficiary you designate will receive a lump sum payment.

What is a ‘buy-back’ option?

This especially relates to trauma cover. Your total life cover sum insured is lowered by the amount paid for the trauma benefit if your trauma cover is part of a larger life insurance plan and your benefit is paid for a trauma occurrence. For instance, if you are hurt in an accident, your $500,000 life insurance policy will pay you $50,000. After submitting your trauma claim, you have the option to repurchase an additional $50,000 of coverage, which will be paid to your family when you pass away.