Many things get better with age, but the cost of life insurance isn’t one of them. The older we get, the more difficult (and the more expensive) it may become to purchase decent life insurance or medical aid. However, this doesn’t mean that anybody over the age of 40 (the age at which we commonly have to start undergoing medical examinations when applying for life insurance) should avoid these types of cover.
There are still many benefits to be enjoyed, such as investing in the future of your children or your grandchildren, leaving something behind for your family, making sure that all debt is covered, or even just ensuring that the cost of a decent funeral will be paid for.
But, as with most things in life, there are also several important factors that you should be aware of.
For instance, it’s important to understand that certain products, such as life insurance, are age-banded. This means that, as you get older, your policy will inevitably become more and more expensive. A healthy 20-year old, for instance, will pay a lot less than a healthy 60-year old. This is one of the many reasons that it is advisable to purchase these policies, and maintain them, as soon as you’re financially able to do so. But therein lay the rub.
Life insurance, like making plans for retirement, is best started as soon as possible. Some people are fortunate enough to do so, and they’ll save a ton of money on the way. Unfortunately, we’re often so preoccupied with car payments, study loans, bonds and other debt when we’re younger that life insurance or medical aid barely ever crosses our mind. It’s something that many people only ever get around to later in life, when things have calmed down.
So, we can safely ascertain that it’s far better to get your life insurance sorted out as early as possible – particularly if you’ve just gotten married, just started a business, just had a child, etc. – but, for those who missed out, luckily, there’s still some time.
In this article, we’ll take a look at everything you need to know about getting life insurance when you’re older.
As it is with the decision to purchase life insurance at any age, you need to question your motivations. Why do you need Life Insurance? What is the goal? Perhaps you and the spouse just bought a new house, started a business or even had a late child.
Perhaps you’ve just turned 90, and you’re scared that you may pass away soon.
Well, this scares most insurers, as well. Because of this, the older we get, the longer we wait, the more expensive it will be. For the very old, life insurance may simply prove unaffordable, and barely worth it. The truth of the matter is that even in perfect health, at a certain age (commonly around 65 - 90, depending on the insurer) no insurance company will approve your cover.
You’ll simply be too high a risk to insure.
Of course, it’s this very fear; of dying suddenly and having nothing to leave behind, that motivates us to purchase this type of cover when we’re younger. It’s a safety net for all those just-in-case moments.
So, why do you need life insurance?
This is the most crucial question of all, and the answer will not only motivate your decision to get the right insurance policy, at the right time, but will also determine the type and amount of cover you require. There’s no need to look for R20 million in cover if you only require R1 million, for example.
We buy life insurance to prevent the financial detriment of our loved ones, our dependents or our businesses when we pass away. We need to purchase things for the right reasons, at an age when they can serve us best, and we need to be sure of those reasons. Life insurance for a 90-year old with no dependents, and with sufficient savings to cover everything it needs to cover, for example, would not serve that person nearly as well as it would a first-time 20-something parent.
Of course, different insurers offer different policies, and some of these are far kinder on our seniors. Pensioners with a fixed income may also enjoy a fixed premium – meaning no yearly increases. Niche insurers may even specialize in these types of insurance, providing smaller cover at far more reasonable prices. Always be sure to do thorough research. If you’re unsure of how much cover you might require, or if you’re unsure of any insurance terms, limitations, exclusions, or anything else, speak to a good broker about it until you’re entirely comfortable.
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