Most seniors are denied life insurance policies because of their existing health conditions. But there’s a way out.
Life insurance policies have become a need today; it is important for policyholders to think about their families and secure their financial position decades from now. This is the main motivation that policyholders have today as their reason for buying life insurance policies.
A person who is young and healthy will definitely find a better life insurance deal and on lower premiums, as compared to an older person who has a history of health issues. And sometimes, because of health, most people are rejected life insurance.
But why? Why is being healthy so important for a life insurance policy?
The science is simple; insurance companies will invest in a person who is healthy and is likely to live a long life so that they pay premiums for a longer time too. And the sooner a person dies, the sooner the insurance company will have to pay the death benefit before they earn a handful from the policyholder.
The bottom line is that an unhealthy senior may be rejected an insurance policy based on their health and the results of the medical exam.
What is a Medical Exam?
You’re probably wondering as to what even happens in a medical exam? Why are people so scared of it and would rather opt for a policy that doesn’t require health questions or an exam?
Well, this is exactly what happens.
A policyholder is given 1-2 weeks to ‘prepare’ for the exam and is given a date. They are required to fast the day before but be hydrated by drinking lots of water. A medical exam includes blood tests which indicate if you have drugs or nicotine in your system and a pulse check to see if there is blood pressure. Moreover, extensive check of heart rate, collection of urine samples is all done.
It is advised to not smoke at least 8 hours before the test because it could indicate high blood pressure and reduce your chances of qualifying.
Other than all these samples, they collect your personal information such as your identification, measurements of your weight and height and may ask questions about your lifestyle, eating habits, hobbies etc.
A typical medical exam is of 20-30 minutes, and the insurance company gives your tests to the underwriter who then thoroughly checks and determines the results. It is often your insurance company that pays for the medical exam, so if you’re not too scared of needles and clinics, it is always better to have an exam so that you can be charged just the right amount of premiums on your policy.
Life Insurance for Seniors No Medical Exam
If you missed your chance for life insurance when you were healthy and young, there is a chance that your age and health will be a barrier in getting a reasonable policy.
So is there life insurance for seniors over 70 with no medical exam? Absolutely! There is one life insurance policy that is specifically designed for seniors and requires no medical exam.
Guaranteed Universal Life Insurance for Seniors
Whole life insurance policies provide lifelong protection to policyholders, so your beneficiaries will get a guaranteed death benefit whenever you die. Whole life also has a cash value component that grows over time, and this accumulated cash value can also be used during the policyholder’s life if they choose to borrow or withdraw it.
With premiums paid to keep the policy in force, whole life insurance gives permanent coverage.
Among whole life, there is a type called Guaranteed issue life insurance, which is a lifelong coverage with no medical exam! Seniors usually use this type of policy because they can’t be denied the plan based on their health because of no medical exam.
Sounds fascinating, right?
But there’s another side of the coin too.
Guaranteed issue life insurance policies ALWAYS have a waiting period, sometimes even more than 24 months. If a policyholder dies during that waiting period, there is no death benefit given to the beneficiaries. However, the premiums you had paid throughout the policy are returned- often with 10% interest- to your recipients.
It is not that a person receives nothing when they sign up for the policy and die during the waiting period; their beneficiaries don’t get the desired death benefit. The overall payout is meager than you would expect it to be.
Here is a typical example with sample rates:
|Applicant for $20,000 in coverage||Guaranteed issue life insurance||Whole life insurance|
|Female, age 70||$156/month||$103/month|
|Female, age 80||$349/month||$194/month|
Which Life Insurance is Best for Seniors?
Many seniors often find their health deteriorating over time, because of the age factor, they aren’t as strong and healthy as they were in their 40s. Many seniors are denied other life insurance policies because of their health, as it is a risk to invest in them.
This is where guaranteed issue life insurance policy steps in. Having the option of no medical exam or no health questions, this policy is not denied to any senior based on their health.
Here are some of the best-guaranteed acceptance life insurance companies that benefit not only seniors, but also middle-aged people too.
|AAA||AIG||Gerber Life Insurance||Mutual of Omaha||New York Life|
|Waiting Period||2 years||2 years||2 years||2 years||2 years|
|Payout During Waiting Period||Premiums paid + 30% interest||Premiums paid + 10% interest||Premiums paid + 10% interest||Premiums paid + 20% interest||Premiums paid + 10% interest|
Note: Sample rates have been extracted online, courtesy of ValuePenguin.
Can Seniors get Term Life Insurance?
There are certain term life insurance policies that do NOT require a medical exam. A term life policy- unlike whole life policy- is only eligible for a specific term of 10-20 years and only gives a death benefit.
But how does a term life insurance with no medical exam work?
It is important to note that if there is no medical exam, you may still not be able to qualify based on other factors such as the medical questionnaire, if you’re a smoker, have been diagnosed with a fatal health condition.
No medical exam means there won’t be any blood tests and urine samples. No one will invade the privacy of your body or your home. So you’re good there.
A term life insurance without medical exam also has limited coverage of around $1 million, but you can extend the limit as per the nature of the policy and your own requirement.
Even if you do get away without giving a medical exam, you will still have to answer medical questions. Sure, they won’t be as extensive as you would have thought, but there is no life insurance with no medical questions. A basic questionnaire is the bare minimum that your insurance company should ask about you, to generate the best plan for you.
As observed in the data above, Gerber guaranteed life insurance policy best suits seniors because of the age availability and coverage limit. These companies provide excellent benefits and options to people of any age and that too, without a medical exam.
Most people are denied coverage due to a pre-existing condition. If they opt for a guaranteed issue life insurance policy, they can get protection without giving the medical exam.
Who has the Cheapest Life Insurance for Seniors?
When it comes to life insurance, and who has the cheapest life insurance for seniors, there are a lot of companies that fit the mark. However, not every insurance company may suit the needs of every senior.
Here is a list of the 5 best life insurance companies for seniors in 2020, based on their unique qualities and of course, budget friendly policies.
- Best for Online Resources and Tools: Guardian
- Best for Customer Service: Northwestern Mutual
- Best for Coverage Options: Transamerica
- Best for Quick Coverage: MassMutual
- Best for Guaranteed Issue Life Insurance: Mutual of Omaha
Should I buy Life Insurance Age 70?
When you’re 70 and already a senior, buying a whole life insurance policy may seem a little absurd. You would get an expensive policy on a higher rate of premiums and that too to build cash value- which won’t mature by the time you want to cash it out.
At age 70, you should go for a guaranteed universal life insurance policy if you don’t want a medical exam- this is best for seniors who are diagnosed with a medical condition that would make it hard for them to get some other policy.
Moreover, it is still advisable for a person of 70 years of age to get a term life policy which would relatively be cheaper and will get them a death benefit which would help their family with future finances, or even with funeral and burial costs.
Guaranteed issue life insurance isn’t a policy specifically designed for seniors, but older people tend to get attracted by it since it has no medical exam. The age limit is usually from 40-80 years of age.
Life insurance options for seniors over 70 are limited, especially for the ones that require a no medical exam policy. However, you shouldn’t get disheartened by it.
You need to contact your insurance company and see what options they have for you; maybe you’re ineligible for guaranteed issue life insurance policy based on some other factor. Keep in touch with an agent to guide you better on your choices and advise which procedure will be better in the long run. Don’t assume and start shopping around for a suitable policy.