For any number of reasons those of us over 60 are finding our life insurance needs have changed some from what our parents experienced and really from what our own expectations might have been 20 years ago. Changes in the economic world like the great recession of 2007 are causing some of us to look at sticking with our careers a little longer. Some of us are grandparents and have found ourselves raising children again, this time in the form of our grandchildren. Some of us are CEO’s and decision makers in companies and are working longer and extending our usefulness and our life insurance insurable interest to our company.
The good news is that as these circumstances have changed, so has pricing, underwriting and products that are allowing those who are over 50, 60 and even 70 to buy life insurance that wouldn’t have been as affordable or even available when our parents were that age. 20 years ago 30 year term products were just coming on the market, but because of the actuarial guidelines then, companies would would offer a 30 year term, but only out to age 75. Today a person can get terms that will extend out to age 85 and 90 in some cases and with no lapse guarantee UL’s, there is now the equivalent of term to age 100 or longer.
Let’s talk underwriting first because this one issue alone has made a huge difference in the ability to get and afford life insurance in our prime (60 is the new 40, right?). 20 years ago underwriting of any kind of cancer was brutal if not futile. Back then, just due to a lack of up to date actuarial life insurance risk data, even prostate cancer was tough to get approved and melanoma was impossible. No we can get both approved, within limitations, immediately after treatment. With advances in early detection and treatment of a plethora of diseases and mental conditions, life insurance underwriting has finally risen above the level of only loving the young and beautiful.
Pricing, in spite of the dire warnings for the year 2000 and every other year or so since, has continued to go down. This is mostly reflected in the best rate classes, but being over 60 or 70 or even 80 does not preclude life insurance approvals at the best rate class. If you’re over 80 you might want to temper your enthusiasm about the best rate class a bit, but when it comes right down to it, healthy is healthy and we’ve never had a life insurance application denied the best rate class based on age alone. And yes, we have clients who were approved best rate class in their 80’s.
And products. As mentioned above there are longer term products including the no lapse guarantee universal life insurance, which can provide a reasonable cost guarantee to 100 and even to 121. Ok, we’re all in our prime, so listen up. The no lapse guarantee UL is under priced right now and two things are occurring because of that. Companies are removing it from their available products for term life insurance conversion. I suspect within a few years almost all companies will have switched either to a bad product or an overpriced bad product for conversion. We bring this up in GIANT ASTERISKS*****, because these products are fully guaranteed and if they were priced correctly companies wouldn’t be rapidly phasing them out. If you need permanent life insurance for estate purposes or just final expenses, buy or convert now to a no lapse guarantee UL. This is not a buy now or lose a few dollars kind of thing. It is a historically under priced product that is about to go up 20-30% in price or disappear as an option altogether.
No need to be timid about this life insurance thing just because 40 year olds can buy it for the cost of a bottle of wine a month. If you have any questions or just want to bounce around some ideas about how life insurance can work in your situation, call or email. We can help.
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