Life insurance after 70: what's still on the table

Turning 70 changes the life insurance conversation, but it doesn't end it. What changes is the order you should work in. At 40 you would start by shopping. At 70, start by looking at what you already have, because the coverage you bought years ago is often cheaper to keep than anything you could buy today.

Step one: why do you want coverage now?

Before any quote, finish this sentence: "When I die, I want this money to…"

• …pay for my funeral and last bills. You need a modest, permanent policy. A final expense policy may be enough.
• …replace income for my spouse. For example, if a pension or a Social Security benefit shrinks or stops at your death. You may need a larger amount for a limited number of years.
• …pay off a debt. A mortgage or a loan you co-signed. The amount and the time horizon are both fixed, which helps.
• …leave something behind. For children, grandchildren or a charity. This is the most flexible goal and the easiest to scale down.

Your answer decides the type and size of policy. Without it, you will be sold whatever is easiest to sell.

Step two: what you already own

Pull out every policy. Look in desk drawers, safe deposit boxes, and old benefits paperwork from former employers and unions.

If you find…	Ask the insurer…
A whole life policy	"What is the current cash value and death benefit, and are any loans outstanding against it?"
A universal life policy	"Show me an in-force illustration at my current premium. When does the policy run out of value?"
A term policy	"When does the level term end, and is there a conversion option? What is the deadline?"
A group policy from a former employer	"Is this still in force, and can I keep it or convert it?"
A policy you stopped paying years ago	"Did it lapse, or is it being kept in force by its cash value?"

The universal life question is especially important. Some universal life policies bought decades ago assumed interest rates that never happened, and they can run short of value in your 70s or 80s. An in-force illustration shows you when. Ask for one every few years.

Step three: what you can still buy

If you need new coverage, these are the main options after 70, roughly from strictest to easiest to get.

1. Fully underwritten coverage. With a medical exam or records review. If you are in good health, this usually gives the most coverage for the money. Some companies issue term policies to people in their early 70s, though the term lengths offered shrink as you get older.
2. Guaranteed universal life. Permanent coverage designed for a level premium to a chosen age, with little or no cash value. It can be a lower-cost way to buy a death benefit that lasts.
3. Simplified-issue whole life. A short health questionnaire, no exam, smaller face amounts. This is where most final expense policies sit.
4. Guaranteed-issue whole life. No health questions, small face amounts and a graded benefit in the first years. See Guaranteed-issue life insurance and the two-year waiting clause.

Each step down the list is easier to get and costs more for each dollar of coverage. Start at the top and stop at the first one that says yes.

Things people forget to compare

• The premium for life, not just this year. Is it level? Can the insurer raise it?
• How long coverage lasts. To age 90, 95, 100, or for life?
• What happens if you stop paying. Some permanent policies offer a reduced paid-up benefit.
• The insurer's financial strength. Independent rating agencies publish these, and your state insurance department can confirm the company is authorized to sell where you live.

What not to do

• Don't cancel an old policy to buy a new one without comparing them carefully. A new policy brings a new contestability period and, often, higher costs. Many states require a replacement form for exactly this reason. Read it.
• Don't buy more coverage than your sentence calls for. At 70 and beyond, every extra dollar of death benefit costs more than it did at 50.
• Don't let a policy lapse quietly. If a premium is becoming hard to pay, call the insurer and ask what your options are before you miss a payment.

A word on selling a policy

If you own a policy you no longer need, you may have more choices than surrendering it. Some people sell a policy to a third party in what is called a life settlement. Rules differ by state, there are fees, and the money can be taxable, so treat it as a decision to make slowly, with your state insurance department's consumer guidance in hand.