The business of life insurance is a statistics, calculations, and numbers game. A life insurance company professionally calculates the probability of lifespan and death. That is why you must submit so much information and personal data during the application process. Your life, age, and lifestyle are broken down into data points for a life insurance company to analyze. Young, healthy applicants who exercise regularly pay the least for life insurance coverage.
To a life insurance company, the youth of an applicant equates into a lifelong policyholder. A young applicant can end up paying for a premium for multiple years, if not decades. Advancing age is seen as a financial risk. The older that you are, then the closer you are to failing health and/or death. That means less relative time to pay for premiums. Also, the probability of a coverage payout is greater in relative terms.
The older that you are, the more likely you will pay more money for life insurance coverage. Can you get life insurance coverage when you are 70 years old? It is not impossible. However, a robust life insurance policy for a 70-year-old will be expensive and may potentially feature several coverages limiting conditions.
The Application Process
Before getting to the payment process, a 70-year-old must get through the application process. A life insurance application process usually requires a medical examination. Previous medical history and prescription medications may be requested as well. This information will be assessed to calculate current health, the probability of declining health and the possible age of death.
The average American male lives for about 76 years. The average woman lives until age 81. To a life insurance company, that means that a 70-year-old applicant might trigger a coverage payout in a handful of years. Or a little more than a decade. Of course, people can live into their 80s, 90s, and beyond. However, these are risky age demographics to count on to continue paying premiums for a life insurance company.
The Insurance Price
The average life insurance policy can be anywhere from $250,000 to about $500,000. For a 70-year-old applicant, a half million dollar life insurance policy may be configured for a 10 or 20-year term. In such a situation, a monthly premium payment could be anywhere from $400 to $500 a month. The more valuable the policy, then the more expensive premiums will be for the policyholder.
Final expense insurance might be a more affordable alternative to traditional life insurance. The average final expense insurance policy is about $25,000. Final expense insurance is designed to be a kind of last chance life insurance policy. The coverage is meant to cover funeral expenses, some end-of-life medical expenses and not much else. Low-value final expense insurance policies can cost tens of dollars a month to over a hundred dollars a month.
Drawbacks of Policy
You are unlikely to find a life insurance policy that will compare to the type of coverage a young applicant can get. A lot of life insurance companies include mandatory waiting periods for beneficiary payouts to minimize risk. Your beneficiaries may have to wait two to three years, or more, before a payout. If you have other major life expenses, paying exorbitantly for a life insurance policy may not be the best use of your money. Talk to a consultant or expert about your options. Assess your needs and looks for policies that will affordably cover them.