Can an 80-year-old buy life insurance?

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Important things to know...
  • The mortality factor in life insurance premium calculations
  • Types of life insurance policies older people can purchase
  • Business needs that older people have which are solved by life insurance

No matter their age, if a person is in good health and he or she can qualify for the other requirements that life insurance companies put forth, then it is possible for people who are older to purchase life insurance.

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How Does Life Insurance Work?


Life insurance is based upon personal health, personal habits, work-related hazards, and moral history.

Of course, if a person is of an advanced age, their premiums are going to be sky high, because mathematically they are much closer to death that a 30-year-old individual.

Statistics play a part in the determination of life insurance premiums.

Mortality tables measure how long people, make and female will continue to remain alive at every age up to age 100, which is considered to be the ultimate living age for statistical purposes.

Naturally, the higher the age, the fewer years an individual will continue to remain alive.

According to the mortality table, an 80-year-old individual will statistically die before a 50-year-old person will.

Then when a life insurance company calculates the premium for a policy at a certain age, expenses that will be incurred by the company to issue, deliver and maintain the policy, and interest that can be earned on the premiums are figured into the equation.

The “mortality, interest, expense” calculation is the reason life insurance works.

Since out of 10,000,000 individuals at a certain age, only a small percentage will die this year, the remainder will continue to pay their premiums, thus supplying funds which can be invested and placed in reserve for future claims payments.

Earnings from invested premiums offset mortality and expense charges and allow the life insurance company to be profitable and have money available for future claims.

Term insurance policies allow for life insurance coverage for limited periods of time, and permanent policies have a built-in reserve, called a cash or surrender value, which offsets increasing mortality charges in future years, and keeps the premiums level over the lifetime of the policy.

Life insurance is not a new phenomenon either as the formality of companies which specifically market life insurance were in existence as we know them today in the late 1700’s and early 1800’s.

The life insurance industry and most of its companies have been a strong industry from a financial standpoint, and it has weathered all of the fiscal hard times of the past 200 years.

What Kinds of Life Insurance Policies Can Older People Buy?


Older people in their 70’s, 80’s and beyond can purchase the same types of life insurance that anyone else can, although the prices are going to be higher and there may be some modifications involved.

One type of life policy that is popular is the burial or final expense policy. The cost of final expenses at a person’s death is in the $7,181 to $15,000 according to LIMRA (Life Insurance and Market Research Association.)

Since many of the applicants for final expense policies are older individuals, there are several different forms of policies that have been created to meet the needs of the older applicants and to have still the capacity for companies to underwrite the policy.

A standard final expense policy will offer an immediate insured coverage or modified coverage of some type, depending upon the current health of the applicant of the life insurance.

There is normally a limited questionnaire regarding the current health of the proposed insured, as well as questions about medical history, such as heart, cancer, blood pressure, and other diseases that would affect mortality in the short term.

If a person has a medical history such as heart attack, heart surgery, cancer, or other more serious ailments, the applicant is offered a modified type of policy.

A modified policy might be in the form of no death benefit for the first two years of the policy, and then beginning with the third year of the policy, full coverage from that point on.

If the person should die within the first two years, the total amount of premiums paid in will be refunded to the beneficiary plus an interest rate of 12  to 20 percent for example.

Life Insurance Used For Business Purposes For Older People

Business life insurance is used for several purposes, and older people are routinely covered with life insurance.

Of course, individuals have to pass the requirements of health history and background information, but a large number of older individuals still purchase coverage, or the business does at higher prices.

The following offers descriptions of some of the primary uses of business life insurance:

Key Man (or Person) Life Insurance

This form of coverage makes a business the beneficiary of a life insurance policy because the key employee is responsible for a good portion of the profits due to special skills or relationships with customers.

Buy-Sell Life Insurance

Buy-Sell life insurance is used to fund a “Buy-Sell” agreement that is executed between partners in a business and their estates. In a partnership, if a partner dies, the partnership is dissolved, and a new one must be formed.

In the process, the life insurance is paid to the deceased’s partner’s estate, leaving the surviving partners the opportunity to reform the partnership.

The same concept of buy-sell is used in a close corporation where the stock is exchanged from the deceased stockholder’s estate and the corporation. The family receives the value of the stock of the deceased through the life insurance, and the corporation receives the stock.

Deferred Compensation


In a deferred compensation plan, a permanent cash value policy is purchased on the life of the employee, owned and paid for by the employer, with the promise to the employee of a retirement benefit.

The policy provides the funds for the plan, and a death benefit will be paid to the insured’s family if an early death occurs.

Executive Bonus

Also known as a double executive bonus, funds that will be used to pay the premium are bonuses to the employee who pays income taxes on the amount. The employer also bonuses the amount of the tax, making a favorable situation for the employee.

This is used as an incentive to hire and retain key employees. It also makes the cost of the insurance deductible as bonuses or wages to the employer.

Estate Costs

Life insurance is frequently used to cover administration, costs, and taxes that occur for the administration and final expenses of the settlement of an estate. This is to cover state as well as federal costs.

All of the business uses of life insurance frequently are use to insure people of older ages, even those in their 80’s and 90’s.

Permanent life insurance is the predominant form of life insurance used. The business can afford it, and it will either capitalize on the death benefit or have access to the cash values.

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