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Age Limits and Impact on Life Insurance


Life insurance can be the ideal way to protect both yourself and those you care about. However, individual insurance companies can put age-related restrictions on life insurance policies. If you’re an older American, you may run into restrictions or reductions in coverage. Age can also impact how much you may pay for a life insurance policy. To see how life insurance options play into your larger estate planning, consider working with a financial advisor

How Age Impacts Life Insurance Policies

Age can have a big impact on life insurance policies and may lead to some Americans having trouble obtaining coverage. But what applies to one insurance company may not apply to another. The type of policy matters, too. The same insurance company may offer one type of policy to those up to age 64 and another type of policy to those up to age 55, for instance.

Each insurance company sets its own age limits and restrictions. However, whole life policies tend to have higher age limits than term life policies. Physical health also plays a role. If you are older but in perfect health, this may not be a problem. But if you have one or multiple pre-existing health conditions, you might be required to take a physical exam.

Finally, age can impact how much you pay for your life insurance policy. As you age, you become more at risk of dying, which in turn is a risk of payout for a term life insurance policy or can be fewer years you pay on a whole life policy. The insurance companies typically give the lowest rates to the policies that they believe will be paying premiums for the longest amount of time.

Life Insurance Options for Older Adults

life insurance age limit

As mentioned earlier, your age may influence what your options for life insurance are, but this varies by company and the type of policy. Here, we’ll look at a few options you may have as well as what age you should be if you’re considering each. The five best life insurance options for older adults are:

1. Term Life

If you are still relatively young, term life insurance may be a good option because premiums are often low relative to the amount of coverage. These policies usually have terms of 10, 20 or 30 years. However, you may have fewer options as you age, and fees may also increase, which makes this one an option but not necessarily a great option.

For example, you may not be able to buy a 30-year term life policy if you are older than 55 years of age. Still, some insurance companies do offer term life policies with shorter terms for those as old as 85. Check with your insurer to see what their options are.

2. Whole Life

Whole life insurance is sometimes a better option for older Americans since it stays in effect until the end of your life. Whole life insurance usually has higher premiums than term life insurance, but it comes with a permanent death benefit for your beneficiaries. They also have a cash value against which you can borrow in the form of a loan while you’re still alive.

Whole-life policies are also less likely to require a medical exam than term-life policies, so this may be a better option if you have pre-existing health conditions. Some insurance companies offer whole-life policies for those up to age 80. However, the fewer years the company expects you to pay premiums, the more expensive the policy will likely be.

3. Universal Life

Universal life insurance is like whole life insurance in some ways as it comes with lifelong protection and has a cash value. Again, the premiums will tend to be high, but you can typically be covered until 100 years old for many policies. The main way universal life differs from whole life is premiums and the death benefit. With whole life, both are fixed but with universal life, both are flexible. Both death benefits and premiums can be reduced to lower your monthly bills or increased if you want more coverage.

4. Guaranteed Universal Life

Guaranteed universal life insurance is a hybrid of whole and universal life insurance. The premium is guaranteed, but you have flexibility with your death benefit. It also tends to be cheaper than whole life insurance because there is minimal cash value accumulation. This tends to be one of the best options for those later in life who don’t expect a large cash value from their life insurance. Some policies provide coverage up to age 121 and can provide hundreds of thousands in coverage.

5. Final Expense Insurance

Final expense insurance is a permanent life insurance policy that is usually available to adults up to age 85. These policies usually only cover your end-of-life expenses, such as funeral costs and medical bills. These policies don’t provide as much coverage as whole or universal life, but the premiums may be much lower.

What Should Seniors Look for in a Life Insurance Policy?

Choosing a life insurance policy that works for you is a fine balance. You don’t want to pay too much, but you also want to make sure you have enough coverage. If you have several dependents and multiple pre-existing health conditions, you likely need a high level of coverage. But if your children have grown up and no longer depend on you and you don’t have significant health issues, you probably don’t need as much coverage.

A financial advisor can help you work through these considerations before you make a final decision. Ultimately, you’ll want to consider the length of time you expect to live, how much coverage you need and how much you can afford before you make your final decision.

Bottom Line

life insurance age limit

Buying life insurance isn’t always as easy for older people as it is for younger people, but that doesn’t mean you don’t have options. If you are younger than 80, you may still be able to find a 10-year term life policy. If not, options such as whole life and guaranteed universal life might be better options. While your options may be somewhat limited if you are older, it’s still possible to find a life insurance policy that meets your needs.

Tips for Life Insurance

  • A financial advisor can guide you through major financial decisions, like buying life insurance. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goalsget started now.
  • Deciding how much life insurance to buy isn’t easy, especially with so much to take into consideration. SmartAsset’s life insurance calculator can help you estimate how much life insurance you need in your unique situation.

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