Fact CheckedLife insurance for seniors over 70 Canada is more important than ever because people live longer and lead more fulfilled lives!
Okay, let’s get real here. Your 70th birthday isn’t what it used to be. In my youth, people in their 70s were often in poor health and thinking about final expenses.
It’s a very different story today. We see healthy, fit 70-somethings everywhere! In my gym, an extraordinary lady with vibrant blue hair can run longer distances than most people in their 30s.
You have to love it!
People in their 70s are often still working and taking on responsibilities. So, how does life insurance for seniors in Canada fit into the equation today?
“One of the things in common about the world’s longest-lived people is that they have a strong sense of purpose as they grow older. Much of this is because of the role of elders in traditional culture. Unlike in the United States, older people are respected and looked up to for wisdom and advice. We have a challenge in this regard. Your job is to find a way to feel a strong sense of purpose in your life, despite the messages our culture sends about aging.”
Seniors Life Insurance CanadaÂ
Life insurance for seniors over 70 in Canada should be considered for many reasons! Here are just a few situations where life insurance is a no-brainer in your senior years:
- Final Expenses: This is the most obvious reason. Who wants to leave their family to foot the bill when they pass away? A funeral costs anywhere between $5K and $20K, which is serious cash. This kind of funeral bill is going to be financially devastating for any child, spouse, or family member. Don’t forget that when you are gone, your loved ones are responsible.
- Debt & Taxes: When you die, your debts and tax obligations attach to your estate. Many seniors like to think ahead and purchase a policy to cover these bills.
- Business Responsibilities: Yep, you may have a business. If you want to expand it, you might be taking on debt. Often, a bank requires a life insurance policy as collateral to ensure debt is paid if you die.
- Children or Grandchildren with Special Needs: If you have a child with special needs, they require help no matter how old you are. Trusts are often set up to protect these dependents with life insurance coverage.
- A Desire to Leave a Gift: Do you have family or a charity you’d like to leave a gift to? Life insurance is a terrific way to do this.
What Type of Life Insurance Should You Buy in your 70’s?
Permanent life insurance is more viable when you’re in your 70’s.
Remember, we recommend term life insurance for most people most of the time, but this changes as clients age.
One of the draws of term coverage is that it’s affordable and fills a temporary need for income replacement.
For obvious reasons, income replacement becomes less important as you age. Also, premiums start to skyrocket the older you get.Â
This is because life insurance is a business, and the older you are, the bigger risk the company takes that your beneficiaries will make a claim. That’s why permanent life insurance is a better fit in your 60’s and 70’s.Â
Permanent life insurance offers coverage until the day you die and typically has a cash value component. So, if you are looking to leave a nest egg for someone, pay for final expenses, or take care of dependents with special needs after your death, you need something that will pay out no matter what.
Permanent life insurance for seniors in Canada is the solution.
There are two different types of permanent life insurance: whole life and universal life. Also, there are two options in terms of underwriting. You can get traditional insurance (which requires a medical exam) OR no medical exam life insurance.
Traditional Permanent Policies
You can qualify for a traditionally underwritten policy with a medical exam when you’re over 70.Â
The catch? You have to be in pretty good shape. If you’re healthy, unafraid of needles, and have some patience, I highly recommend medically underwritten coverage. It’s cheaper and generally has better features and guarantees.
But if you have diabetes or another serious medical issue, this may not be the approach you should take.
BUT DON’T ASSUME you are high-risk!Â
This is when you should consult an independent life insurance agent. We review your history to determine whether a company meets your needs.
So if you have diabetes…
Now what? Are you out of luck?
NOPE!Â
Call Policy Architects today to see what we can do to help!Â
Universal Life Insurance
Whole life insurance is the most popular permanent product with seniors. However, guaranteed Universal Life Insurance is another tool that shouldn’t be overlooked.
This is because it provides coverage until the day you die at an affordable price point and is also flexible.
… but beware, this type of coverage typically DOES NOT build cash value (although this is not always true). So, in essence, it acts like a term policy without the temporary nature of that type of policy. With guaranteed Universal life coverage, you’re paying ONLY the pure cost of the insurance.
If you want to find out more about Universal life insurance, click here!
“While we can’t stop the clock and prevent ourselves from aging, there’s a lot we can do to improve our chances of leading a longer, healthier life. The good news is, there’s new research shows that the lifestyle choices we make — even well into our 70s and older — remain important for healthy aging, and to how our bodies and minds hold up in the later decades of our life.”
Seven Ways To Stay Healthy In Your 70s And Beyond!, United Hebrew GeriatricÂ
Simplified & Guaranteed Issue Life Insurance
No medical exam life insurance is one of my favorite tools for seniors.
If you have health issues that prevent you from qualifying for a traditional policy with a medical examination, do not despair!
Hurrah!
There are policies you can purchase without undergoing a life insurance medical exam.
Even though no medical life insurance does NOT require a physical, you must answer several specific medical questions. This is a good thing. In fact, the larger the number of medical questions you answer, the better and more secure your coverage is.
No medical life insurance plans for seniors are divided into 3 Tiers of eligibility.
TIER 1 – Elite or Immediate
The First Tier is described as Immediate or Elite, depending on the carrier. It’s for consumers in good health but may still have mild medical issues, such as well-managed diabetes, high blood pressure, cholesterol, etc.
Many seniors with health issues are surprised they qualify for the Immediate or Elite coverage level.
Don’t assume the worst. Speaking with an independent broker who knows this product niche is essential.Â
Tier 1 Example
A 70-year-old female non-smoking client is looking for life insurance. She is 5’4″ and weighs 180 lbs. Twelve years ago, she had breast cancer, and she currently has type 2 diabetes and high blood pressure. She seeks $10,000 of Whole Life coverage to cover her final expenses.
Her Estimated Premium is $45.31 per month
TIER 2 – Deferred or Modified
The Second Tier is a deferred benefit plan for applicants with moderate to serious health issues.
Someone who’s had a heart attack or stroke history is a good example. You will likely be assessed at this level if you’ve had bypass surgery and/ or a stent procedure.
The great thing about Tier 2 is if you had any of these issues more than 24 months ago, you may still qualify for Tier 1 coverage, which is also the most affordable.
All Tier 2 programs, regardless of the life insurance company, come with some waiting period. What does this mean? If you start one of these plans, you’re covered for accidental death from day one.
However, depending on the product or carrier, you are NOT covered for death by natural causes until 1 or 2 years into the policy.
How does it work? If you start one of these plans and, God forbid, die of a heart attack 18 months in, your family receives all the money you paid into the policy plus simple interest. Once you make it past the 2-year mark, you’re loved ones receive the death benefit regardless of the cause of death.
This is the insurance company’s way of mitigating risk with individuals who have moderate health issues.
Tier 2 Example
A 72-year-old male non-smoking client is seeking $10,000 to cover final expenses for his family. He is 6’1″ and weighs 250 lbs. He underwent a triple bypass with two stents four years ago and has type 2 diabetes and high blood pressure.
His estimated Premium is $85.02 per month
TIER 3 – Guaranteed Acceptance
The Third Tier is for consumers who have severe health issues like life-threatening cancer or congenital diseases like Alzheimer’s and Dementia. The beauty of this tier? It’s a guaranteed acceptance level, meaning you cannot be denied coverage, no matter your situation.
As you can probably guess, Tier 3 coverage has a 2-year waiting period and is the most expensive.
Tier 3 Example
A 75-year-old female client who smokes is seeking $10,000 in coverage for final expenses. She is 5’4″ tall, weighs 240 lbs, and has type 2 diabetes, high cholesterol, and vascular dementia.
Her estimated Premium is $85.57 per month
No Exam Life Insurance for Seniors in Canada – Final Word
If you’re a senior thinking about having no medical life insurance in your 70s, it’s essential to seek the advice of an independent broker. Many nuances between carriers influence how these products are underwritten.
For example, let’s say you have well-managed diabetes, and your medication has changed in the past 12 months (increase or decrease in dosage, introduction, or replacement).
With carrier A, you qualify for Tier 1 coverage. However, with carrier B, you only qualify for Tier 2 protection. This means you pay more, and your policy has a 2-year waiting period.
Which life insurance company would you like to apply to? Carrier A, of course. Are you working with an agent who knows the difference?
Is Life insurance for Seniors over 70 Canada Worth It? It Sure Is! Call Policy Architects Today!Â
Life Insurance for Seniors Over 70 in Canada is a topic I love. As I get older, I find myself more interested in estate planning. I encourage all my clients to get started while they’re young and healthy.
… but if you are like me and wait until later in life, many options are much more affordable than you think.
A big part of my life insurance business is selling final expense plans.Â
If you are over 70 and want to take this burden off your loved ones, why not take out a small, affordable policy that covers all the expenses of your cremation or funeral?
The monthly premiums are affordable, and it’s one of those gifts your loved ones will truly appreciate.Â
Are you looking for life insurance quotes? We’ve got you covered. Life insurance for seniors over 70Â is not a pipedream.
