Category: Age 70

Term life insurance and conversion

by

September 11, 2013

3:18 PM

Leave a comment on Term life insurance and conversion

20 year term, 30 year term life insurance, 68 years old, 71 year old, 71 years old, Age 68, Age 70, Age 71, Conversion, exchange, term

Carpe Diem

In follow ups with clients and talking to life insurance term policy holders shopping for coverage,  I am struck again and again how important conversion is to term life insurance.  The lowest term price is the easy part to figure out. Conversion is the quality feature.  If you have a health problem during the term period, conversion may be the only game in town for new coverage. For example:

Timely conversion:
John, 42 years old and in excellent health, starts a $500k 30 year term policy at the preferred best rate.  At 61 years old he has a heart attack. At 62 years old with the term coverage ending, he converts $250k of his term coverage into a universal life policy at the preferred best rate, no underwriting,  by just signing a couple of forms.

Past the conversion deadline:
Jill, 51 years old and in good heath, starts a 20 year term policy with the preferred non tobacco rate.  At 68 years old she develops stage I breast cancer.  At age 71 with the term policy ending, she discovers her conversion period ended at age 70.  Instead of converting her policy at preferred a year before, the most favorable offer she finds for new coverage available has a flat extra charge of $7 per thousand for 5 years at the standard rate.

Pay close attention to which carriers has the best conversion options when shopping for term. Policy holders note term conversion or exchange rules and the deadline for conversion as a vital record.

Turning 70

by

September 23, 2011

4:07 PM

Leave a comment on Turning 70

Age 69, Age 70, Burial insurance, Conversion, Estate Planning, Final expenses, guaranteed universal life, In your 70's, Seniors, Term Life Insurance, Whole Life

About to turn 70?  Just turned 70?  70 is a very good milestone to finalize life insurance planning.


Current policy owners

Term policy holders:  Health not what it used to be?  Many term policies allow conversion to permanent to age 70, and the definition of age 70 usually is nearest attained age, meaning up to age 70 1/2.   There is no health evaluation for conversion.  Any agent can help on conversion.   Please contact me for details.

Permanent policy holders:  is it really permanent?  Do not assume your coverage will last a lifetime.  Most permanent policies sold over the last 30 years are universal life (UL), not whole life.  UL’s are tricky depending on their structure and cash value.  A great many will lapse for insufficient cash value.  Conduct a policy review to evaluate how long your policy is projected to last.  Request an in force illustration from your carrier.  It may be a better deal to replace your current coverage by transferring the cash value into a new plan that has lifetime guarantees.   Regardless, keep in mind cash value can be used to offset your premium payments.   This may be an appropriate strategy depending on the amount of cash value, and is often the best way to wind down the policy for those in failing  health.

 

New coverage       Available at most health levels.  You’d be surprised.

The best is called guaranteed universal life.   Premiums and coverage are locked in for life, to age 121,  with a lapse protection guarantee.   Click here for age 70 quotes for $25,000 to $5,000,000 in coverage, or refer the right hand side of my website for quotes.


Final Expenses   (Burial Insurance)   $3,000  to  $25,000

Guaranteed universal life.    There are also small whole life plans.

 

Estate Planning   $25,000 to  $5,000,000

Guaranteed Universal Life.   Companies are very competitive and willing to write coverage for people in their 70’s.

 

Term life insurance is not a good choice.  Term is less expensive because you will probably outlive it.  If  you need term life insurance, to pay off a debt or other obligations, I strongly recommend Genworth’s Term UL, because it automatically converts over to Universal life insurance to age 105 at a fixed rate.

 

Image source:  Wikipedia Commons

Financial planners may be wrong on life insurance

by

September 22, 2011

12:15 PM

Leave a comment on Financial planners may be wrong on life insurance

Age 55, Age 70, guaranteed universal life, In your 50's, In your 60's, In your 70's, Policy Review, Universal Life

Do you have a life insurance policy purchased in the 1980’s or 90’s? It’s time for an independent review.  Do not necessarily expect the agent or financial planner that sold it to you to give you objective recommendations on its status. I reviewed a policy this week where a financial planner gave years of bad advice and continued to do so, even as the policy projected to go off the cliff. A financial planner may be unqualified, too busy or lack the financial incentive in revamping your life insurance coverage. Here’s what you should recognize if you bought a policy in that era:

  • Do not assume the policy is whole life.   Generally, they are universal life (UL).    There’s a big difference.

Continue reading “Financial planners may be wrong on life insurance” →

Couple considers life insurance as estate plan for children

by

June 6, 2011

3:56 PM

Leave a comment on Couple considers life insurance as estate plan for children

Age 69, Age 70, In your 60's, In your 70's, Survivorship Life Insurance, Survivorship Universal Life

A couple nearly 70 years old and in good health asked a newspaper financial columnist if it was too good to be true that a $200,000 life insurance policy could provide an $800,000 tax free benefit for their children.

Well, $800,000 sounds like a bit of a stretch, especially if you want to play it safe with a guaranteed policy.  Hovever, the general concept is valid.

They are talking here about a survivorship universal life policy, called a SUL or second-to-die.   And they’re probably talking about the $200,000 as a single pay, one single lump sum payment with no further premiums.    The columnist gave a fairly good answer, and warned about guaranteed and non guaranteed elements.   Well, that’s a traditional SUL, and to get anywhere near $800k with a $200k single pay, you’d have to look at a SUL.

There is also Guaranteed SUL, of G-SUL.  The benefit won’t be as high, but it’s guaranteed to age 120, so you don’t have to worry about the policy’s performance or outliving your policy.

Here’s what a Guaranteed SUL looks life for someone in “good” health.  Two rate classes, preferred and Non-Smoker Plus, with Prudential are health rates that mean good.  Prudential is generally the strongest carrier right now for G-SUL, but you would have to compare rate given the couple’s health factors.

Continue reading “Couple considers life insurance as estate plan for children” →

Permanent life insurance more suitable for seniors than term

by

June 6, 2011

12:50 PM

Leave a comment on Permanent life insurance more suitable for seniors than term

Age 60, Age 61, Age 62, Age 63, Age 65, Age 66, Age 67, Age 68, Age 69, Age 70, Age 71, Age 72, In your 70's, In your 80's, Product

Over the last few days, I compared life insurance websites for seniors in ages 60 through age 72 by Google searching life insurance and adding an age, “life insurance age 68”  for example.   It’s misleading for those in their 60’s and 70’s to see at the top of Google’s list websites with term life insurance given such prominence. Term is not usually the right product for seniors.  The primary purposes of term are to replace lost income or settle an outstanding debt like a mortgage.   Sure if you have less than 10 years to go on a mortgage, term life insurance might make sense.   I would surmise term gets promoted and sold simple because it’s less expensive.  But if one buys term in your 60’s or 70’s, chances are you will outlive your term, and then you’ve paid all that premium for nothing.  Even if you take the best term out there, Genworth, and have the option to convert to a fixed rate universal life, you have to pay higher premiums as your age goes up.

For the majority of people in their 60’s and 70’s permanent life insurance is the most suitable coverage.  If at all healthy, guaranteed universal life insurance is the best.  Coverage starts at a $25,000 benefit amount, and premiums are affordable.  North American has an excellent G-UL right now.   There are also small whole life policies, called simplified issue because there is only a short questionnaire and no blood term.  Coverage starts at a $2,000 a $3,000 benefit amount.   Either choice is better than term because it’s fixed rate coverage for life.