Buying Life Insurance After Turning 80

| March 7, 2011

This post is not a post with solutions to the problem of purchasing life insurance for a person over 80 years old. It’s more like a wake up call for anyone with elderly relatives. If the responsibilities of paying for the funeral expenses fall squarely on your shoulders, you should read the rest of this post.

Here’s the Situation

Our father purchased a term life insurance policy some years ago. Not being the child designated to meddle in my father’s affairs, I assumed his financial affairs were in order. You see, I was the child nominated to handle my mother’s affairs when she became terminally ill several years ago. Not wanting to endure another emotional and exhausting situation like that with our father, we nominated another sibling to take the leadership role with our dad.

Turn of Events and Rude Awakening

Recently our dad began showing signs that he is unable to take care of himself. In addition to his declining health, he’s becoming increasingly intimidating and abusive to his hired help. With the handwriting on the wall, the siblings decided to make sure his affairs were in order so when the inevitable happened; we would be able to take care of his funeral arrangements.

Here’s where the problems unfold. Our father, who is now 81 years old, had a term life policy which terminated when he turned 80. Yes, in essence, he has no life insurance and if he were to pass away, we would have to pay for the arrangements out of pocket.

With the cost of a decent burial rising, having children in college and a few unemployed siblings, taking on the cost of a funeral will prove to be a large financial burden. Of course, the first thing we looked to do was purchase any type of life or burial insurance policy we could find to help offset the funeral costs. Here’s the problem we faced:

  1. Most insurance companies (including AARP) are not interested in providing term life insurance for individuals over 80 years of age.
  1. Colonial Penn, an insurance company that offers guaranteed life insurance policies for individuals up to 85 years of age was unable to help us because of insurance laws in my father’s home state. New York state limits life insurance companies from selling new term life policies to individuals over 80 years of age. To confirm this I called the New York State Department of Insurance 1-800-342-3736 and they corroborated Colonial Penn’s statement (BTW, New York state isn’t the only state with such legislation. Call your own state’s Department of Insurance for legislation on life insurance and the elderly).
  1. The only option is whole (or flexible which is not recommended in our situation) life insurance polices. Such polices are subject to medical exams and underwriting requirements. Our father, unfortunately, is far from the picture of health and most probably would be turned down after the medical exam.

Our Life Insurance AlternativeLife Insurance over 80

We created a fund into which the siblings are putting money aside towards our father’s burial costs. We are doing the best we can to make his final days comfortable, but we do have to prepare for the inevitable.

Another option to investigate is what’s called “pre-need” insurance which is offered by the funeral home. In essence, you enter into an agreement with the funeral home by pre-funding the funeral expenses. One problem with such an agreement is that if prices go up, so will your pre-need insurance agreement.

Words of Advice

If you have a loved one that is over 70 years of age, whether it is comfortable or not, find out whether or not there is enough life insurance coverage in effect to take care of what needs to be done in the event of their passing. You had better take care of it now while they are still young enough to get insurance.

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Category: Insurance, Life

About the Author ()

Felicia A. Williams is a wife, mother, freelance writer and owner of Tidbits About Money.

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