The Pros and Cons of Over 70 Life Insurance Plans

Introduction

What Are Your Options at 70+?

The three main types

• Term life - coverage for a fixed period (10 or 20 years), lower premiums, requires medical underwriting
• Whole life - lifelong coverage with a cash value component, higher premiums
• Guaranteed issue - no medical exam, no health questions, approval guaranteed regardless of health history

Term Life Insurance Over 70

• Most affordable option if you're in reasonable health
• A healthy 65-year-old non-smoker can get $100,000 of 10-year term coverage for around $100 to $135 per month, a reasonable number for what it provides
• Straightforward covers a specific period with a fixed premium
• Good fit if you have a debt or financial obligation with a clear end date

Term Life - The Cons

• Premiums roughly double every 10 years of age, so waiting even a year or two to buy can cost significantly more over the life of the policy
• Availability narrows with age, some insurers stop offering term past 75
• Medical underwriting means health conditions can push premiums up or lead to exclusions
• Coverage expires, if you outlive the term, your family gets nothing

Whole Life Insurance Over 70

• Coverage doesn't expire, it lasts your entire life
• Builds cash value over time that you can borrow against or withdraw
• Canada Life's participating whole life policies have paid dividends for over 170 years without missing a single year, so for the right buyer, this is a stable long-term product
• Useful for estate planning or leaving a guaranteed inheritance

Whole Life - The Cons

• Significantly more expensive than term
• For those aged 70 and older, whole life premiums range from $376 to $462 per month for the same coverage amount
• On average, permanent life insurance costs 5 to 15 times more than term life insurance
• The cash value component takes years to build less useful if your horizon is shorter

Guaranteed Issue Life Insurance Over 70

Guaranteed Issue - The Pros

• No medical exam, no health questions approval is guaranteed
• Accessible for people with serious pre-existing conditions
• Designed specifically for individuals who may not qualify for traditional life insurance
• Useful for covering final expenses, the average funeral in Canada costs $8,000 to $15,000 for a traditional burial, or $3,000 to $8,000 for cremation

Guaranteed Issue - The Cons

• Coverage amounts are limited to $5,000 to $25,000, premiums are higher, and there's a two-year waiting period during which only accidental death is fully covered
• If you pass away from natural causes in the first two years, your beneficiaries receive only a return of the premiums paid plus interest, not the full death benefit
• More expensive per dollar of coverage than any other type
• Guaranteed issue costs 42% more per month than simplified issue final expense for the same coverage amount

So, Is Life Insurance Worth It After 70?

• You have a spouse who depends on your income or pension
• You have outstanding debts you don't want to leave behind
• You want to cover funeral costs without burdening your family
• You want to leave a specific inheritance or charitable gift

It may not make sense if

• You have significant savings that can cover final expenses
• Your dependents are financially independent
• You'd be paying high premiums for a relatively small payout

The Bottom Line