Life insurance after 60: what changes, what is still available, and what to protect

What changes after 60

Three things. The cost of insurance rises every year, so a new policy at 65 costs far more than the same policy would have at 45. Health underwriting matters more, because more people have conditions that affect their class. And the reason for coverage often changes, from replacing a paycheck to covering final expenses, leaving something to grandchildren, or protecting a spouse’s income.

Start by naming the purpose and the amount. The Maryland guide’s questions apply at any age: who depends on you, how your family would pay final expenses and debts, and whether there are people or organizations you want to leave money to.

The options that still exist

If you are healthy, fully underwritten term or whole life is usually still available and usually the lowest price per dollar; the NAIC notes term is commonly issued for 10 or 20 years or to a set age. If you have health conditions, simplified-issue and guaranteed-issue policies exist at a higher price, often as the small final expense policies described in the guide on this site. Some employers and associations offer group coverage that continues into retirement; check before it lapses.

Each option answers a different need, and none is right for everyone. Paola can explain how each works for a Maryland resident; this page does not recommend one.

Check the policy you already own before buying anything

An old whole life policy may have cash value, be paid up, or carry a loan you forgot about. The Maryland guide explains where to look: the policy’s cash value table, the company itself, and the statements. It also warns that “paid-up” promises based on non-guaranteed values are illegal, so if you were told a policy would pay itself up and it did not, the Maryland Insurance Administration may be able to help.

Do not cancel existing coverage because a new policy has been discussed. Replacing a policy restarts the two-year contestability period, the guide notes, and a new policy at your current age will almost always cost more. Compare both contracts in writing first.

• What is the current cash value, and is there a loan against it?
• Is the policy paid up, or are premiums still due, and until what age?
• Does the death benefit still match the need, or can it be reduced to lower the premium?

Selling a policy: what the Maryland guide says to check

Companies offer to buy life insurance policies for cash, in arrangements called life settlements or viatical settlements. The Maryland guide explains that the payment is more than the cash surrender value but less than the death benefit, that Maryland requires the brokers to be licensed and registered with the Maryland Insurance Administration, and that commissions can be as high as 30 percent.

The guide’s cautions are specific: meet with a tax or financial advisor first, because the proceeds may be taxed and may affect Medicaid or other assistance; require the settlement money to go into an independent escrow account; and understand that your medical records will be released to buyers. Get several offers, and ask whether creditors could claim the money.

For families: finding a policy after a death

Many families are not sure whether a parent had a policy. The Maryland Insurance Administration offers a free life insurance policy locator, hosted with the NAIC, that asks participating companies to search their records for policies and annuities on a deceased person and to contact the beneficiary if one is found.

Before using it, gather the person’s full name, date of birth, date of death, and Social Security number, and check papers, bank statements for premium payments, and former employers for group coverage. The Maryland guide also explains how death benefits may be paid, including retained-asset accounts, so beneficiaries know their options.

Questions to ask, and where your information goes

Take these to Paola or any licensed producer and ask for the answers in writing. Health details, your date of birth, and payment information go only in the carrier’s application. The Maryland Insurance Administration’s advice on buying applies: verify the license, review every application answer, and make the check payable to the company.

Be cautious with mail and phone offers aimed at seniors that promise coverage without questions; the Maryland guide explains what that promise costs.

• What does this policy pay if I die in the first two years?
• Is the premium fixed for life, or does it rise at an age I will reach?
• Would keeping or reducing my existing policy cost less than buying this one?
• Who should be the beneficiary now, and is the designation current?