If you’re over 85 years old and worried about how your loved ones will do financially when you’re gone, you may have considered taking out a life insurance policy.
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Whether your term life insurance policy expired, or you went through your savings because you’ve lived longer than you expected, it can be frightening to face your family at 85+ years old and tell them you have nothing to leave them.
Fortunately, there is burial insurance for seniors over 85. It’s not as common as other insurance policies, and only a handful of companies offer it, but it does exist.
Here’s what you must know.
What is Burial Insurance?
Burial insurance has many names – final expense insurance, funeral insurance, or guaranteed life insurance. No matter what you call it, the insurance does one thing – covers your loved ones upon your death.
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It’s not a policy that leaves behind a financial legacy, so don’t think you’ll be leaving your family with the money they can live off of. Instead, it’s a policy to cover your final expenses.
This could mean any of the following:
Think of it as an insurance policy to ensure you get the final arrangements you want when you die.
How Does Burial Insurance Work?
Burial insurance or final expense insurance works a little differently than other policies you may be used to. For example, if you’ve gotten term life insurance before, you went through an application process and probably a medical exam too. You were then placed in a category that determined your premiums. At the end of the term, your insurance expired, which might be why you are where you are today.
Burial insurance is different. It doesn’t expire. It’s a permanent life insurance policy that lasts for your lifetime if you pay the premiums, although, after age 85, they are pretty hefty.
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The insurance has a 2-year waiting period too. If you die within 2 years of taking out the policy, the insurance company likely won’t pay out the full benefit. Instead, they’ll pay your loved ones the premiums you paid to that point plus a small percentage.
If you die after 2 years of taking out the policy, they’ll receive the full amount of the payout, which at 85+ years, is usually a maximum of $10,000.
Can you get Final Expense Insurance over age 85?
Here’s the great thing about such a policy over age 85.
That means anyone can get approved. Now you must find an insurance company that sells to seniors over age 85 as there aren’t a ton of them, but you don’t have to worry about meeting any health qualifications or other requirements.
It’s guaranteed, which means anyone can qualify as long as you can pay for it. You don’t have to answer health questions or undergo a medical exam, so yes, you can get final expense insurance over age 85.
How much Does It Cost?
Here’s where it gets interesting. Final expense insurance costs a significant amount.
The insurance company guarantees coverage. This means they must cover anyone that applies and can pay their premiums. Since the policy is for seniors over age 85, chances are the insurance company will have to payout pretty soon. This makes it a high risk for them.
They make up for this risk by charging much higher premiums. But they also keep the coverage amount down to usually no more than $10,000.
It’s not uncommon for seniors to pay as much as $300 a month for $10,000 in coverage on a guaranteed life insurance policy.
Why Would you Need Final Expense Insurance over Age 85?
While it’s not ideal, there are many reasons people end up buying it at such an advanced age.
You Ran out of Money
It happens to the best of us. You planned as much as you could, and then life happened. Whether you had emergencies you didn’t predict, you lived longer than you expected, or you miscalculated how much you would need if you’re 85 years old and looking at your accounts thinking you have nothing to leave your loved ones, final expense insurance might help.
It will at least give you peace of mind knowing you’re leaving your loved ones with money to handle your final expenses.
Your Term Life Insurance Policy Expired
If you had a term life insurance policy but outlived it, you might wonder how your loved ones will cover your expenses. If you don’t have money to cover your funeral expenses and you didn’t prepay for one, a final expense life insurance policy may be the only way.
You Need Peace of Mind
Some seniors want burial insurance over age 85 for peace of mind. They can die knowing that they left their loved ones with enough money to handle their final expenses. It can bring peace to the family and let everyone grieve the way they want without worrying about finances.
The Pros and Cons of Burial Insurance over Age 85
Like any insurance policy, there are pros and cons of burial insurance. Here’s what you must know.
You provide your loved ones with the coverage they need to pay for your final expensesYou can die with peace of mindIt lasts for your lifetime – it never expires unless you don’t pay the premiumsYou don’t have to undergo a medical examYou can tailor the coverage amount to ensure you can afford the premium
The premiums are high and often unaffordableOnly a handful of companies offer health insurance for anyone over age 85The coverage amount is low
Are there Alternatives to Burial Insurance over Age 85?
There aren’t a lot of alternatives to burial insurance over age 85 because there aren’t many other insurance options available to you. But, if you aren’t yet 85 and thinking about the need to get insurance in the future, think of this.
Do you have savings you can put aside to cover your final expenses?
Some people use a portion of their retirement savings, or they create their own burial expense, investing it so that it grows over time.
You can also ask your family to help with your final costs if you don’t have the funds and you can’t afford to buy burial insurance over age 85.
Burial insurance for seniors over age 85 probably isn’t something you ever thought you’d be buying, but if you’re lucky enough to be alive at 85 or older, consider yourself lucky!
Final expense insurance can help you cover the costs of your end life expenses without leaving a burden on your loved ones. Try to keep your coverage as low as possible to keep your premium costs down and supplement with other funds from your estate so your loved ones can adequately handle your final arrangements.