What to know about life insurance after age 65

Dear Toni: My mother passed away with no life insurance, and our family had to pay all of the extra funeral costs out of pocket.

I recently turned 65, have high blood pressure, am retired and have no life insurance. I do not want my kids to go through what I experienced with my mother.

Please explain what kind of life insurance policy I should consider. — Eva, Houston

Dear Eva: Many Americans wait too long to purchase a life insurance policy and cannot qualify because of health issues. They do not realize how your health situation can affect applying for an insurance plan.

Life insurance can help your family cover your end-of-life costs, and knowing that there will not be a financial strain on your loved ones, can give you peace of mind as well.

Let’s explore the different life insurance plans that are available for those 65 and older and whether underwriting may be required:

Term insurance: This type of policy offers a 10-, 15-, 20- or 30-year period, depending on your insurance company. Term insurance premiums are lower and do not increase during the plan’s policy period. These plans can be converted to a permanent whole life plan while the policy is in force. Purchasing term insurance at a younger age and converting to whole life past 65 is an option worth considering.

Whole life: This is a permanent life policy that combines a death benefit, level premiums and cash value growth that can be used for any reason during your lifetime. Whole life policies generally cost more past age 65. Choosing a lower death benefit may control the price and be a good option.

Final expense/burial insurance: This is a small whole life policy that is meant to help your family pay for your funeral, burial and other expenses, such as outstanding medical bills, after your death. Plans typically range from $5,000 to $25,000 in death benefits, depending on the insurance company.

Guaranteed-issue whole life: This is a whole life policy for those with serious health issues who cannot pass medical underwriting for a typical life insurance plan. The policies range from $2,000 to $25,000 in death benefits with no medical exam or health questions to answer. If you die within the first two years from natural causes (other than accidental), your beneficiaries will receive only the total of the premiums paid plus interest, usually 10 percent. After the two-year waiting period, the full benefit is paid for death from any cause.

Toni King is an author and columnist on Medicare and health insurance issues. If you have a Medicare question, email info@tonisays.com or call 832-519-8664.