Are you too old for term life insurance?

At some point, a term life policy may not make sense.

You will often hear that the younger you are when you apply for life insurance, the more affordable your premiums will be. And you may need more life insurance if you’re younger.

Let’s say you are in your 30s with a wife and two young children and you are the sole breadwinner in your family. In that situation, if you die suddenly, your family will undoubtedly be in financial trouble.

Once you reach your 50s or 60s, your need for life insurance may not be as pressing. At that point, your children may grow up and move out of the home, leaving you with fewer people to support.

But you may reach a point later in life when you decide you want life insurance first. Term life insurance can be a more cost-effective option than whole life insurance, as it only covers you for a predetermined period of time and does not accumulate cash value.

But is there such a thing as being too old for term life insurance? Or at what age can you apply?

Your age matters

Term life insurance is possible in old age. But depending on how old you are, you may have a hard time doing this.

Insure.com states that most term life insurance companies will not sell a policy to applicants over the age of 75. And if you’re over 60, you may be able to get a short-term life policy, but you may struggle to find an insurer to write you a 20- or 30-year policy.

See, life insurance companies try to limit their risk. Writing a 20-year term life insurance policy for a 65- or 70-year-old can easily pay for itself. And there is a greater chance of a death benefit being awarded in that situation than an applicant in their 30s or 40s.

Even if you find a life insurance company that will write you a long-term life policy at a later age, you may face very expensive premiums in return. And at that point, you might be better off putting that money away in a savings or investment account for your beneficiaries instead of paying for a life insurance policy.

What about whole life insurance?

Just as you are apt to pay more for term life insurance if you apply at a later age, you may also pay more for whole life insurance. The difference, though, is that whole life insurance tends to be much more expensive to begin with, so you may find that the cost is downright prohibitive.

That said, whole life insurance covers you for the rest of your life. If you are 70 years old and can only get an insurance company to write a 10-year term policy, you may decide to opt for whole life insurance if you want coverage that extends beyond that point.

All told, as you age, your options for purchasing life insurance become more limited. So it is better to consider life insurance at an early age. And if you’re already elderly — say, nearing or retirement age — you may want to wonder if you really need life insurance in the first place.

If you’re worried about paying for a funeral and final expenses for your loved one, you can always set aside funds from your savings or Social Security benefits for that purpose. And you may find that doing so makes more financial sense than paying for life insurance.