You’re searching for term life insurance, comparing policies to find something that will help your family after you die. But all of the policies you’ve seen have a time limit; they end — without any money back — when you reach 80 years old. Maybe you found one willing to cover you to age 85 or rarely, 90, but nothing beyond that. What’s going on? The Melvin Gessner Insurance Agency, serving Willis, TX, has an answer.
It’s Economics
With people living longer and often surpassing age 80 in relatively good health, this limit seems bizarre. But insurance companies do this for a reason: The older you get, the more likely you are to, well, qualify for a payout. This is also why premiums increase as you get older and why many insurance companies won’t sell insurance to people over 80 or 85 years old, even if the policy itself would cover you for many years after that.
Most of the time, the amount of money the insurance company gets in premiums and the amount it would have to pay out in benefits average out. But if the insurance company suddenly has to pay out many benefits for people who had paid for, say, only 5 years, the company might not have enough in funds. Term life policies are often cheaper than other types, meaning the company doesn’t take in as much in the way of premiums. Insurance companies have chosen to halt selling term insurance policies at a particular age to try to keep premiums and benefits in balance.
The solution is to look at policy types other than term. If you want coverage for your entire life span, you’d want to look at policies like whole or universal life. Those can have higher premiums, but the Melvin Gessner Insurance Agency, serving Willis, TX, can help you find a policy that suits both your needs and your budget.
