Are You Too Old for Term Life Insurance?

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

You'll often hear that the younger you are when you apply for life insurance, the more affordable your premiums are apt to be. And you might also have a greater need for life insurance when you're younger.

Let's say you're in your 30s with a spouse and two young children, and you're the sole breadwinner in your household. In that scenario, if you were to pass away suddenly, your family would no doubt be left in a financial lurch.

Your need for life insurance may not be as pressing once you've reached your 50s or 60s. At that point, your kids may be grown and out of the house, leaving you with fewer people to support.

But you may reach a point later in life when you decide you want to first put life insurance in place. Term life insurance can be a far more affordable option than whole life insurance, since it only covers you for a preset period of time and does not accumulate a cash value.

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

Your age matters

It's possible to put term life insurance in place at an older age. But you might have a hard time doing so depending on just how old you are.

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

See, life insurance companies try to limit the risk they take on. Writing a 20-year term life insurance policy for a 65- or 70-year-old could easily mean having to pay out on it. And there's a greater chance of having to pay a death benefit in that scenario than with an applicant in their 30s or 40s.

Even if you manage to find a life insurance company that will write you a longer-term life policy at a later age, you might face very costly premiums in exchange. And at that point, you may be better off just socking that money away in savings or an investment account for your beneficiaries rather than paying for a life insurance policy.

What about whole life insurance?

Just as you're apt to pay more for term life insurance if you apply at a later age, so too are you likely to pay more for whole life insurance. The difference, though, is that whole life insurance tends to be far 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're 70 years old and can only get an insurance company to write you a 10-year term policy, you may decide to opt for whole life insurance if you want coverage that will last beyond that point.

All told, your options for buying life insurance get more limited as you get older. So it's a good idea to consider putting life insurance in place at a younger age. And if you're already older -- say, nearing or at retirement age -- you may want to consider whether you really need life insurance in the first place.

If you're worried about your loved ones having to bear the cost of a funeral and final expenses, you could 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 up for life insurance.