Reaching the age of 65 is a milestone. It is the eligibility age for Medicare, so you are mostly likely enrolled in Medicare Part A (and possibly Part B) at this point.
Age 65 is also the customary retirement age. Age 65 was selected as the retirement age in 1934 for “old age pension laws” in most states. So, it’s been ingrained into Americans to think 65 is the standard age of retirement.
However, things have changed a lot since 1934. People are living longer and concepts of retirement are quite different today. Because the mortality age has increased over the years, life insurance rates have dropped.
In this article, we will look at issues facing people shopping for life insurance in their mid 60s. Whether you are retired or not, the need and/or desire for life insurance is an important consideration. We will also look at sample guaranteed universal life insurance rates for 65 year olds. The focus of this article is guaranteed universal life (GUL), but we will also touch on other life insurance options that might work better for you.
We fully understand that every situation is different and most of our clients purchase term life insurance or a combination of term and permanent. Hopefully, this article will bring some clarity and provide useful information in your research.
For Instant Term and Guaranteed Universal Life Rates, Please Use the Rate Calculator on this Page.
You might have heard about “term for life” or “term life that doesn’t expire” and would like to find out more. If you are just starting your research and would like to learn more about Term for Life (GUL), then please check out our articles reviewing GUL and covering the pros and cons of GUL.
When A Short Term Policy Is A Better Option Than Guaranteed Universal Life
If your goal is to provide temporary insurance for the next 5, 10 or 15 years, then a term policy should suffice. Perhaps your spouse or another family member depends on your income. You might have some outstanding debt. There are various reasons why coverage is needed for just a short period of time.
Even if the need for life insurance is just 5 years, you will find that very few carriers offer 5-year term insurance. The cost is usually more than a 10-year term. We recommend purchasing a 10-year term and then cancelling it when the need for coverage ends.
Another option is to reduce the face amount with a commensurate reduction in premium as the need for coverage diminishes.
20 Year Term Compared to Guaranteed Universal Life (Term to 100)
A $100,000 20-year term policy for a 65 year old male rated Preferred would run $115/month. A GUL guaranteed to age 90 (Term to age 90) would run $164/month. A GUL guaranteed to age 100 (Term to age 100) would run $179/month.
If you were to die after age 85 with a 20-year term, you would have paid $27,600 and there would be no death benefit.
If you were to die at age 88 (for example) with a GUL to 100, you would have paid $49, 400 – However, your beneficiary would receive a $100,000 tax-free benefit.
If you died at age 93, you would have paid $60,144 in premium. However, your beneficiary would receive the same $100,000 death benefit.
Those are some possible scenarios to help you evaluate your options.
Life Insurance – Leaving an Inheritance
Sometimes, the decision to purchase life insurance isn’t based on number crunching and a needs analysis. You might simply want to ensure your spouse and/or loved ones are cared for financially after your death. Perhaps your kids are struggling and you want to help them by leaving an inheritance. This can be accomplished with a GUL and other permanent products.
A lot of folks like GUL because it is not complicated and it is fully guaranteed. There are no “moving parts”, so as long as the level premium is paid, the death benefit is guaranteed to be paid. We’ll compare term and GUL further after we take a look at the rates…
Guaranteed Universal Life Insurance Rates for 65 Year Olds – Lowest Rates on The Market
The rates in the tables below are sample rates as of September 2016. Rates fluctuate frequently, so we recommend using our instant quote engine on this page (or call us for a customized quote) for the most recent, up-to-date rates.
Male
- Non-Tobacco: Preferred (2nd best rate) and Standard (4th best rate).
- To 100 Guarantee Age
- Rates are monthly
| Male Face Amount | $50,000 | $100,000 | $250,000 | $500,000 |
| 65 year old – Preferred | $113 | $179 | $428 | $832 |
| 65 year old – Standard | $129 | $227 | $532 | $1052 |
Female
- Non-Tobacco: Preferred (2nd best rate) and Standard (4th best rate).
- To 100 Guarantee Age
- Rates are monthly
| Female Face Amount | $50,000 | $100,000 | $250,000 | $500,000 |
| 65 year old – Preferred | $101 | $151 | $349 | $672 |
| 65 year old – Standard | $107 | $183 | $425 | $828 |
Term to 100 – A Relatively New Concept
Carriers introduced guaranteed universal life to the marketplace in the early 2000s. Prior to GUL, if you wanted permanent life insurance, you had to select Whole Life (which is much more expensive than GUL). You also could choose a traditional universal life policy. The cost of UL was and is much lower than Whole Life insurance, but the risk of lower interest rates was a downside. So, it was essentially Safe and Expensive or Risky and Inexpensive.
When GUL came onto the scene, it created quite a stir. It really fills a need for those who want permanent life insurance coverage at a much lower cost (compared to Whole Life), but with no risk.
Due to it’s uniqueness and similarity to term insurance, GUL was tagged as “Term for Life” and “Term to age 100”. A word of caution: You can outlive your GUL if you select a lower guarantee age. So, the names Term for Life and Term that doesn’t expire are appropriate with much higher guarantee ages.
The list below is to summarize the key similarities between term insurance and GUL:
- Premiums are Guaranteed Level
- Death Benefits are Guaranteed Level
- Not Designed to Build Cash Value
Does Guaranteed Universal Life Have A Cash Value Component?
Even though some GUL policies have a “cash value” component, as you will notice in an illustration, it is only because the product is built on a UL chassis, so to speak. The illustrations typically show minimal cash value growth for the first 5 to 10 years. However, the cash value diminishes to zero quickly. Again, GUL is not designed to build cash value.
Some carriers call their GUL products “no-lapse universal life”. The reason for this name goes back to the market risk described above. Traditional UL policies have variable interest rates and they were often illustrated at unrealistically high rates. Many policies lapsed when interest rates plunged. So, the name “No-lapse Universal Life” brings the assurance that this universal life product is much different and there is no risk of the policy lapsing.
Concluding Thoughts
Although GUL is very simple to understand (with no moving parts), there are some differences between products. Some carriers offer unique policy benefits, such as a chronic illness benefit and return of premium benefit. These policy provisions are “built-in” benefits at no extra cost. Other carriers offer these benefits as riders only (with additional premium).
We can help you zero-in on the carriers that have the lowest premiums and provide the best value.
We always recommend working with an experienced, independent agent. You deserve to see all the carriers, not just 50%, 75%, or even 90% of the available carriers. A true independent agent works with many carriers that are not offered through the mega-agencies.
A lot of information was covered in this article, so if you have questions or would like to see customized quotes, please call us for a free consultation.
