Term life insurance is a low cost form of life insurance, but it becomes more expensive as you age. When you are 77 years old a life insurance company will sell you a policy, but the cost might be prohibitive.You should also be aware of some of the restrictions on buying a policy at this age.
The benefit of buying insurance at age 77 is that it is not out of reach, at least not due to your age. Term life insurance is sold up to age 85. Therefore, if you can afford the premiums, you'll be able to buy a policy. The policy will, of course, be based on your age and health at the time of purchase.
The disadvantage of buying a term policy at age 77 is the cost. Since you are reaching the end of what the insurance company will consider your insurable age limit, premiums will be most expensive. The insurer will likely only sell you a 5 year term, at maximum, since the company cannot afford to insure you beyond age 85 under a term life arrangement. Alternatively, you may buy an annual renewable term life policy. This will carry your coverage up to age 85.
Instead of buying a term life policy, you might want to consider buying a permanent life insurance policy. Even though you might think permanent life insurance is more expensive, it might not be at your age. Since premiums for both types of policies reflect your age, you may find premiums for some permanent policies to be similar to term premiums. The permanent policy carries two advantages over term policies. First, it produces a cash value savings you can use at any time for any reason. Second, the permanent policy provides lifetime coverage as opposed to coverage to your age 85.
Regardless of what you buy, you should consider the cost of what you are paying for. Since premiums are high, you might end up spending more on your insurance policy than what the death benefit will pay over a given period of time. For example, if you buy a $50,000 life insurance policy, but the premiums are $5,000 per year, then the policy only becomes beneficial if you die within 10 years. If you happen to live to age 90, you'll lose money on the purchase of your policy.
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- "Practicing Financial Planning for Professionals (Practitioners' Edition), 10th Edition"; Sid Mittra, Anandi P. Sahu, Robert A Crane; 2007
- "Life & Health Insurance, License Exam Manual, 6th Edition"; Dearborn Financial; 2004