Why Is Life Insurance for Older People Hard to Get?

Posted on February 26, 2019

Most Canadians have some form of insurance. But, most Canadians don't have enough of it.

While most Canadians have insurance to cover one aspect of their life or one type of emergency, many don't have life insurance. And some people assume that after they hit a certain age, they can no longer get either health or life insurance.

It is true that it is more difficult to obtain insurance past a certain age. But, it is by no means impossible.

In this article, we'll go over some of the reasons it is more difficult to obtain life insurance for older people.

What is Life Insurance?

Before we get into some of the reasons why life insurance is more difficult for older adults to obtain, we'll discuss what life insurance actually is.

Simply put, life insurance is insurance on your life. It can help cover final expenses, as well as costs that may be incurred depending on how you die.

Most people take out life insurance policies when they're younger and just starting a family. This way, if they die of an illness or in an accident, their family will be compensated so that they don't bear a huge financial burden.

In some cases, life insurance policies pay your family the same amount as the salary you typically receive in a year. Other times, the insurance payouts can be in the millions. It all depends on when and how you die.

Some insurance companies will not pay out if the person who the policy is one passes away from suicide. Others will also not cover their beneficiaries if they were partaking in a dangerous activity that led to their untimely death.

Before you take out a life insurance policy, you'll need to ensure it's the right one for you. If you like to skydive, for example, don't take out a policy that would state that your family will not receive compensation if you die skydiving.

Now, we'll discuss why older people have a harder time taking out life insurance policies.

They're Closer to End of Life

While this sounds unfairly blunt, unfortunately, it's the truth. The older you become, the more likely you'll either fall ill or have an accident. Unfortunately, none of us lives forever, and none of us stays in our prime or is healthy for the entire duration of our lives.

In Canada, the average life expectancy is now about 81 years of age. This varies depending on your sex and province but gives an accurate estimation.

This means that most people in Canada will die around this age. And the closer you get to the age of 81, or if you've surpassed it, the more difficult it will be to convince insurance companies to allow you to take out a policy.

Because you're more likely to die at age 76 than at age 35, it'll be more difficult to take out a policy in your 70s. This is because the insurance company knows it is taking a risk by insuring you. They will be more likely to have to pay out, as your death is more likely to occur sooner.

They May Have Health Problems

Some life insurance companies will exclude individuals who have health problems. If you have, or have had cancer, for instance, some companies will outright refuse you. This is partially because those who have had cancer are more likely to experience a recurrence.

While those who don't have cancer may experience, or even die from cancer in their lifetime, the fact that they haven't yet had it counts in their favor when it comes to being insured. The company does not see them as a risk and therefore is more likely to say yes to them.

Health problems are a major reason why individuals are refused insurance of any type. And the older you get, the more likely it is you will experience issues with your health. After all, as much as we would like to, none of us lives forever.

Older Individuals Are More Likely To Be Obese

As you age, hormones can affect the way you process and digest food. You may also become more sedentary due to prior illnesses or issues. This can mean that older people are more likely to be heavier.

We know that as individuals become bigger, their risk for a major health event goes up. They're at risk for things like cancer, heart attacks and strokes. Obese individuals are also more likely to die at a younger age.

Because many older people are heavier than they were when they were younger, they may find themselves rejected for life insurance outright. Many companies will not offer to cover individuals who have higher BMIs, whether it be health insurance or life insurance.

Insurance companies will see an obese individual and correlate it negatively with their health. According to their line of thinking, there is a higher risk of having to pay the beneficiary.

Is It Impossible to Get Life Insurance for Older People?

While it is more challenging to acquire life insurance for older people, it isn't impossible. It's also not impossible to obtain life insurance if you're obese or suffer from health issues.

If you would like life insurance, it is advisable that you begin the process immediately. This is because you're the youngest you'll ever be in this very moment, which gives you a distinct edge over the future version of yourself.

Interested in learning more about life insurance? Visit this section on our website all about it.

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