May 23, 2019

Best Life Insurance for Seniors

Read more about Life Insurance

Even as a senior, you may still need life insurance coverage. Learn how to find the best policy, price, and company in our guide.

Why Seniors Need Life Insurance

Most seniors do not have the financial obligations younger people do, like raising children or paying off outstanding debts. But they may still benefit from life insurance for several reasons, including:

  • Unpaid Debts
    Perhaps you're still paying off your mortgage, or you co-signed a loan that's still outstanding. Your loved ones will be responsible for paying these debts when you're gone. A life insurance policy can lighten that burden.

  • End-of-Life Expenses
    Medical bills and funeral costs add up. The average funeral costs around $10,000—that's a significant financial burden on family members.

  • Inheritance
    Some people choose to spend their retirement funds instead of saving it. If that's the case for you, you may want a life insurance policy to offer your loved ones something when you're gone.

  • Disabled Child or Spouse
    You can provide financial security to a disabled child or spouse (or their caregiver).

  • Peace of Mind
    Even if you spent years saving for retirement, an emergency or unforeseen circumstances can ruin your plans. A life insurance policy can ensure your financial obligations are taken care of.

Best Life Insurance Policies for Seniors

While life insurance can be worthwhile regardless of age, seniors can be at a disadvantage.

First, life insurance gets more expensive as you age. You won't find the same competitive prices at 80 (or even 60) as you did in your 30s.

Second, you can be denied coverage for certain health conditions (like diabetes or cancer). This is more common for policies that require a medical exam or if you're requesting a large death benefit.

But don't assume you'll be rejected for coverage. Talk to a life insurance agent to find the right:

  • Death benefit
  • Number of coverage years
  • Type of policy

Request quotes from different companies to find the best rate. Read about the insurer's policy coverage and find a match for your needs.

Best life insurance for Seniors Over 60

Simplified Issue
With this coverage, you do not take a medical exam. However, underwriters will ask thorough questions designed to learn more about your health and any medical conditions.

The company may also decide it needs more information and request medical records from your doctor. If records are requested, it may take longer to be approved—generally 4-6 weeks. The underwriter will analyze the risk and determine the coverage amount they will offer.

Otherwise, you are typically approved for coverage and the policy goes into effect.

ProsCons
  • No medical exam
  • Cheaper than permanent coverage
  • Death benefits up to $300,000
  • Generally quick underwriting
  • More expensive than term coverage
  • Not all companies offer these policies
  • Some companies have age limits (generally age 65)

Best Life Insurance for Seniors Over 70

Final Expense Insurance
This is a form of permanent life insurance, meaning you have the insurance coverage for as long as you pay monthly premiums. It's commonly used to cover funeral and other end-of-life expenses like:

  • Medical bills.
  • Services like viewings, cremation, and burial.
  • Funeral costs like caskets, urns, and more.

There's no medical exam required—most applicants are approved for final expense insurance after just a few basic questions.

The death benefits are generally low—on average around $25,000—but the premiums are fixed and underwriting is quick.

ProsCons
  • No medical exam
  • Affordable
  • Good for final expenses like a funeral and medical bills
  • Quick underwriting
  • Low death benefits (max $100,000)
  • More expensive than term life insurance

Learn more about final expense life insurance here.

There may be reasons you want to skip a medical exam when applying for life insurance. While a no-exam policy may be faster and easier to obtain, it won't always offer the coverage your family may need.

Research and review ALL policy options before deciding on coverage.

Best Life Insurance for Seniors Over 80

Guaranteed Issue
This insurance was created for people who wouldn't normally qualify for other life insurance policies. It is, as the name suggests, a guaranteed coverage that doesn't require a medical exam.

Monthly premiums are significantly more expensive ($88 - $616, depending on your sex and coverage amount). Death benefits are also generally lower, around $10,000 - $20,000. As such, these policies are often considered a "last resort" coverage.

ProsCons
  • Guaranteed coverage
  • No medical exam
  • Fixed premiums
  • Cash value
  • High premiums
  • Low death benefit

Learn more about guaranteed issue life insurance here.

Another Options

Term life insurance is a great coverage option no matter your age, but especially for seniors. The policies last for a certain amount of time (or term). Usually, that ranges from 1 to 30 years, in increments of five.

Term life is typically the most affordable and provides the most flexibility with coverage length and death benefit options. The premiums are fixed, but it's wise to apply early—the older you are, the more you'll pay.

ProsCons
  • Affordable
  • Fixed premiums regardless of health changes
  • Flexibility with coverage length and death benefits
  • Some seniors may not qualify due to age or health
  • Requires a medical exam

Learn more about term life insurance here.

If you have a medical condition, take steps to keep it under control. Meet with your doctor regularly, take medications as prescribed, eat a healthy diet, and exercise regularly (if you are able). Taking steps to a healthier lifestyle can positively impact your rates.

Whole life insurance provides lifelong coverage and includes an investment and cash value component. It's typically a longer-term investment, as you may not see a cash value return for up to 10 years or more.

The three main benefits to a whole life insurance policy are:

  1. Guaranteed Cash Value Growth
    Part of your monthly premium goes toward paying off your death benefit, and the other part goes into a cash value account that builds value over time.

    You can normally access the cash value any time through withdrawals or loans. These can be used for retirement, emergency funds, or other bills. Withdrawals often come with a fee or other contingencies, so you'll want to be sure you're familiar with your policy.

  2. Guaranteed Death Benefit
    The death benefit is a stated amount of proceeds paid to your beneficiary upon your death.

  3. Guaranteed Level Premiums for Life
    Whole life insurance premiums are higher because the policy lasts forever and has cash value. However, the premium will not increase or decrease throughout your life, so it's easy to budget for.

With permanent coverage, it could take years before seeing a return on investment or cash value growth. Since seniors may not see these benefits, term life is usually a better option.

Universal Life Insurance
Universal Life Insurance provides a permanent death benefit with added cash value. When you pay your premiums, part of the dollars go into a cash account that is credited each month with interest. The rest goes toward paying the death benefit.

Your premiums are not fixed, so the amount you pay each month can change month-to-month. But you have more control and access to the dollars that go into the cash account.

Variable Life
Similar to Universal Life, part of your premium is contributed to a cash account. But with Variable, the cash value can be invested in a variety of accounts, similar to mutual funds.

The choice of which accounts to invest in is up to you. Examples of investment funds are stocks, bonds, equity funds, and money market funds.

Best Life Insurance Companies for Seniors

Here's our list of the top 10 insurers for seniors based on their product offerings, average premiums, and financial ratings.

Average monthly premiums are based on quotes for a 65-year-old male, non-smoker, in generally good health, quoting for a 10-year term policy with a $150,000 death benefit.

CompanyFinancial Rating*Best Coverage TypeAverage Monthly Premium
Banner LifeA+Term Universal, Final Expense$91
Lincoln FinancialA+TermN/A
TransamericaA+Term, Whole, Final Expense$124
Mutual of OmahaA+Term, Whole, Guaranteed Universal$268
AssurityA+Term, Whole, Universal, Final Expense$121
FidelityA-Term, Whole, Guaranteed Issue, Final Expense$239
Foresters FinancialAWhole, Final Expense$70
PrudentialA+Term$102
AIGATerm, Guaranteed Issue, Whole$100
American NationalATerm$140

*Based on A.M. Best Ratings

Average Life Insurance Rates for Ages 50+

Keep reading for the average monthly cost of various life insurance policy options. Each is sorted by male or female, and is based on a generally healthy non-smoker.

10-Year Term Rates—Male

Age$100,000$250,000$500,000$1,000,000
50$17.87$26.72$44.83$77.17
60$36.14$65.82$117.32$221.04
70$91.88$192.03$336.4$637.06
80$395$772.83$1,055.5$2,903.8

10-Year Term Rates—Female

Age$100,000$250,000$500,000$1,000,000
50$15.87$21.87$37.08$66.73
60$27.47$46.94$81.13$148.12
70$84.14$148.78$301.51$589.79
80$294.56$545.17$1,055.5$2,061.75

15-Year Term Rates—Male

Age$100,000$250,000$500,000$1,000,000
50$21.07$35.31$63.62$110.27
60$47.63$101.29$186.29$299.02
70$63.26$252.67$495.75$965.92

15-Year Term Rates—Female

Age$100,000$250,000$500,000$1,000,000
50$17.33$27.35$49.08$81.39
60$32.31$62.28$121.24$210.84
70$57.36$148.5$295.67$538.58

20-Year Term Rates—Male

Age$100,000$250,000$500,000$1,000,000
50$24.63$47.68$92.06$145.55
60$64.34$132.7$266.85$419.38

20-Year Term Rates—Female

Age$100,000$250,000$500,000$1,000,000
50$20.16$34.46$63.87$109.36
60$42.26$89.37$165.03$298.02

No Exam Term Rates—Male (based on a 10-year term)

Age$50,000$100,000$250,000
50$29.83$24$27.67$
60$27.67$33.34$68.32$

No Exam Term Rates—Female (based on a 10-year term)

Age$50,000$100,000$250,000
50$23.68$21.08$22.87$
60$26.33$27.41$48.22$

Whole Life Insurance—Male

Age$100,000$250,000$500,000$1,000,000
50$177.6$357.42$678.9$1,369
60$285.06$617.25$911.25$2,188.33
70$488.6$1,150.41$2,176.75$4,848.67
80$897.17$2,211.09$4,650.83$6,797.5

Whole Life Insurance—Female

Age$100,000$250,000$500,000$1,000,000
50$157.67$335.17$685.5$1,300.5
60$241.92$540.58$986.08$2,121.73
70$414.75$1,010.33$1,956.25$3,908.15
80$736.05$1,783.5$3,536.67$7,339.01

Universal Life Rates—Male

Age$100,000$250,000$500,000$1,000,000
50$102.22$197.44$298.48$563.97
60$169.95$332.9$547.5$824.66
70$241.6$563.59$1002.16$1918.41

Universal Life Rates—Female

Age$100,000$250,000$500,000$1,000,000
50$84.61$169.22$312.54$543.38
60$141.11$272.22$491.01$781.35
70$188.15$434$697$1415

Tips for Purchasing Life Insurance as a Senior

It's easy to get overwhelmed when shopping for life insurance. Here are a few tips to help:

Research Financial Ratings
Financial ratings show the strength of an insurance company. This gives an idea into how likely the company is to thrive and pay out your death benefit when the time comes.

There are five independent agencies that have ratings: A.M. Best, Fitch, Kroll Bond, Moody's, and Standard & Poors.

Companies are re-rated each year. You can usually find the ratings in the "About" section on their website.

Know the Terms
It's important you understand the terms of the policy you're purchasing. For example, know how your premiums may change over time, how your cash value will increase with a permanent policy, and how to renew a term policy.

Pay special attention to the death benefit payout process. Is there a two-year hold period, where if you die before two years after purchasing the policy the death benefit isn't paid out? This is often the case with term policies.

Risk Factors Matter
If you smoke, are overweight, have a medical condition, or engage in a risky lifestyle, your monthly premium will be higher or you could be denied coverage.

If you have a condition you can manage, like diabetes, you'll be rated more favorably if you take steps to manage it, like taking medications as prescribed, eating a healthy diet, and exercising.

If you smoke, try to quit immediately. If you aren't an active tobacco user when you purchase a policy, you may qualify for a lower premium.

Don't Wait to Apply
The older and unhealthier you are, the more risk a company takes on by insuring you. This means you are less likely to qualify for coverage, and your monthly premiums will be higher.

That being said, seniors ages 60, 70, or even 80 can still qualify for coverage. But it's better to purchase ASAP rather than waiting.

Live a Healthy Lifestyle
It's never too late to make healthy choices. Even if you don't take a medical exam for your life insurance coverage, you'll likely have to answer medical questions on your application, like:

  • Height and weight (to calculate BMI)
  • Cholesterol levels
  • Blood pressure
  • Glucose level

By eating a healthy diet and exercising as you are able, you can qualify for a better risk score. If you are prescribed medications, take them, and visit your doctor regularly.

Opt for Term Coverage
At any age, permanent coverage can be up to 10 times more expensive than term coverage. If possible, choose a term life insurance policy for the best coverage and rate.

Guaranteed issue or final expense insurance are also options, even though they are permanent policies. But whole, universal, and variable should generally be avoided due to their high cost. Most of the time, you won't see the return of investment, which means the increased premium isn't worth it.

How Does Long-term Care Insurance Fit In?

Long-term care insurance and life insurance are not the same product, but they are related. Some seniors don't have the health insurance coverage necessary for long-term care services like nursing homes or at-home care.

A life insurance policy may come with a rider that allows the policyholder access to the death benefit while still living (in the case of a terminal illness or other condition). However, that rider doesn't provide care services.

Long-term care insurance can be purchased separately, or as a rider on a life insurance policy. These riders are triggered when a chronic condition leaves someone unable to care for themselves.

Seniors should consider a long-term care rider on their policy in case the unexpected happens and they need those services. Understanding what your health insurance does and doesn't cover can help you make the decision.

Bottom Line

Just because you're older doesn't mean you don't need life insurance. The right coverage can give you additional financial security, help you leave an inheritance for loved ones, or provide for end-of-life expenses.

Your age also doesn't mean you can't qualify for good, affordable coverage. There are many insurers that offer products to seniors.

Talk to a life insurance agent to learn about your options; they can help quote and find affordable coverage that's right for you.

More from CreditDonkey:


Life Insurance for Seniors Over 70


No Questions Asked Life Insurance


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