Pro Tip: To learn more about the best providers for seniors, check out our guide to the best life insurance for seniors.
A Guide to Life Insurance for Seniors
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January 18, 2022
In the case of a death, life insurance policies are essential in protecting your loved ones and helping to pay for final expenses. With these policies, individuals pay monthly premiums in order to receive a “death benefit” or a lump sum of cash for beneficiaries and loved ones after their passing.
Life insurance provides peace of mind and can help your loved ones with everything from hospice care to funeral expenses. This is why purchasing a life insurance policy is always a responsible decision, especially for covering outstanding debt, estate taxes, and even providing an inheritance to loved ones.
While life insurance policies do become more expensive as you age, there are comprehensive and affordable plans available for older adults. This guide will cover the different types of life insurance policies, the costs of coverage, and how to choose a policy that fits your needs and budget.
Pro Tip: To learn more about the best providers for seniors, check out our guide to the best life insurance for seniors.
Term life insurance provides a death benefit to beneficiaries if the covered person dies during the term of the policy (usually 10 to 20 years). If the policy expires while the holder is still alive, they may renew it for another term, convert the policy to permanent coverage, or allow it to expire. Term life policies are low in cost for individuals in their 50s and 60s but become more expensive and difficult to find coverage for those who are over 75.
Tip: Life insurance companies offer free medical exams to potential customers.
Whole life insurance differs from term life insurance because it is permanent coverage with no expiration. This coverage provides a death benefit as long as the policyholder pays their insurance premiums. This policy also includes a savings component that sets aside a portion of premiums into a separate account that you may withdraw from or borrow against.
Whole life policies are also called “traditional” life insurance and are typically more expensive than term life insurance products. Usually, these policies make sense for younger individuals, as monthly premiums can be steep for older adults.
Guaranteed issue life insurance is a policy that requires no medical exam or requirements to receive coverage. These are sometimes called “no medical exam” life insurance and are perfect for those with health issues that make it difficult to qualify for other life insurance coverage.
Whole life and term life policies usually require medical exams to determine life expectancy, premiums, and coverage. While guaranteed issue plans do not require medical information from the policyholder, there is often a waiting period of two years before the full benefits are available and premiums may be higher than other policies.
The death benefit for these policies tends to be lower than other policies, anywhere from $2,000 to $50,000. If an individual dies within the waiting period, beneficiaries do not receive a full death benefit. However, they may receive a partial benefit or reimbursement of premiums paid for the policy.
Guaranteed universal life insurance policies are an inexpensive option with lower monthly premiums that pay out lower death benefits to beneficiaries. This policy is usually called “term for life” because while the policies are similar to term life insurance in that they do expire, they expire at a specific age (usually between 85 and 130) as opposed to a set number of coverage years.
This insurance policy is not similar to the guaranteed issue policy, as guaranteed universal life policies typically require medical exams. The “guaranteed” part of this policy is that the death benefit will be paid out as long as individuals pay premiums.
Funeral insurance, also known as burial insurance, is often available directly from funeral homes as well as life insurance providers. The premiums from these policies go toward a benefit that covers the cost of funeral services, including the wake and burial fees. Individuals may make monthly premium payments until a certain age or until the services are paid for. This eases the burden of loved ones to pay for costly funeral services.
The cost of life insurance varies depending on your age, gender, location, health conditions, and the company you purchase life insurance from. We calculated these quotes for both men and women of various ages with no underlying health conditions. Most policies require a medical examination prior to purchase, and the results of that examination will determine your premium.
| Policy Type | 65-year-old man | 65-year-old woman | 75-year-old man | 75 year-old woman |
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| 10-Year Term Life (quotes from Quotacy) |
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| Whole Life (quotes from USAA) |
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| Guaranteed Universal Life (quotes from Compulife) |
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| Guaranteed Issue Life Insurance (quotes from TruStage) |
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Before you choose a life insurance policy, you should sit down and determine your financial goals. Is the purpose of your life insurance policy to leave an inheritance to your family? Is it to settle outstanding debts that would pass on to a spouse or children?
Some life insurance policies allow policyholders to withdraw or take a loan against cash savings while the individual is still alive. This can alleviate debt or financial burden during the policyholder’s life.
Tip: Before you purchase any policy, read the terms very carefully as some plans don’t pay out benefits in certain circumstances and not all monthly premium rates are guaranteed for the full term of the policy.
Life insurance riders are optional and provide additional coverage and benefits to your policy. They can be helpful in ensuring your policy fits your needs. Some riders help users purchase more coverage in the future without a medical exam while others can help pay future life insurance premiums if the policyholder becomes ill and cannot work.
Other riders allow individuals to access their death benefit before they die in order to pay for long-term care in a nursing home or for medical bills for hospice care. An accidental death rider increases the death benefit if you die in a covered accident. There are many different riders that may complement your plan and provide more security. Your health and financial needs will determine if you need a rider and which one to choose.
Did You Know: Did you know that some insurance providers will either pay for or discount a medical alert device? To learn more, read our guide to the best medical alert systems.
Always do your research before making a big purchase. Speak with a financial advisor, insurance broker, or friend and explore your options. If you’re still working, it’s possible you can receive life insurance through your employer. Regardless of your situation, you should decide the following before moving forward with any policy:
It may be useful to factor in life insurance policies and premiums into your retirement plan. Once you determine these factors along with your financial goals, you can determine which policy is right for you. Life insurance can provide you with great peace of mind that your loved ones and finances will be taken care of after you pass on. The feeling of safety and security can lead to greater well-being in your golden years.
Additionally, be sure to check out our helpful guides to all types of insurance for seniors:
Whole life insurance becomes expensive after 70, so a term life plan for 10 or 15 years is a more cost-effective option. Healthy men over 70 can pay anywhere between $150 and $600 per month for a 10-year term life insurance policy with a $200,000 death benefit; healthy women pay a little less between $75 and $400 for the same policy.
Whole life insurance becomes more expensive the older you get. For example, someone around 50 may pay around $150 per month for a whole life insurance policy; a 65-year-old may pay around $400 for a policy, and someone over 75 can pay upwards of $700 per month for a policy. The older you get, it may be more cost-effective to choose a term life insurance plan to lower monthly premiums.
A 65-year-old can get a term life insurance policy for 10 or 15-year terms. It may be more difficult to get a 30-year term life insurance policy at that age. Health factors may also determine whether or not you are offered coverage and what term you can purchase.
Not many companies will offer life insurance to individuals over 85. Some set their maximum age to 80. That does not mean you can not purchase any life insurance if you are over 80; rather, you may need to purchase a different policy such as a guaranteed issue plan.
A 65 life policy allows individuals to pay premiums until they reach the age of 65. At that point, coverage remains in place but they no longer have to pay monthly premiums. Typically, these plans can only be purchased by individuals under the age of 50.
