Life Insurance for Seniors

Written by Robert Ferry on May 8, 2022
Life Insurance for Seniors

If middle-aged individuals were to pass away, their dependents would have life insurance that they purchased to rely on. In contrast, seniors buy life insurance with concerns different from other age groups. Several reasons motivate seniors to purchase life insurance at that age.

Some seniors need to buy better real estate or houses to accommodate their grandchildren and other family members. While most seniors would want to leave enough finance behind to ensure their children can pay for the funeral proceedings with ease and comfort. Many seniors purchase life insurance mainly to ensure their outstanding debts are repaid, particularly if they are on the end of life care.

The cost of life insurance increases with age, but it is considered a necessity, making it compelling for people to purchase it. Some seniors find it awkward to talk about life insurance as their financial liabilities are fulfilled. The financial liabilities may include a paid home and children who were once dependent on their parents.

Despite people's mixed views about life insurance for seniors, some have some finances to take care of, including an unpaid mortgage or debt. Seniors also worry about the financial stability of their spouses and how they will pay for life's necessities like food and bills. People have financial conditions that are different from other people. One person's financial situation doesn't need to match another individual's.

Life insurance for seniors is not the same from one company to another as it may or may not involve a medical exam. Some life insurance companies do not require a medical exam but only ask some health-related questions. The cost of life insurance is dependent on the life insurance company a person choose and the type of life insurance. Purchasing life insurance can amount anywhere from $20 monthly to thousands of dollars.

This guide looks at the variety of life insurance types best suited to seniors. We will also look at various factors that determine the best life insurance for seniors as per their age group. Additionally, it will shed light on how much a life insurance policy for seniors could cost. We will discuss the best life insurance for seniors and highlight the pros and cons of each one. A FAQs section will be added to answer some general questions about life insurance for seniors.

Let us look into the life insurance policies that seniors can opt for.

What is the Best Type of Life Insurance Policy for Seniors?

Seniors can choose different types of life insurance just like any other prospective policyholder. Each type of policy has its unique features, pros, and cons. Seniors can choose any policy they feel would ideally fit their wants and needs. This section will discuss the various types of life insurance that seniors can select and make the best decision as per their preference.

Term Life Insurance for Seniors

As the name suggests, the term life insurance is for those seniors that want life insurance for a particular time. This means that the term life insurance would have a specific life after which the insurance policy will end. Usually, term life insurance is between five years to 30 years, depending upon the life insurance company a person chooses.

The policy has some additional options that some people opt to go with, such as buying a conversion rider and switching the term life insurance to permanent life insurance. People usually do this to keep the life insurance policy going before it ends. Over the years, people felt that going with term life insurance was the logical choice, but seeing how the policy can help them; they change it to permanent life insurance. The life of any kind of insurance policy can be increased to become permanent.

Moreover, shifting to permanent life insurance would also mean that the features of term life insurance will now move to the ones followed by permanent life insurance.

A policy gets expensive as a person ages. If a senior decides to go with a term life insurance policy at the age of 60 years, with 15 years term length, they need to look at how their budget will be. By the time the policy ends, the individual would be 75 years old, and if they wished to renew the policy, it would cost them more relative to choosing permanent life insurance at 60 years of age.

Pros for term life insurance for seniors include:

  • Term life insurance is cost-effective, which means an average person or a senior would be able to afford it despite their financial liabilities. The cost a person would need to endure for a term life insurance policy is far less than what it would cost them to choose permanent life insurance.

Cons for term life insurance for seniors include:

  • Beneficiaries do not receive benefits from the death of their policyholder by the insurance company if the policyholder dies once the policy has expired. This means a person would need to make sure that the policy is ongoing to keep their family's financial future safe. Moreover, a senior would also need to consider that the policy has enough term length to last long. Relative to permanent life insurance, the seniors have to worry about their term life insurance length.

Permanent Life Insurance for Seniors

Permanent life insurance is for those seniors that would like the policy to last till death or to the point when they choose to surrender it. The two permanent life insurance companies provide universal life and whole life insurance. The first becomes a guaranteed version of the insurance type, and the second is also further branched out to become guaranteed acceptance of whole life insurance.

The only compelling reason people choose permanent life insurance is that it covers seniors for life. This would mean that they need not worry about when the life insurance would end because it will cover them till death. Moreover, the beneficiaries would qualify to receive the death benefit, which would bring peace to the mind of the policyholder. Providing financial support to the family members is why the policyholder would opt for permanent life insurance.

Pros for permanent life insurance for seniors include:

  • The permanent life insurance policy offers a cash value account to all policyholders with multiple uses. For instance, seniors can use their account for cash value and account for their savings and investments. They can also pay policy premiums using the account, making it easy for them to deposit and, in some instances, withdraw.
  • The permanent life insurance would remain active throughout the senior's life and ensure that the beneficiaries receive the death benefit they are entitled to. Having an all-time coverage would mean that the person would not need to worry about the financial assistance after their demise, so this would bring peace to them.

Cons for permanent life insurance for seniors include:

  • Securing a permanent life insurance policy costs more than it would for a term life insurance policy. Hence, a senior would have to double-check their financial budget for the foreseeable future and whether they are in a position to pay off the premium payments.

Guaranteed Universal Life Insurance for Seniors

The guaranteed universal life insurance for seniors falls in permanent life insurance policies. The insurance companies offer these to seniors if they see it fits their preference. In a guaranteed universal life insurance policy, the seniors can access a small cash value account (for some insurance companies) while others do not offer a cash value option.

The other universal life insurance policy segments will allow seniors to change their premiums according to their wants and needs and what they can afford in a typical month. Though, universal life insurance that is guaranteed does not have such an option for its clients. This would mean that the senior who chooses to go with guaranteed universal life would not be able to change their premium value at any time.

Pros for guaranteed universal life insurance for seniors include:

  • Although different life insurance companies have their pricing chart and what they would cost you, guaranteed universal life insurance is less pricey than another type of universal life. Hence, if people can afford to pay the same premium amount through the life insurance policy, they would be more suitable for guaranteed universal life. The reason is that it is cost-effective relative to other options.
  • Since it is a universal life insurance policy, it will last the senior's whole life, making them worry-free from when the insurance policy ends.

Cons for guaranteed universal life insurance for seniors include:

  • The main drawback of choosing guaranteed universal life insurance is that the death benefit and premium amount are fixed, which means a policyholder cannot change it as per their needs. This would also mean that since there is no flexibility in guaranteed universal life insurance, people would need to pay the premium on time and with the agreed amount.
  • Some companies offer a cash-value account, but they do not provide investment components.

Guaranteed Acceptance Whole Life Insurance for Seniors

The guaranteed acceptance of whole life insurance for seniors is a permanent policy that follows the branch of whole life insurance. Under this policy, the coverage amounts cannot be denied to the seniors. The insurance companies offer relatively low coverage and between $10,000 to $25,000. The coverage primarily covers funeral proceedings, burial costs, and headstones.

Pros for guaranteed acceptance of whole life insurance for seniors include:

  • For this type of life insurance policy, seniors do not need to go through a medical exam. This is advantageous for seniors that are not in favour of undergoing a medical exam.
  • Most insurance companies pledge that they would not deny their policyholders for this insurance policy the coverage that they need to cover the necessary expenses for the funeral.

Cons for guaranteed acceptance of whole life insurance for seniors include:

  • The premium amount that a policyholder would need to pay is relatively higher to match the person's coverage.
  • The lowest level of coverage is $10,000, which may be approved for most candidates after looking at their financial condition and the premium they can afford to pay.

Let us discuss the factors determining the best life insurance for seniors in each age group.

Choosing the Best Senior Life Insurance Policy for You

In the previous section, we looked at the different life insurance policies that seniors can choose from, and in this section, we will look at the factors which will determine the best life insurance for their age.

Seniors have different priorities on why they need a life insurance policy at such an age relative to other younger adults. Amongst the several reasons that motivate seniors to purchase a life insurance policy, some of them include paying off debts, moving into the retirement era, and helping their children with finances. At the same time, some also consider the end of life expenses.

It is essential to be aware of the factors that a senior should go through depending on their age group.

Life Insurance for Seniors Over 60

If the seniors are in their 60s, they will soon be retiring from their job, which makes it an ideal time for them to think of their future from a financial perspective. So, they would need to look into life insurance and ensure that they have the funds to accommodate the premiums till the policy ends. Seniors need to think about replacing their monthly income with something complete like life insurance. They would need to consider their spouse's financial responsibility if they were to die due to the uncertainty of life. People at this age choose to think about their children and grandchildren and leave a financial gift for them to secure their future needs.

Life Insurance for Seniors Over 70

Seniors in their 70s are probably going to be retired and would certainly be living on pension (for government officials), while others will not have any source of income. Seniors need to consider replacing their lost income for their spouse and themselves, the leading factor when looking for suitable life insurance.

Seniors would need to evaluate the amount their spouse and children would have after their demise, which will help determine the life insurance they would need. They would also need to cater to their current lifestyle and what type of lifestyle they will follow after the policyholder's death. Seniors need to also think about any financial liabilities that they still owe, like a mortgage, loan, or debt payment. The cost of funeral proceedings would also be taken into account.

Life Insurance for Seniors Over 80

If the senior is 80 years or above, they would have limited life insurance options. The life insurance factors that the person in their 80s would need to consider would be the same as those they would have regarded as in their 70s. They would need to think about replacing their income, looking at financial liabilities, thinking about their spouse and children in terms of financial matters, and leaving a gift for them.

Guaranteed acceptance of life insurance for seniors would be the safest option (as discussed in the article). The death benefit would be low, and the amount for the premium would comparatively be high. But it is still a life insurance policy that they are getting, which should account for something.

Let us look at the cost of purchasing senior life insurance policies.

How Much Does a Life Insurance Policy for Seniors Cost?

This section will look at those factors that account for the cost of a senior life insurance policy. Although several factors contribute to the cost of life insurance for any senior, the main factors include age, health history, gender, and that individual's lifestyle. Typically, younger policyholders have to pay less because they are fit, good health and have an active lifestyle. In contrast, the older policyholders have to pay far more due to apparent factors.

People who have a health condition or smoke will have to pay more than those who are healthy and come in the category of non-smokers. People searching for the best senior life insurance companies should know that term life insurance is cheaper than permanent life insurance. However, as age is a promising factor in determining the premium cost, seniors would have to pay more no matter the type of policy.

The cost of life insurance is different for each person because of the determining factors that are highly unlikely to be the same. Also, different insurance companies offer other rates, which have to be considered when determining the cost of senior life insurance. The ideal route that a senior should take is to ask for senior life insurance quotes from multiple companies. Then, compare them by looking at cost, features, insurance type, coverage amount, and length of the insurance.

Hence, if a senior is seeking life insurance, purchasing it as soon as possible would be beneficial as they would need to pay fewer premiums relative to older. Also, doing it sooner will get you premiums within your budget and which you can afford to pay.

Let us look at the best life insurance companies for senior citizens.

Best Life Insurance Companies for Seniors 

This section will look at the best life insurance companies that seniors can apply for and discuss their pros and cons. The benefits and drawbacks will enable the seniors to compare their choices and make decisions as per their preferences.

Choosing the best life insurance company that fits an individual's need is needed to provide financial help, particularly for those at the age required to save for their future. Seniors can be of several types: some will have a lot of finances to afford a life insurance policy, while others may have financial liabilities even after retirement, like mortgage or loan payments.

Let us dive into the best insurance companies for seniors to select.

Northwestern Mutual

Insurance policies from Northwestern Mutual are offered in universal, whole, and term forms. These products, however, are not all available in all separate states. The riders can have most of the policies customized.

The application requires that you complete a medical examination. The issuance of policies by Northwestern Mutual can be to applicants of ages 85 or under (term life insurance specifies 70 years). The starting price for insurance coverage options is $50,000. Individuals can make their term life policies permanent without undergoing another medical exam or paying additional fees.

While it is possible that a person can earn dividends on whole life policies by Northwestern, it is not guaranteed.

You may be able to find estimates for some types of policies on the company's website. But, you can only have your level of coverage determined by working with a Northwestern Mutual financial advisor. You should be able to contact customer service online and set up your premium payments as automatic once you have acquired your insurance.

Pros include the following:

  • Offer of universal policies, whole, and term
  • Individuals can earn dividends on whole life policies

Cons include the following:

  • The website does not ask for a lot upfront 
  • The application process requires that you work with a Northwestern financial advisor to get started

Mutual of Omaha

Mutual of Omaha is tied at No. 2 with 4.0 out of a possibility of five scores in our ratings of Seniors Best Life Insurance.

Of the range of insurance options available at the company, some include universal, whole, and term policies. One such option is a whole life policy that is a guaranteed issue. This covers individuals for amounts up to about $25,000 between the ages of 45 and 85, whereas, in New York, the ages are 50 and 85.

Since only a few Mutual of Omaha life insurance products provide online estimates, individuals have the option to pay for their premiums online as well. However, all policies must be purchased within the presence of an agent.

Pros include the following:

  • The term, whole, and universal policies are offered
  • Availability of guaranteed issue policies

Cons include the following:

  • The purchase must be made through an agent
  • Online resources are fewer than other insurers

Transamerica

Transamerica has branched out to offer many different services ever since it was first founded as a bank in 1904. Benefits include life insurance policies, annuities, and others related to finance.

This company's life insurance options consist of term, whole, and universal. An option at the whole life level is considered the final expense policy. All expenses related to the deceased's end-of-life processes can be covered, such as their burial. For applicants up to 80, the term life option at Transamerica's Trendsetter Super Series is ready for use. For customers of ages 85 and under, there is the option of its index universal life.

Looking for a local agent who uses the Transamerica life insurance website is probably your best bet as you can't apply for their insurance online. Transamerica life insurance provides deliverance of documents, online estimates, automatic payments, and customer service.

Pros include the following:

  • Offer of universal policies, whole, and term
  • Applicants of ages up to 80 or 85 can have specific policies issued to them

Cons include the following:

  • Individuals must work with agents as online applications are not available for use
  • All states may not carry the same products

AIG

With a 3.9 out of 5, AIG receives the rank of No. 4 in our overall ratings of the Seniors Best Life Insurance.

AIG offers three kinds of guaranteed issues: whole life, universal life, and term life insurance policies. Seniors have a better chance of being interested in the latter policy due to the acceptance being guaranteed between 50 and 80 with no health questionnaire or medical exam requirements. $5,000 to $25,000 of availability in coverage amounts, the guaranteed issue policy has been designed to assist with any final expenses, including funeral costs or debts.

The company permits you to manage your policy online, including paying bills, receiving information updates, and e-messaging representatives from customer service.

Pros include the following:

  • A guaranteed issue policy up to age 80 is offered

Cons include the following:

  • At age 95, the policy expires

New York Life

New York Life is tied in our Best Life Insurance for Seniors at No. 5, scoring a 3.8 from 5. It offers policies of universal, whole, and term.

There's a possibility of converting the three policies to a permanent life insurance policy. Nevertheless, what kind of permanent policy options the three policies may be converted to are not specified on the company's website.

Dividends can be earned on its whole life policies, but this is not guaranteed even though the company claims to have continuously been paying dividends since 1854.

Pros include the following:

  • Offer of universal policies, whole, and term
  • Individuals can earn dividends on whole life policies

Cons include the following:

  • No guarantee issue policies

Banner Life

Legal & General America is Banner Life's parent company, which also owns William Penn Life Insurance Company. Universal policies and Term policies are two that are offered at Banner Life.

The accelerated death benefit rider is added to the term life policies of Banner life. This gives you early access to your death benefit if you have received a qualified terminal illness diagnosis. This can be useful however you want. Qualified applicants aged up to 85 may be issued Banner's universal life policy.

Pros include the following:

  • Term and universal life policies are offered
  • Includes accelerated death benefit rider in term life policies

Cons

  • Whole life policies are not offered

Guardian Life

Guardian life is considered the best life insurance company for couples. It is reviewed as the best for couples by many of its customers. These are people who have bought life insurance policies from Guardian Life. The Guardian offers four varieties of life insurance policies. These include universal, variable universal, whole life, and term. Their "Guardian Estate Guard" whole life policy was unique for us. This policy is especially beneficial for insuring couples with one policy, usually married. This is so that if one of the spouses dies, the other can use their death benefits.

Finally, options of term and whole life insurance are offered to customers with HIV by Guardian. Qualification requires that you adhere to the different requisites. The requisites include being of an age between 20-60, being free of any illnesses that define AIDS, and being under the care of an HIV specialist, particularly a doctor.

Pros include the following:

  • A wide range of policy options are available to choose from
  • Policyholders with HIV have access to life insurance
  • The age limit for whole life is relatively high (up to the age of 121 years)

Cons include the following:

  • There is a limit to term life options
  • Term life insurance is the only kind of policy to have the availability of online quotes

MassMutual

Mass Mutual is considered the best life insurance company for people looking to buy a life insurance policy. The company is highly recommended for those seniors that wish to purchase whole life insurance. The customers have given great reviews about the company, particularly concerning their whole life insurance

Vantage Term policies for 10-, 15-, 20-, 25-, and 30-year terms are offered at MassMutual with death benefits between $100k and $10 million.

Mass Mutual stood out to us because of their direct term option, which can be purchased within 64 and convertible beyond the issuing age. Their whole life policies have more significant limitations than competing senior plans, with death benefits exceeding $25,000. Within 90 days, applicants must complete a medical exam. Guaranteed issue policies and living benefits are not available from MassMutual.

On the other hand, their life plans provide guaranteed cash value, death benefit options, and dividend participation, so you may rest easy knowing that your loved ones will enjoy all the plan's benefits.

Pros include the following:

  • Eligibility of whole life insurance for dividends
  • Availability of convertible term insurance policies
  • Guarantees of insurability, waiver of the premium rider as well as accelerated benefit riders

Cons include the following:

  • Senior citizens can get higher premiums
  • The online application process for people under age 65 is not available

Transamerica

The best aspects of Transamerica are its final expense coverage option and the fact that it has a great choice of riders. There are various optional riders individuals can pick from with this insurer, seven in total. These include a waiver of premium rider in which if an individual becomes disabled, their premium is waived after six months. There are also options of picking an accidental death benefit rider and the monthly disability income rider.

Additionally, there's also the option of a children's/grandchildren's benefit rider wherein if the parent or grandparent is between 18-25 and the child/grandchild is of an age between 15 days and 18 years, then this will add to their level term insurance.

Transamerica offers three options in terms of their final expense insurance. These include the 10-pay option, an immediate solution, and the option of an easy solution. The choice of quick solution offers insurance to customers that range in ages from 0 to 85, and they also cover payments made in full up till the age of 121, making it the most thorough of all three. On the other hand, the easy solution is only available to customers between 18-80, or if you live in New York, then it's 50-70, making it the least inclusive of all three.

Pros include the following:

  • Medical exams are not required for applicants of ages between 1-80 in terms of final expense policies
  • Level monthly premiums are guaranteed

Cons include the following:

  • All policies do not have the availability of getting quotes online

Haven Life

Haven Life provides solutions such as the long-term care rider to newly retired seniors making plans for their futures.

The life insurance products by Haven Life are supported by MassMutual, which received a J.D. Power customer satisfaction rating marginally over the industry average. Haven Life provides comprehensive coverage at a moderate price, making it an attractive alternative for seniors who have recently retired and are considering their plans.

Haven Life's only drawback is that they only provide term life insurance. Term plans with death benefits ranging from $100,000 to $3 million are available for applicants under 65. Likewise, Haven Life's parent business, MassMutual, has a strong financial position, earning an A++ rating from AM Best.

Pros include the following:

  • J.D. Power score of higher-than-average
  • Have a high AM Best score

Cons include the following:

  • Only term life insurance policies are available
  • No availability in all states

Frequently Asked Questions

What Is the Most Affordable Seniors Life Insurance?

Though term life insurance is generally more cost-effective than whole life insurance, affordability in terms of life insurance for seniors differs. For instance, it is most likely that life insurance for a 75-year-old man with heart disease will be higher than life insurance for a relatively healthier person like a 65-year-old woman without a history of heart disease. You should be mindful that rates usually don't differ much from one company to the other, but it is still recommended that you get different quotes to see you much you would generally be paying.

What Is the Best Life Insurance Company for Seniors?

A life insurance company best suited to seniors is its cost and coverage requirements. Furthermore, some firms are regarded for providing excellent customer service, while others are known for providing a wide range of insurance alternatives or riders. To locate the best company for your needs, think about which criteria are most essential to you and what sort of policy you require, which will help you narrow down your options.

Do Seniors Need to Have Life Insurance?

Although life insurance is not a requirement, it might be a wise long-term investment. Life insurance provides financial security to seniors and their families by ensuring that they have enough money to pay off medical debt, cover burial costs, and leave money to spouses and other family members.

Conclusion

This article covered all the necessary information that a senior would need to apply for life insurance. The article included the different life insurance policies that any old citizen can apply to secure their loved ones' future financially.

The term life insurance is for a specific time, and when the length of the policy ends, the policy comes to closure too. At the same time, permanent life insurance has a never-ending coverage length, so people can be assured that they don't need to worry about renewing their policy. Permanent life insurance is divided into whole life and universal life, further segregated into different branches.

Moreover, the article discusses the different factors a senior should be aware of when choosing a life insurance policy depending upon the age bracket they fall in. Each age group has certain elements that an individual should consider before choosing a life insurance policy. For instance, if a person is in their 60s, they are still working and will retire soon. So they should plan and see the type of life insurance policy that would suit their needs in the future. They need to ask for quotes from different insurance companies and compare them depending on the policy type and the cost to purchase.

Moreover, the seniors would need to evaluate their financial condition and how much can they afford to depend on the insurance premium. Other factors to look into are if the person has any financial liabilities like debts and mortgage payments that need to be paid. Also, if they look to leave some financial gift for their children, it should be catered to.

The article also discusses some of the best life insurance for seniors, which will help understand which one to choose by looking at their features and their benefits and drawbacks. Each life insurance company is best in a particular category reviewed by the customers who have a life insurance policy. If you wish to apply for life insurance, it is ideal to look for the best insurance companies in specific categories.

Article written by Robert Ferry

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