Senior Life Insurance: Is It Worth The Cost?

Senior life insurance is a valuable option for older adults who want to ensure their loved ones are financially protected after they pass away. While life insurance rates tend to increase with age, several companies offer coverage for seniors, including Guardian, MassMutual, State Farm, Northwestern Mutual, Mutual of Omaha, and more. The best option for each individual will depend on their age, health, budget, and specific needs.

How much does senior life insurance cost?

The cost of senior life insurance depends on several factors, including age, health, the type of coverage, and whether the insured is a smoker. Premiums are typically higher for seniors than for younger adults.

Senior life insurance is a type of whole life insurance that covers the cost of a funeral and other final expenses. It usually provides smaller insurance protection, ranging from $10,000 to $25,000 in coverage.

• Protective: Classic Choice - $2,365
• Pacific Life: PL Promise - $2,365
• Penn Mutual: Non-convertible term - $2,393
• Lincoln Financial: LifeElements - $2,393
• Corebridge Financial (formerly AIG): Select-a-Term - $2,446

For the same coverage, a 70-year-old male non-smoker would pay:

• Corebridge (American General): $3,757
• Protective: Classic Choice - $3,757
• Pacific Life: PL Promise - $3,758
• Penn Mutual: Non-convertible term - $3,802
• Lincoln Financial: LifeElements - $3,802

It's important to note that these are just examples, and the cost of senior life insurance can vary depending on individual circumstances and the insurance provider. Additionally, some companies may offer lower rates for older adults or those in poor health. When considering senior life insurance, it's essential to compare quotes from multiple providers to find the best rate and coverage for your needs.

What types of life insurance are available to seniors?

Seniors can choose from the same types of life insurance as anyone else. Here are some of the options available:

Term Life Insurance

Term life insurance offers temporary coverage and a guaranteed payout if the policyholder dies during the term. Term life insurance is often available through age 80, but the length of the level term period shortens as you get older. For example, at age 80, your longest option will likely be 10-year term life insurance. You may also be limited on coverage amounts at an older age and be required to get a life insurance medical exam.

Cash Value Life Insurance

Cash value policies such as whole life and universal life insurance can be obtained with some companies through age 85, but some insurers have lower maximum ages. Monthly costs for cash value life insurance and required medical exams can become a hurdle at older ages.

No-Exam Life Insurance

No-exam life insurance for seniors is generally available in two forms: guaranteed issue or burial insurance. A guaranteed issue life insurance policy has no medical exam or questions. These are an option for someone who is older and/or in poor health. Burial insurance, or final expense insurance, is a small whole life insurance policy intended to cover funeral costs. It may be a guaranteed issue policy.

What are the pros and cons of senior life insurance?

Senior life insurance can be a valuable tool for older people, offering peace of mind that their family will be financially protected when they pass away. However, there are pros and cons to consider before taking out a policy.

Pros

• Funeral and final expenses covered: Life insurance can help cover funeral costs and other end-of-life expenses, such as medical and legal bills, so that loved ones don't have to pay out of pocket.
• Debts paid off: Life insurance can be used to pay off any remaining debts, such as a mortgage or student loans, so that they aren't passed on to family members.
• Financial legacy left for family: Life insurance can be used to leave money to family members, such as a spouse or children, or even grandchildren.
• Additional income stream in retirement: Permanent life insurance can provide an additional income stream in retirement.

Cons

• Approval may be harder to get: Seniors may find it more difficult to get approved for life insurance, especially if they have pre-existing health conditions.
• Premiums are more expensive: Life insurance premiums increase with age, so seniors will typically pay more for cover than younger adults.
• Coverage options are more limited: The older you are, the fewer coverage options are generally available to you. For example, the longest term life insurance option for those over 60 is usually 20 years.

How do I get a quote for senior life insurance?

Getting a quote for senior life insurance is a little more complicated than getting a standard life insurance quote. Senior life insurance is designed for those who are older and may not be in the best health, so premiums are likely to be higher.

You can obtain a senior life insurance quote by contacting an insurance company directly or by using an online insurance broker. Many insurance companies will allow you to get a quote through their website. You can also use a broker like Lifequotes.com or SmartAsset.com to compare quotes from multiple companies at once.

To get a quote, you will need to provide some personal information, such as your address, date of birth, gender, height, and weight. You will also need to answer questions about your personal habits and medical history, including whether you smoke. Be prepared to provide details about any medications you take and any pre-existing health conditions you have.

Keep in mind that the cost of senior life insurance can vary depending on several factors, including your age, health, and the amount of coverage you need. The type of policy you choose will also affect the cost. Some policies may require a medical exam, while others will only require you to complete a medical questionnaire. If you are in good health, selecting a policy with paramedical underwriting may help you save money on your premiums.

When choosing a senior life insurance company, it is important to consider their credit rating, how long they have been in business, and consumer reviews. You should also make sure that the company offers the type of coverage you need and that the policy includes any desired options, such as a waiver-of-premium option or a guaranteed-level premium.

How do I choose the best senior life insurance?

When it comes to choosing the best senior life insurance, there are several factors to consider. Here are some guidelines to help you make an informed decision:

• Understand your needs: Determine the purpose of the life insurance and the coverage required. Consider your financial obligations, such as funeral costs, medical bills, debts, and the needs of your dependents.
• Compare different types of policies: Research the pros and cons of term life insurance, whole life insurance, universal life insurance, and final expense insurance. Consider the cost, flexibility, and suitability of each type of policy for your specific situation.
• Evaluate insurance companies: Look for reputable companies with strong financial ratings, such as those with excellent or superior ratings from AM Best. Compare their pricing, investment performance, reliability of policy illustrations, and access to cash value.
• Assess your health and age: Your age and health will significantly impact the cost and availability of life insurance. Be aware that premiums increase with age, and certain health conditions may limit your options or result in higher premiums.
• Seek expert advice: Consult a financial advisor or an independent insurance agent to help you navigate the complexities of different policies and find the best match for your needs. They can provide valuable insights and ensure you understand the risks and benefits of each option.
• Read reviews and customer feedback: Consider the experiences of other customers by reading reviews and testimonials. Look for companies with a track record of reliable service, prompt claims handling, and responsive customer support.
• Avoid rushed decisions: Be cautious of financial predators or high-pressure sales tactics. Take the time to thoroughly review the policy details, including the fine print, before making a commitment.
• Consider guaranteed issue policies: If you have health issues or are unable to qualify for traditional life insurance, consider guaranteed issue life insurance. While these policies have higher prices and lower coverage amounts, they offer peace of mind by guaranteeing acceptance without a medical exam.
• Evaluate customer service: Choose a company with responsive and accessible customer support. Inquire about their claims process and ensure it is straightforward and efficient.
• Look for flexibility: Opt for a company that offers flexibility in payment options, policy renewals, and the ability to convert term policies to permanent coverage.
• Compare quotes: Obtain quotes from multiple insurance companies and compare the coverage, benefits, and premiums to make an informed decision.

Frequently asked questions