Best Life Insurance for Seniors: Affordable Options for All Ages
Life insurance is critical for seniors who want to provide financial security for their families, regardless of age. Whether you need life insurance to cover your funeral expenses or to ensure your spouse's financial security in retirement, you can usually find the coverage you require at a reasonable price.
Best life insurance policies for senior citizens
As a senior, you may have fewer options for life insurance depending on your age and health. There are no significant restrictions if you are under the age of 70 and in good health. You may simply need to broaden your search to include a broader range of companies, as some insurers will limit the age group that can purchase a specific product.
If you are under the age of 80 and in good health, you should be able to qualify for term or guaranteed universal life insurance policies with low rates for the elderly. If you have certain pre-existing medical conditions, however, guaranteed whole life insurance may be your best option for coverage.
No matter your age, you should still evaluate life insurance policies based on your goals and the financial needs of your family, as these are critical in determining your best coverage.
Life insurance for seniors over 70
As a senior over the age of 70, you have very few restrictions on the types of life insurance policies available to you. The only limitation is that you are unlikely to find a term life insurance policy that lasts more than 20 years. As a result, your decision on which policy to purchase should be based primarily on your financial goals and the cost of coverage.
If you want coverage for a set period of time, such as 10 or 15 years, term life insurance is the least expensive option, and you can purchase coverage worth hundreds of thousands of dollars. If you need coverage for a mortgage or to replace your income until retirement, term life insurance is usually the best option because these financial obligations will be reduced or eliminated over time. Just make sure that the term policy will cover the entire term of a financial obligation, as you will have a more difficult time finding coverage and will have to pay higher rates if you need life insurance at the age of 80 or 90.
If you want coverage that will last your entire life, you should look into permanent life insurance. Some of the reasons you might want permanent life insurance coverage include:
- Funeral and end-of-life costs. The average funeral and burial cost around $10,000, and cremation costs typically exceed $2,000 per person. If you haven't saved enough money to cover these expenses, they will be borne by your family regardless of when you die.
- Medical expenses. Unless you die unexpectedly, you are likely to accrue medical expenses that will have an impact on your family. This can be especially challenging if you require full-time care or assistance in a nursing home.
- Replacement of a pension. If your spouse relies on your pension income to cover expenses, you may need enough coverage to ensure they can maintain their standard of living after you die.
- Estate taxes. The value and type of assets being passed on determine whether your family will require assistance to cover estate or inheritance taxes. If you have a significant illiquid asset, such as a piece of property, that you want your family to keep, life insurance can cover the estate taxes without forcing your family to sell.
While whole life insurance is the most common type of permanent coverage, guaranteed universal life insurance is usually a better choice for seniors.
- Whole life insurance policies have the advantage of accruing cash value over time, which can be borrowed against or withdrawn. However, because a portion of the premium is applied to the cash value, whole life insurance is significantly more expensive. The cash value of whole life insurance is less valuable for seniors because there are fewer years for it to grow with interest.
Guaranteed universal life insurance, on the other hand, is essentially a term life insurance policy that lasts until a specified age (such as 90, 100 or 121). As a result, guaranteed universal policies provide lifelong coverage at a lower cost.
Life insurance for seniors over 80
Seniors over the age of 80 are typically ineligible for term life insurance policies with terms of more than ten years; however, you may be eligible for permanent coverage. A permanent policy is also a better option, as it can be extremely difficult to obtain coverage after the age of 90 if you still have financial obligations. The most affordable option for permanent life insurance, depending on your health, would be:
Health | Best life insurance |
Fairly healthy, no real medical issues | Guaranteed universal life insurance. Policies offer coverage up to age 121 and can provide hundreds of thousands of dollars in death benefits. |
Some health trouble, wouldn’t pass a medical exam | Simplified issue guaranteed universal or whole life insurance. Since there’s no medical exam, these policies are more expensive but still offer lifelong coverage and up to $250,000 in death benefits. |
Not healthy, need assistance getting around or have a higher-risk illness | Guaranteed acceptance whole life insurance. Since you can’t be denied coverage, rates are incredibly high and death benefits are typically less than $25,000. |
Life insurance living benefits for seniors
Depending on the insurer, some life insurance policies either include "living benefits" or allow you to add them as riders. Living benefits are policy features that provide financial assistance while you are still alive. The following are some of the most common living benefits:
- Accelerated death benefit
- Accidental death and dismemberment
- Premiums are waived.
If you are diagnosed with a qualifying illness, an accelerated death benefit rider simply allows you to receive a portion of your death benefit sooner. As a senior, this option can be extremely beneficial if you are concerned about your ability to cover medical expenses that are common later in life. Just make sure that the insurer will accelerate the death benefit for a variety of illnesses, not just terminal ones.
- The amount of money you can receive as an accelerated death benefit is limited to a percentage of the death benefit or a fixed dollar amount. When you die, this amount will be deducted from the death benefit your family receives. So, if you had a $500,000 death benefit and your insurer limited your ability to accelerate it to "the lesser of $250,000 or 75 percent of the policy's face value," you could request up to $250,000 while still alive.
Accidental death and dismemberment coverage can also serve as a living benefit because the dismemberment coverage pays out if you sustain certain injuries in an accident. Each insurer covers a different set of injuries, such as blindness, limb loss, hand loss, or paralysis. Depending on the nature of the injury, you may be entitled to a percentage of the death benefit as compensation.
A premium rider waiver allows you to stop paying premiums while still maintaining coverage. This option, however, is usually only available if you become completely disabled and usually expires when you reach a certain age (such as 80).
Best term life insurance for seniors
Because each insurer has its own age cutoffs for term life insurance, you may need to shop around to see if you qualify. Furthermore, depending on the amount of coverage you want and your health, you may have difficulty getting approved.
To find the most affordable coverage for seniors, we compared term life insurance quotes from dozens of insurers.
Foresters Financial Services
Foresters has some of the best term life insurance rates for seniors on the market, and they even offer coverage if you're over 70. Furthermore, they allow you to accelerate your death benefit if you develop a chronic, critical, or terminal illness. If you have a heart attack or a stroke, this can help cover the costs of medical care. If you need coverage later, any Foresters term life insurance policy can be converted to a permanent life insurance policy.
Legal & General
Banner term life insurance policies are only available until the age of 75, but the insurer offers some of the best rates available, even if you have some medical conditions. Banner Life, for example, will accept common conditions such as mild asthma or sleep apnea. They will also give you a discount if you regularly engage in health-care activities (such as getting an annual physical). Banner's only limitation is that it does not provide medical exam life insurance to seniors.
Best guaranteed universal life insurance for seniors
Because policies typically have little to no cash value component, guaranteed universal life insurance is the most affordable way for seniors to obtain permanent life insurance coverage. When you buy a guaranteed universal life insurance policy, you can specify how long you want your coverage to last, with typical options ranging from 100 to 110 to 121 years old. We compared guaranteed universal life insurance quotes to find the best senior coverage companies.
The North American Company for Life and Health Insurance provides guaranteed universal life insurance coverage that can be purchased up to the age of 85, and their rates are consistently among the lowest. While coverage is available until the age of 120, you only pay premiums until the age of 100. As a result, if you live longer than expected, you will not be required to make additional payments to maintain coverage. Their policies also allow you to accelerate the death benefit if you become seriously ill and require assistance with medical expenses or other costs.
Symetra
Symetra also offers guaranteed universal life insurance at consistently low rates, with the option of accelerating the death benefit if you are diagnosed with a chronic or terminal illness. While it is not the primary benefit of the policy, Symetra's guaranteed universal life insurance does build a cash value with a guaranteed annual interest rate of 2%. Coverage is available until the age of 85, and you can get lower premiums if you live a healthy lifestyle.
Best guaranteed acceptance whole life insurance for seniors
If you do not qualify for a fully underwritten or simplified issue life insurance policy but still require coverage, guaranteed acceptance whole life insurance is an option. Just keep in mind that these policies have a waiting period or a graded benefit, which means that if you die soon after purchasing, your beneficiaries will not receive the full death benefit. In most cases, your beneficiaries will receive only the sum of the premiums paid plus interest.
While all guaranteed acceptance whole life insurance policies are reasonably priced and have limited coverage options, some have particularly restrictive terms and high quotes. We scoured the market for the best guaranteed issue life insurance options for seniors.
AIG
AIG's guaranteed acceptance life insurance is available to seniors aged 50 to 85, with death benefits ranging from $5,000 to $25,000. Their waiting period is only two years, during which time you will receive the amount paid in premiums plus 10% interest. AIG is our preferred provider of guaranteed issue whole life insurance because they allow you to accelerate the death benefit if you become ill. This is a less common option for guaranteed acceptance policies.
Mutual of Omaha
Mutual of Omaha also provides competitive rates on guaranteed issue whole life insurance as well as a broader range of death benefits. You can buy coverage for as little as $2,000 and up to $25,000. The waiting period for Mutual of Omaha is also two years, but beneficiaries would receive 20% interest on top of premiums paid during that time.