What is senior life insurance? A complete guide to life insurance for seniors.
Senior life insurance
Life insurance is a wise choice at any age, but what you need from life insurance changes as you get older.
A single 30-year-old and a married 60-year-old will have different life insurance needs.
As a senior, you may consider buying insurance as financial protection for your loved ones and to meet your needs toward the end of your life.
Here’s all you need to know about senior life insurance to determine if it’s right for your needs.
Table of contents
- What is senior life insurance?
- How does senior life insurance work?
- Which life insurance is best for seniors?
- Other life insurance options for seniors
- What to look for in senior life insurance
- How to pick the best life insurance for seniors
- Senior life insurance cost
- Senior life insurance FAQ
What is senior life insurance?
Life insurance for seniors typically covers people ages 65 and over.
This type of insurance isn’t one type of policy. Instead, it’s a term used to describe various life insurance policies that seniors may consider.
Some common examples of coverage include medical, burial, or final expense insurance.
In a specific policy designed for seniors, the death benefit can help the insured’s beneficiaries pay for expenses, including:
- Burial costs
- Funeral costs
- Hospital and medical bills
- Remaining financial debts, like credit card bills
Senior life insurance is generally the same as most life insurance. However, life insurance costs for seniors are higher due to the risk involved with insuring older people.
Seniors have different needs and financial situations than younger people.
Carrying senior life insurance in your golden years will provide financial protection for your spouse and allows you to leave your loved ones an inheritance.
How does senior life insurance work?
Seniors have many options regarding life insurance. These options range from temporary to permanent cover and those designed to cover final expenses.
You may be eligible for financial aid while living with a long-term care rider, which is especially useful if you have a chronic or critical illness.
A long-term care rider can protect your savings if your health condition meets the insurance provider’s eligibility requirements.
Depending on your age, you can find term life insurance for seniors covering you for 10 or 15 years.
Comparing your insurance options will help you find the right choice for you.
Which life insurance is best for seniors?
Like any life insurance, you can choose from many types of senior life insurance.
The two most common life insurances for seniors are:
- Term life insurance
- Whole life insurance
Term life insurance
Term life, also known as pure life, is a temporary insurance option. The insured is guaranteed the insurers will pay their death benefit within the specified period after they die.
A term life policy’s value is the guaranteed death benefit. This type of insurance can sometimes be converted into permanent coverage once the policy term expires.
Whole life insurance
This type of life insurance covers the policyholder for their whole lifespan, and a death benefit is paid to a beneficiary upon the insured death.
Whole life insurance, unlike term life, has a savings component called the cash value. Policyholders can withdraw or borrow from the cash-saving component.
Whatever insurance you choose, you must undergo medical examinations to get life insurance coverage as a senior.
The good news is that some insurance companies issue life insurance coverage without a medical exam. However, it is rare to find insurance companies with less strict underwriting rules.
If you’re looking for insurance to help cover your burial and funeral costs, you may want to consider it.
Other life insurance options for seniors
If you’re searching for other life insurance options or finding it difficult to find a policy for seniors, here are some possible options.
Traditional life insurance
This type of insurance policy is a good option if you are healthy and under a certain age. Traditional life insurance can cover the costs of your final expenses.
Simplified issue insurance policy
This type of insurance is ideal if you’ve been denied coverage in the past or if you have medical conditions that aren’t covered. While a simplified issue policy does not require you to take a medical exam, the premiums are more expensive, but they are a convenient choice.
Guaranteed issue insurance policy
This type of insurance policy provides guaranteed coverage; you only have to pay your premiums on time. Again, the premiums are higher than other life insurance policies because there are no qualifications.
Also known as “no questions final expense insurance” or” guaranteed acceptance life insurance,” this option does not require you to undergo a medical examination or any health-related questions.
These policies are guaranteed, and anyone in poor health will typically be accepted.
Guaranteed universal life insurance
This type of insurance is a permanent policy and doesn’t expire so long as the premiums are paid. Guaranteed universal life is a flexible policy, and you can reduce the death benefit if your needs change.
Some guaranteed life insurance policies include a cash value component. You are guaranteed coverage regardless of age, health status, or market changes.
This type of insurance builds a cash value over time, but unlike term and whole life, funeral insurance can be purchased for small amounts. Funeral insurance is affordable compared to other options, and premiums are set at a constant rate for all age groups.
Also known as final expense insurance, this helps pay for funeral services and related expenses after death. These insurance plans are typically bought from funeral homes. These policies are available to buy online as they do not require a medical exam.
What to look for in senior life insurance
Here is what you must look for when searching for a senior life insurance policy.
- Income support for dependents
- Funding for survivors to pay off debts
- The ability to fund an inheritance outside of your assets
- Coverage for potential estate tax liability for beneficiaries
- Funeral expenses and associated costs to close up an estate
- Coverage for any dependents who need lifetime financial support
- Provide liquidity for an estate with mainly illiquid assets, such as real estate
Those are some things you should look out for when purchasing life insurance.
How to pick the best life insurance for seniors
As a rule of thumb, your needs should guide your decision on the types of senior life insurance to consider to find your best choice.
Here are some tips for buying senior life insurance.
Avoid graded death benefit life insurance
Life insurance that pays the full death benefit is the most beneficial choice. Try to avoid a senior policy that has graded death benefits and opt for a more traditional choice.
Graded death benefit policies are designed to pay the full death benefit if you die in an accident, such as a car crash.
If you pass away within the first few years of owning the graded death benefit policy (from a non-accident cause), your beneficiaries won’t get the full death benefit.
Be wary of insurers who want to rush your decision
Financial predators often target seniors. Some insurance companies try to scam elders into buying more than they need. Beware of anyone who tries to rush your decision.
Don’t be sold on non-guaranteed policy projections
Life insurance policies with a cash value component contain cash value projections over time, but not all amounts are guaranteed in these policies.
Don’t let the price be a deciding factor
The price of life insurance is usually a critical factor for most, but don’t base your decision solely on cost. Instead, research all of the available life insurance coverages that suit you.
Use riders included in the policies you’re considering, as they will allow you to add on coverage.
Once you’ve researched potential insurance companies, obtain quotes to find the best senior policy.
Senior life insurance cost
Quotes for life insurance increase as you age, but life insurance for seniors is still available to you at affordable rates.
Those on a budget might opt for funeral insurance, as these policies typically have low coverage amounts and cover specific things. Moreover, burial insurance doesn’t typically require a medical exam.
The cost of insurance is proportional to what the insurer is willing to risk, as life insurance premiums are higher if you have a higher likelihood of dying.
Insurers evaluate several factors to determine the level of risk they assume. Below are some factors that will determine the cost of senior life insurance.
- Type of life insurance policy
- Duration of coverage or its value
- Underlying health conditions
- Occupational hazards
- Driving record
- Tobacco use
Life insurance for seniors quote
The failure to have comprehensive life insurance can cause unnecessary financial suffering to those left behind.
Pitsas Insurances offer competitive life insurance packages for all ages and those wanting to protect their family or loved ones in the event of death.
Why choose life insurance with Pitsas Insurances
- Considerable financial income for your family members
- Coverage of expenses for your children’s education fees
- Immediate mortgage payment coverage
- Beneficial tax benefits and deductions
- Save up to 25% and connect the policy with your medical insurance
To find out more about our life insurance packages, see our website.
To obtain a life insurance quote, see here.
Senior life insurance FAQ
Do I need senior life insurance?
That depends on what you need from senior life insurance. Depending on your needs, you might have other financial protection methods, like pension plans.
You might choose senior life insurance as you think about end-of-life costs or your final expenses if you want to spare your loved ones the financial burden.
How do I qualify for coverage?
You must usually answer a health questionnaire with your application to qualify for coverage. However, you might not need to complete a full medical exam.
When is someone too old to buy life insurance?
Senior life insurance buyers can choose the same types of life insurance as anyone else, including term, whole, and universal life insurance.
Typically, term life insurance is available to buy until 80 years of age. However, the term period will shorten from around age 50.
Whole and universal life insurance (those with cash value) can be obtained with some companies up to age 85.
Is there a specific life insurance policy for seniors?
While there is not one specific policy, there are specific coverages.
Guaranteed issue and burial insurance are two policy types designed especially for seniors.
What is the best life insurance option for a senior in poor health?
Guaranteed life insurance policies without a medical exam provide low coverage amounts but are specifically designed for those who want to cover their funeral costs and other expenses.
Remember that guaranteed issue policies have “graded death benefits,” meaning if you pass away within the first few years of buying the policy, it will not pay the death benefit. Instead, it will pay a refund of your premiums plus any interest.
Can I get an affordable policy?
It can be pricey to obtain a policy later in life. Here are tips to help you access affordable coverage.
- Obtain numerous quotes
- Choose your employee’s group coverage
- Look for senior organization offers and specialized options
What can I do if I no longer want my life insurance?
Life insurance purchased years ago may no longer serve your needs, but instead of taking the surrender value or canceling your policy, you could opt to sell your policy in a life settlement.
A life settlement involves selling a policy to someone else, who becomes the new policy owner.
You can typically get more in a life settlement transaction than the policy’s surrender value but less than its death benefit.
Pitsas Insurances Team