Life insurance for seniors

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As people get older, having life insurance can provide much needed financial peace of mind. A good life insurance policy could be a useful financial tool to help seniors pay off their mortgage, erase debt and get supplemental income after retirement. In addition, leaving loved ones enough money to pay outstanding debt, funeral costs or estate taxes (if a large inheritance is left) can reduce financial burdens inheritors may face.

To choose the best life insurance for seniors, there are a few things to keep in mind. Seniors need to decide how long they need coverage for, how much coverage they want and what they want to use the money for. They also need to name a beneficiary who will eventually receive the funds.

The best life insurance for seniors

There are many life insurance companies on the market. Each provider has pros and cons, so it is important to find the best company with the right coverage options before purchasing a policy. Here are the best life insurance companies for elderly individuals.

Company Superlative
Mutual of Omaha Best for online resources
New York Life Best for AARP members
AIG Life Best for seniors on a budget
Transamerica Best for final expense policies
Haven Life Best for recently retired individuals

Mutual of Omaha

Mutual of Omaha underwrites its policies through United of Omaha Life Insurance Company, which is a highly ranked insurance provider. The company offers term, whole and universal life insurance policies. Seniors can purchase a policy up to age 80, although final expense insurance is available through age 85.

Mutual of Omaha is a good senior life insurance company thanks to the recently launched Mutual Cares. The online resource was designed to inform seniors about the topics they may be interested in, such as combating loneliness, along with health and wellness topics specific to seniors.

The company is financially strong with an A+ rating from AM Best and an A+ rating from S&P. Mutual of Omaha also received a high score in the 2020 J.D. Power U.S. Life Insurance Study, with a score of 789 out of 1,000 for overall satisfaction, earning it the fifth place in the study. Mutual of Omaha is a great life insurance company for any senior who is looking for financial help during retirement and is starting to plan for final expenses.

New York Life

New York Life specializes in life insurance, retirement planning and long-term care. The company offers term, whole, universal and variable universal life insurance for seniors. New York Life also offers a number of flexible policy options and compounding coverage that seniors can use as they get older.

AARP members have access to exclusive pricing and coverage through a partnership with New York Life. Members can get term and permanent coverage up to $100,000 with no medical exam.

New York Life is a one-stop-shop for every life insurance need, with great ratings. It earned a rating of 784 out of 1,000 from J.D. Power, placing right behind Mutual of Omaha. It has an A++ rating for financial strength from AM Best and an AA+ rating from S&P. New York Life’s financial strength is a good indicator that it will be able to supply funds to seniors for the duration of their policy.

AIG Life

If price is your main priority when shopping for life insurance, AIG is a great option. According to its website, the company offers $250,000 of term life insurance coverage for $14 per month. AIG offers term life, whole life, guaranteed issue whole life, universal life and accidental death life insurance. It also offers a “Quality of Life” term policy, which is term life insurance with living benefits.

AIG Life does not have the highest customer ratings from J.D. Power, but it is one of the cheapest life insurance providers for seniors on the market. The company is also financially strong, with an A rating from AM Best and an A+ rating from S&P.

Transamerica

Seniors looking specifically for final expense insurance should consider Transamerica. The company is known for offering robust and customizable final expense insurance options. In addition to final expense insurance, Transamerica also offers whole, term, universal and index universal life insurance policies.

Most of Transamerica’s insurance plans require a medical exam. The guaranteed issue final expense policy is the only plan that does not require an older adult to undergo lab tests or medical examinations. Instead, Transamerica uses proprietary underwriting algorithms to determine insurability and to issue immediate coverage with no waiting period.

Transamerica is strong financially, with an A rating for financial strength from AM Best and an A+ rating from S&P. However, the company placed well below industry average in the 2020 J.D. Power U.S. Life Insurance Study, with a score of 734 out of 1,000.

Haven Life

Haven Life underwrites its life insurance policies through MassMutual, which received an overall customer satisfaction score just above industry average from J.D. Power. Haven Life offers comprehensive coverage at an affordable price, making it a good option for seniors who are recently retired and planning for the years to come.

The one downside to Haven Life is that they only offer term life insurance. However, term policies with a death benefit of $100,000 to $3 million are possible for applicants up to the age of 65. Haven Life’s parent company, MassMutual, also has good financial strength, with an A++ rating from AM Best.

What type of life insurance policy is best for seniors?

There are many different kinds of life insurance, and each option comes with pros and cons. Since seniors may already pay a higher life insurance premium than younger customers, understanding your life insurance options can help you to make an informed decision regarding your life insurance policy.

Term life insurance for seniors

Term life insurance covers you for a specified period of time, usually ranging from five to 30 years. At the end of the term you will typically have the option to continue coverage without a medical exam. However, the policy premium will be reassessed based on your current age. Simply put, the older you are, the more expensive a term policy policy will be. If you are a senior and considering term life insurance, be sure to think about your future budget and if you will want to renew the policy at the end of the term.

Permanent life insurance for seniors

Permanent life insurance covers either you until your death or until you choose to surrender the policy. Permanent life insurance comes in two main forms: whole life insurance and universal life insurance. Diving deeper, there are subtypes of each form, such as variable universal life insurance. Since it covers you until death, permanent insurance tends to be more expensive than term life insurance, but does provide the peace of mind that the policy will be there to provide financial assistance to your loved ones after your death.

Guaranteed universal life insurance for seniors

Universal life policies are a type of permanent life insurance. Universal life policies are more flexible than whole life policies, and the same is true for guaranteed universal life insurance policies. These policies can be thought of as a cross between whole life insurance and term life insurance. Unlike a term policy, they cover you until your death, but do not have the same kind of cash value component as whole life policies, making their premiums lower. You may also have the option to adjust your death benefit amount if your life insurance needs change. Guaranteed universal life insurance can be a great fit for seniors who want lifelong protection but want the flexibility to update their insurance without taking out a new policy.

Guaranteed acceptance whole life insurance for seniors

Guaranteed acceptance whole life, sometimes called guaranteed issue whole life, is a whole life policy for which coverage cannot be denied. This does not mean that the premium will be low—premiums can be high depending on your age and your answers to the application questions—but you cannot be denied coverage. Guaranteed acceptance whole life insurance is sometimes called final expense insurance and is designed to cover funeral expenses and other costs related to a policyholder’s death, like a headstone or funeral home fees. Coverage amounts are low, generally $10,000 to $25,000. These types of policies are ideal for seniors as there is generally no medical exam required.

Choosing the best senior life insurance policy for you

Seniors generally have different priorities than other generations. They may be paying off debts and phasing into retirement, helping children and grandchildren with their finances or preparing for end-of-life costs. Before purchasing life insurance, it is helpful to understand what factors you may need to consider at various ages.

Life insurance for seniors over 60

In your 60s, you may still be working and starting to think about retirement. Now is the time to make sure your life insurance is in place because life insurance premiums are generally less expensive the younger you are. You may want to think about replacing your lost income if you were to pass away suddenly so that a spouse or other loved ones who depend on your income would be provided for. Additionally, if you have grandchildren (or anticipate that you will in the future), you may want to consider if you will leave them a financial gift when you pass away.

Life insurance for seniors over 70

If you are in your 70s, you are hopefully well into retirement. If you are retired, replacing lost income for your spouse or loved ones no longer needs to be a factor when shopping for life insurance. However, you will want to consider what your family members will be left with when you are gone. Are you still paying off a mortgage? Do you have any other debt? Do you have enough savings for your loved ones to pay for your funeral expenses and other end-of-life costs? Life insurance can help ease the financial burden of your death for your loved ones, as well as potentially leave a financial gift for them when you are gone.

Life insurance for seniors over 80

If you are 80 or older, your life insurance options may be limited. You may be considering all the same life insurance factors that you did in your 70s, but if you did not obtain insurance at a younger age, you may have fewer choices than you would have. A final expense policy may be the best option to obtain coverage, although the death benefit may be low and the premiums may be high.

How much does a senior life insurance policy cost?

There are several factors that contribute to the cost of a life insurance policy. The main factors are age, health history, gender and lifestyle. Typically, younger people pay less for life insurance than older people. Additionally, healthy individuals will pay less for life insurance than people who have pre-existing health conditions or people who smoke.

When looking at a senior life insurance company, it is important to keep in mind that term life insurance is less expensive than a permanent policy. Because the cost of life insurance is so personalized, everyone will pay a different premium based on their own specific rating factors. Before purchasing life insurance, shop around and get quotes from multiple providers to find the best option for you. And if you are considering buying life insurance, doing it as soon as possible will help ensure your premiums are within your budget—the younger you are, the lower life insurance premiums tend to be.

Frequently asked questions

What is the most affordable life insurance for seniors?

The most affordable life insurance for seniors is going to be different for everyone. For example, a healthy 65-year-old woman will pay less for life insurance than a 75-year-old man who has a history of heart disease. Before purchasing life insurance, get multiple quotes to find which provider can offer the best rate for your circumstances.

What is the best life insurance company for seniors?

The best life insurance company for seniors depends on the price and your coverage needs. Additionally, some companies stand out for their exceptional customer service, while others are known to offer low rates. To find the best company for your needs, consider which factors are the most important and determine the type of policy you need, which will help narrow down the search.

Do seniors need to have life insurance?

Life insurance is not required, but it can be a smart investment for the future. Life insurance gives seniors and their families financial peace of mind and ensures they have money to cover medical debt, pay for funeral expenses and gift money to spouses and other family members. If you need help determining how much life insurance you need, Bankrate has an online tool to help.

 

About the author


Cate Deventer

Cate Deventer
Cate Deventer is a writer, editor and insurance professional. She is currently pursuing a Bachelor’s degree in English with a concentration in Professional and Technical Writing from Indiana University East. She has nearly a decade of experience in the insurance industry as a licensed insurance agent.