It’s a common misconception that seniors can’t get life insurance. In fact, lots of life insurance companies will issue new policies up to age 80 or 85. As a senior, you might be able to choose from a full range of life insurance policies, including:
If you’re considering senior life insurance for yourself or a loved one, there are two key questions to ask: Do you really need it? And which type of policy is right for you? We’ll help you find the answers to those questions here.
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Life insurance is a good idea for anyone who has dependents, large debts, or other expenses that might fall to somebody else if they pass away. That includes senior citizens.
Seniors might not have the same financial obligations as young families — like a new mortgage, young children, or college tuitions to think about. But there are still circumstances that can necessitate life insurance well into one’s 60s, 70s, and beyond.
For seniors who don’t already have life insurance, it might make sense to purchase coverage later in life if any of the following situations apply.
As LifeHappens explains: “When the family is forced to sell the business quickly, they may have to sell at a discount or during market conditions that make the business less attractive. In other cases, the business may be worth very little without the proprietor or partner.”
You might also consider life insurance as a senior if you want to leave an inheritance.
Many of the expenses listed above (funeral, debt repayments, selling your house, accounting fees, etc.) can be paid out of your estate. Your estate includes savings and assets that can be liquidated.
Paying off expenses can eat up most of your estate. If you want to leave behind an inheritance but don’t have large savings, life insurance is one way to do that.
But once outstanding debts have been paid, there might not be much left over for your family members.
Life insurance can pad that nest egg, allowing you to leave a sizable inheritance to your loved ones — often at a relatively low cost during life.
Only two types of life insurance are specifically designed for seniors. They are guaranteed universal life insurance and guaranteed issue whole life insurance (often called “final expense” or “burial insurance”). Here’s a brief overview of the two types:
Compare Senior Life Insurance Policies
|Guaranteed Univarsal Life (GUL) Insurance||Guaranteed Issue Whole Life (“Burial Insurance”)|
|Best for||More Coverage Helping Dependends Leaving an inheritance||Less Coverage covering funeral costs no medical exam|
|Average Cost||Higher, due to bigger coverage amount||Lower, due to bigger coverage amount|
|Guaranteed to pay a death benefit||Yes||Yes|
|Medical exam required||Yes||No|
|Has cash value during life||No||No|
NOTE: GUL is usually cheaper per dollar of coverage than burial insurance. However, coverage limits are so different for the two kinds of insurance that it’s difficult to compare rates head-to-head. Any price comparison should take your own coverage needs into account. You can request custom rates for final expense insurance here
Guaranteed universal life insurance (GUL) is not branded “for seniors.” But in many ways it’s one of the very best life insurance options for those over 65. That’s because it strikes a compromise between term life insurance and whole life — offering a lower price tag like term, with the lifelong protection of whole.
How guaranteed universal life insurance works:
Guaranteed universal life insurance technically has an expiration date. But the expiration age is meant to be late enough that policy will outlive you. In effect, this makes the death benefit payout “guaranteed” — just like a whole life policy.
Of course, for GUL insurance to payout, you have to stay current on premium payments for the duration of the policy.
This type of insurance can be confusing — partly, because there are so many names for it. “Final expense insurance,” “burial insurance,” and “funeral insurance” are all the same thing. Another, more technical name is “guaranteed issue whole life insurance.”
“Final expense insurance,” “burial insurance,” and “funeral insurance” are all the same thing. Another name is “guaranteed issue whole life insurance.”
This policy is a simplified type of whole life insurance, meant for seniors or people with pre-existing health issues.
The main benefit? There’s no health exam involved in the application. So you can get final expense insurance even if you have a critical health condition that would ban you from getting other types of life insurance. That’s a helpful feature for many seniors.
How burial insurance works:
Burial insurance is guaranteed to pay out if you keep up with the premiums throughout life.
The main thing to note is that the payout — or “death benefit” — is smaller with burial insurance than with any other kind of life insurance. That means it’s often cheaper for seniors than other life insurance policies (like GUL).
But it also won’t go very far toward providing for dependents or leaving an inheritance. Thus, burial insurance is best if you have limited life insurance needs.
Life insurance is always more expensive for seniors. There are two reasons for that:
Unfortunately, there’s no real way to get around higher life insurance rates as a senior. Especially if you have a pre-existing health condition.
If you take a medical exam and a health issue shows up, your rates will increase. And if you go the no-exam life insurance route, rates are higher across the board. That’s because insurers have to charge more to make up for the added risk of not knowing your health history.
The best way (really, the only way) to find affordable life insurance as a senior is to compare rates from multiple companies before buying.
The best solution is to compare rates from multiple life insurance companies before buying. That way, you can find the best deal on the coverage you need.
Average life insurance rates for 65-year-old
|Guaranteed Univarsal Life (GUL) Insurance||Guaranteed Issue Whole Life (“Burial Insurance”)|
|Coverage amount (death benefit)||$100,000||$10,000|
|Average monthly rate: MALE||$190||$56|
|Average monthly rate: FEMALE||$163||$41|
NOTE: The cost of life insurance varies hugely. The rates shown in the table above are a snapshot meant for comparison only. Your own rate will be different. Request custom quotes to see your life insurance rates today.
There are other life insurance plans available to seniors, if not specifically intended for them. Term and whole life — the two most popular types of life insurance — may be an option for seniors as well depending on age, health, and budget.
Term life insurance is generally regarded as “the best option for most people.” It’s affordable, and only provides coverage as long as you need it (often 10-30 years).
Term life insurance may also be a good option for seniors. It depends on the individual applicant’s age and health. Remember — term life insurance only lasts for a set time period and is not generally expected to pay out. Also, premiums rise steeply with age.
However, for seniors in relatively good health, term life insurance might still be the most affordable option.
Whole life insurance has its own unique benefits, with the ability to grow cash value that you can withdraw or borrow from throughout life.
But a whole life insurance policy purchased after age 65 would likely not have time to accrue much cash or interest, which diminishes its value. In addition, whole life is typically much more expensive than either term life or guaranteed universal life insurance.
For some, purchasing life insurance after age 65 is a wise choice. It can provide a much-needed safety net for loved ones, either by creating dependable cash flow or by protecting one’s family from inheriting large debts.
But a senior life insurance policy doesn’t make sense for everyone. If purchased without real need — or if the wrong kind of policy is chosen — life insurance can be a bigger financial burden than it’s worth.
Before buying life insurance as a senior, consider:
This isn’t meant to scare you away from life insurance. But it’s important to realize this type of plan isn’t for everyone. Make sure you’re aware of the cost versus the benefit before signing on.
Finally, remember that both types of senior life insurance (GUL and burial insurance) only pay out if you pay premiums for the duration of the policy. In this case, the “duration” is the rest of your life.
It’s a big financial commitment, and the long-term benefit to your loved ones should be significant enough to be worth it.
Typically, the best life insurance for seniors is either guaranteed universal life (GUL) or burial insurance. GUL is better for seniors with a large life insurance need. It can create longer-term cash flow or cover large debts. Burial insurance is often best for seniors with limited coverage needs. For example, if you need to cover funeral costs and little else. Term life insurance is another good option for seniors in strong health.
Yes, you can buy life insurance for a parent. A life insurance policy can help cover expenses left to you after a parent passes — especially funeral costs, which can be a large financial burden on family members if there is no financial plan in place. To buy life insurance for a parent, you just need their consent and proof of your insurable interest. “Insurable interest” simply means you’d experience financial loss if that person passes away.
At any age, life insurance costs vary depending on the type of policy, amount of coverage, insurance company, the applicant’s health, and whether or not they take a medical exam. For example, these sites all offer “average” life insurance rates for a 70-year-old man:
|Type of insurance||Amount of Coverage||Average Monthly Rate||Source|
|Term life insurance||$100,000||$97||Insurance Blog By Chris|
|Term life insurance||$500,000||$377||NerdWallet|
|Guaranteed universal life insurance||$100,000||$217||JRC Insurance Group|
|Burial Insurance||$10,000||$74||Lincoln Heritage Funeral Advantage|
|Whole life Insurance||$250,000||$1,000-$2,000||Lincoln Heritage Funeral Advantage|
Term life insurance is likely better than whole life insurance for most seniors. Primarily, because term life is far cheaper. Whole life insurance is much more expensive due to the cash value component included. But for seniors buying a brand new life insurance policy, that cash value component may not provide much value; it can be withdrawn or borrowed from during life, but typically won’t be passed on to beneficiaries after the policy holder passes away.
Term life is the cheapest kind of life insurance. However, it’s hard to make a blanket statement about life insurance costs for seniors. That’s because age and health have such a big impact on rates. Guaranteed universal life insurance and burial or “final expense” life insurance can also be relatively cheap for seniors, depending on policy size. A smaller policy (with a lower “death benefit”) always costs less than a larger one.
Many people stop term life insurance in their 50s or 60s. That’s because it’s often purchased around life’s big financial events (starting a family, buying a house, etc.) and then the policy expires in 10 to 20 years. But there might be reasons to maintain term life insurance as a senior; for instance, if you still have a mortgage or dependents. Some policies even have a renewal clause that lets you extend coverage without taking a second medical exam. This can help you avoid much higher premiums later in life.
You might want to buy life insurance in your 60s or later if: You still have dependents; your savings wouldn’t cover funeral expenses; you’d want to help a surviving spouse cover mortgage payments or rent; you have shared accounts or co-signed debts, or you own a business. These are only general guidelines. We recommend speaking with a financial professional to figure out whether you should buy life insurance in your 60s or later.
Buying life insurance is an incredibly personal decision. The “right” choice depends on your age, your health, your financial portfolio, your family’s needs…
In other words, we can’t tell you what the right or wrong decision is. To find out for yourself:
If you think you or a loved one need senior life insurance, you can connect with insurers to compare options and rates using the link below.