Most life insurance companies outside of group or work plans require an individual to go through an exam and application process to determine risk. Age impacts life insurance rates heavily, especially senior life insurance, even for the healthiest individuals, so it is helpful to know what options exist.
Senior life insurance is a crucial component of a sound financial or estate plan. Those who have life insurance can rest assured that their beneficiaries will receive a death benefit when they pass away, which can be used for a myriad of final expenses.
However, those looking for the best life insurance for seniors must review their options carefully to feel confident that the amount of coverage is sufficient to meet their needs. Comparing senior life insurance policies is also necessary as it relates to cost, particularly for those on a fixed income in retirement.
In this guide, we will review the best life insurance for seniors which include affordable term and whole life policies.
- Best Life Insurance for Seniors Comparison
- Review Senior Life Insurance Companies
- Life Insurance for Seniors Explained
Best Life Insurance for Seniors Comparison
No Medical Exam
Age 55 – 85
Up to $25,000
Yes; see review
No Medical Exam
Age 45 – 85*
$2,000 – $25,000
No Medical Exam
Age 50 – 80
$1,000 – $15,000
*Age 50 – 75 in New York
Senior Life Insurance Companies Reviewed
Determining the best life insurance for seniors is not always an easy task due in part to the fact that there are several insurance companies that offer later-in-life coverage. However, the best life insurance can be based on cost and coverage amounts, as well as whether or not a life insurance exam is required to put a policy in place. Below are several senior life insurance companies based on these factors.
New York Life
New York Life is one of the largest insurers in the United States, offering a variety of life and long-term care insurance coverage options. For those aged 55 and up, New York Life provides access to a guaranteed universal life insurance policy for up to $25,000. Individuals up to age 85 may secure this type of policy without undergoing a medical exam or answering medical history questions.
The cost for a New York Life guaranteed universal life insurance policy varies depending on the age of the insured. The company also offers several other options for life insurance for seniors, including term, whole life, and universal life policies, although medical underwriting may be required.
Mutual of Omaha
Another option for the best insurance for seniors is through Mutual of Omaha. Through its guaranteed whole life program, individuals ages 45 to 85 (or 50 to 75 in New York) can secure a senior life insurance policy without a medical exam or health questions.
Benefit amounts range from $2,000 up to $25,000, but the company also offers other options for more coverage with medical underwriting. Mutual of Omaha offers an easy application process online, as well as the ability to get quotes for different benefit amounts in minutes. The insurance company’s price for guaranteed whole life coverage is dependent on the age of the insured at the time an application is put in place.
Banner Life Insurance (Legal and General)
Legal and General Life Insurance, also known as Banner Life Insurance, offers a guaranteed whole life insurance policy to seniors between the ages of 50 and 80. No medical exam or health questions are required, and premiums start as low as $9 per month.
The coverage for a guaranteed whole life policy with Banner lasts for a lifetime, but premiums are only payable until age 95. Premium amounts do not increase over time, and the benefit does not decrease as an individual ages. Policies are available from $1,000 up to $15,000 with an application completed online.
Life Insurance for Seniors Explained
Types of Life Insurance
Choosing the best life insurance for seniors starts with selecting a strong insurance company like one of those listed above. However, there are several different types of life insurance for seniors that should be understood before making a decision. The most common types of life insurance are listed below to help seniors make an informed choice on their life insurance coverage.
Term Life Insurance
Term insurance is temporary insurance coverage, as it provides coverage for a set period of time only. Term insurance may be purchased for five, ten, 15, 20, 25, or 30 years, after which time it expires. The benefit of term insurance is that it is relatively inexpensive compared to permanent coverage, and it can be used to cover decreasing needs like a mortgage balance or childcare for minor children. Term insurance is not often recommended for seniors, as the coverage may not last for as long as they need.
>> Read More: Is term life insurance worth it
Guaranteed Level Term Life Insurance
Guaranteed level term life insurance is a subset of traditional term that offers a fixed premium for a set period. The guaranteed portion of this type of insurance means that you have predictable monthly payments for a steady amount of coverage. This is beneficial for those on a fixed income, but because it is term, it may not be helpful for seniors who live a long life.
Annual Renewable Term Life Insurance
Annual renewable term insurance is a short-term policy that is renewed every year for a set period. Each year, the premiums increase, but they can start out lower than traditional level term policies. This is a good option for those who need coverage for a short timeframe, but it may not be available if there are serious medical issues present.
Decreasing Term Life Insurance
Decreasing term life insurance has a death benefit that decreases over time, although the premiums stay level throughout the policy. This type of term coverage is beneficial to individuals who want a lower cost of insurance but know their need for coverage will go down over time. This is not a good senior life insurance policy for those who want a known death benefit, regardless of when they pass away.
Whole Life Insurance
Unlike term insurance, whole life insurance is a permanent policy. This means so long as premiums are paid, the death benefit is guaranteed to be paid out to beneficiaries. Whole life insurance has level premiums, but it may have an increasing death benefit as well as cash value within the policy. Whole life insurance can be costly because of these additional features. However, it is a smart senior life insurance policy for those that want permanent coverage.
>> Read More: Is whole life insurance worth it
Guaranteed Universal Life Insurance
This type of policy is also a permanent option, but seniors have the option to select when coverage ends. Premiums are fixed for the life of the policy, and because there is no cash value, it can be more affordable permanent coverage than whole life. This is a good option for seniors who can qualify for this type of coverage but want a lower cost than whole life coverage.
>> Read More: How does guaranteed level life insurance work
Universal Life Insurance
Universal life insurance is similar to whole life in that premiums are fixed, the death benefit may increase over time, and there is a cash value component. However, it differs from whole life in that the cash value is tied to an underlying investment, not the financial performance of the insurance company like with whole life policies. Universal life insurance can be slightly less expensive than whole life but more expensive than guaranteed universal life. As a permanent policy, this can be a strong choice for seniors if they are able to qualify.
Burial or Final Expense Insurance
Final expense insurance is a small, permanent universal or whole life policy that does not require a medical exam or health questionnaire. The best life insurance options for seniors listed above are some variation of financial expense insurance. This is a good option for seniors who have medical issues and cannot qualify for coverage elsewhere. However, the older an individual is, the higher the premium cost will be for a minimal amount of coverage.
>> Read More: Is Funeral and Burial Insurance Worth It?
How to Choose Affordable Life Insurance for Seniors
Working with a licensed insurance agent or financial advisor is often a good choice when determining which type of senior life insurance is the best option for you. Because there are several different companies that offer this type of coverage, it is important to shop around to compare pricing and total coverage amounts based on your needs.
The biggest factor in which policy type is the most affordable for you is dependent on the flexibility you want with the coverage as well as the price. The stability of the insurance company, including its financial track record, claims history, and customer service, is also an important factor in selecting the most affordable life insurance for seniors.
How to Save on Senior Life Insurance
Saving on life insurance costs is possible through a few strategies, the first and most important being the age at which coverage is accepted. The younger you are when a policy is put in place, the lower the cost of insurance will be for the remainder of your life. However, for seniors, saving on life insurance often comes down to managing the coverage amount.
Getting a smaller policy means the insurance company is taking on less risk, and ultimately, that means a lower premium payment. Additionally, paying annually can often reduce the total cost of coverage year to year, since many insurance companies add an administrative fee for monthly, quarterly, or semi-annual payments.
Above all else, take the time to shop around with different insurance companies to ensure you receive the most cost-effective coverage based on age, type of policy selected, and the amount of coverage put in place.
>> Read More: 7 ways to save money on insurance
When someone passes away, it is more common than not for his or her family members to have some degree of financial obligation. Funeral costs and burial or cremation expenses are what come to mind first, but there are other reasons why life insurance may be beneficial.
>> Read More: Is life insurance worth it?
Some individuals have debt that must be repaid at the time of their passing, including a mortgage balance, credit card debt, or car loan. If there is not enough life insurance in place to cover these debts, creditors may look to other assets like retirement accounts and savings to cover the outstanding costs.
Additionally, many older individuals want to leave a legacy for their children or grandchildren who will outlive them. When using retirement accounts or investments to live off of during retirement years, seniors may not have enough left over to fulfill their dream of leaving an inheritance to a child or grandchild.
Life insurance offers this benefit because it leverages an individual’s dollar up significantly. The cost of a life insurance premium each month or year is often a fraction of the total benefit paid to beneficiaries, and when paid, the benefit is generally tax-free.