Who is a senior? In the world of life insurance, life insurance for “seniors” typically refers to people ages 50 to 80. Now, I know some of you 50-year-olds may have just spit your coffee out. But, yes, if you’re getting close to age 50, you’re going to be hearing from AARP soon.
Even if you reject the “seniors” label, you may still have a family or loved ones who rely on your financial contributions. So, if there is someone who depends on you financially, consider buying a life insurance policy. The cost of life insurance does increase as you get older, so it’s a good idea to buy sooner rather than later.
What can life insurance do for seniors? For you? What is life insurance in essence?
The purpose of a life insurance policy whether you’re a senior or not is to provide money to those you love when you die. Our industry refers to this life insurance money as “income replacement.” That may mean that it replaces income that you are still earning if you’re not retired (or never will be), or it may replace the Social Security check that your adult kids depend on.
Also, many people buy life insurance (from newlyweds to seniors) to ensure that their loved ones won’t have to move from a beloved family home or undergo an extreme lifestyle change upon their death.
Your goals for your life insurance policy may vary from these scenarios, but our life insurance needs calculator can help you plan how much life insurance coverage to buy to cover your family. You can also get life insurance quotes instantly after doing your policy needs calculations.
» Calculate: Life insurance needs calculator
End-of-life planning with life insurance… it’s not just for seniors.
Not many of us willingly face our mortality. But, inevitably, someone in our family (or our close friendship circle) dies. Then, we face by extension our own inevitable death, as well as grieving the death of our loved one.
How can we plan for the end of our life or for the end of someone else’s? Start simply by being willing to honestly reflect about it for a minute. If you were to die today, who would be impacted by your death? What could your family overcome after your death? What would negatively impact them forever?
Have an open discussion with your family. See what they think themselves. You may have radically different ideas. For example, some parents may think they need to pay for their kid’s college education. Others may see support after high school graduation to be nice, but optional. It all depends on the family.
Since a life insurance policy provides in essence a “big suitcase of money” after the insured person dies, it will vary by family what that money is used for. Some people will use it to pay for a funeral, burial, cremation, or final medical expenses. Others will use it to pay off the home mortgage, credit cards, or student loan debt. Some wish to ensure their surviving spouse will have enough money to retire.
What is true for all people (no matter your age) is that you need to plan what type of life insurance policy to buy while you have options open to you that suit your wishes, your budget, and your health conditions. So, let’s go over the types of life insurance available for seniors and others.
What types of life insurance are there for seniors (ages 50 to 80)?
Since we’re talking about how much life insurance you might need, let’s clarify the available coverage amounts for each type of policy we can help you with at Quotacy:
- Simplified whole life insurance (no medical exam required but must qualify with medical questionnaire) coverage from $5,000 to $50,000;
- Guaranteed whole life insurance (no medical exam or medical questionnaire required) with coverage from $1,000 to $15,000;
- Whole life insurance (medical exam required) with coverage from $25,000 to $65 million+; and
- Term life insurance (medical exam required or no medical exam with accelerated underwriting) with coverage from $50,000 to $65 million+.
Whole Life vs. Term Life Insurance (ages 50 to 80)
|Whole life||Term life|
|Intended Duration||Lifetime||5, 10, 15, 20, 30, 35 or 40 years*|
|Loans against policy?||Yes||No|
|Death benefit amount guaranteed?||Yes (may increase)||Yes (if policy owner dies during term)|
|May pay dividends?||Yes||No|
*Your age determines how long your term life policy may last.
Term life insurance provides coverage for a specific time period (a term)—usually between 10 and 40 years. A whole life policy provides coverage for your entire life. So, the first question to ask yourself is how long do you need your life insurance policy to last?
If you have 20 years of a 30-year mortgage left to pay, you may wish to just purchase a 20-year term life policy to cover the remaining years of your mortgage payments. This is an affordable way to ensure your family would not have to move if you died unexpectedly.
The second question is how much can I afford to pay for my life insurance policy? Whole (or permanent) life insurance premiums are 5 to 10 times higher than term life insurance rates for seniors due to the permanent policy’s coverage lasting your entire life.
If you have, for example, a special needs child who will rely on the life insurance payout to be able to live comfortably beyond your death, then your whole life insurance policy’s higher premium is worth it to accomplish your goal and to have peace of mind.
If you have maxed out other investment options, such as your 401(k) or IRA contributions, and seek a tax-free way to distribute money to your beneficiaries, a whole life insurance policy is an option to investigate.
If you are in the process of building up your emergency savings fund and have not maxed out your retirement contribution options, then the lower term life insurance rates will be a better way to secure your family’s future.
The face value ($500,000 or another amount, for example) of a term life policy is set at the time you purchase your policy and it won’t change. Whether you die on day two or 19 years into owning your term life policy, it will pay out the full value of the policy upon your death to your loved ones.
To get life insurance rates for seniors by age:
- See sample rates for ages 50 to 65+ tied to different stages of retirement in our blog: Financial Opportunities as You Age,
- Run your hassle-free term life insurance quotes without sharing your contact info on Quotacy now, or
- Contact us to consult with an agent about your whole life insurance needs.
|The Estimated Monthly Cost of a 10-Year Term Policy for a Healthy, Non-Smoking 65-Year-Old|
|$100,000||Male = $53
Female = $34
|$250,000||Male = $107
Female = $68
|$300,000||Male = $124
Female = $80
|$500,000||Male = $202
Female = $125
|$750,000||Male = $299
Female = $188
|$1,000,000||Male = $373
Female = $278
Simplified Whole Life Insurance (ages 0 to 80)
Simplified whole life insurance is a type of permanent life insurance available without a medical exam, as long as you meet a few requirements. The application for this type of product will include a number of health questions such as “In the past 12 months, have you been diagnosed with or treated for liver disease?” The more questions you can answer “No” to the better product you can qualify for.
One life insurance company in particular that we work with offers simplified whole life insurance with three different tiers. These tiers are Level, Graded, and Modified. If you’re able to answer “No” to all of the health questions, you can qualify for the Level product. If you’re only able to answer “No” to two sections of the questionnaire, then you drop down to the Graded product. And if you’re only able to answer “No” to a small section of the questionnaire, you drop down to the Modified product.
The difference between these tiers are the amount of coverage offered and the cost.
|Simplified Whole Life Insurance Product Example|
|Product Tier||Death Benefit (Coverage) Amount||Annual Cost|
|Level||Ages 0-19 = $10,000 – $50,000
Ages 20-65 = $5,000 – $50,000
Ages 66-80 = $10,000 – $25,000
|Example: A 60-year-old male would pay $1,120.75 annually for a $25,000 policy.|
|Graded*||Ages 40-65 = $5,000 – $35,000
Ages 66-80 = $5,000 – $25,000
|Example: A 60-year-old male would pay $1,690.25 annually for a $25,000 policy.|
|Modified**||Ages 40-80 = $5,000 – $25,000||Example: A 60-year-old male would pay $1,690.25 annually for a $25,000 policy.|
*If insured individual dies from a non-accidental death within the first year, beneficiaries only receive 40% of the death benefit. If insured dies from non-accidental death within the second year, beneficiaries receive 75% of the death benefit. Full death benefit after first two years or accidental death.
**If insured individual dies from a non-accidental death within the first two years, beneficiaries don’t receive the death benefit but instead only receive a refund of all premiums paid plus 10%. Full death benefit after first two years or accidental death.
For the same premium price as a simplified whole life insurance policy, you can purchase much more coverage for a traditionally underwritten whole life insurance policy. If you’re relatively healthy, apply for a traditional life insurance product instead.
There are some health questions that automatically disqualify you from buying simplified whole life insurance. If you find yourself in this category, you can consider guaranteed issue whole life insurance.
Guaranteed Whole Life Insurance (ages 50 to 80)
If you don’t believe that you can get accepted for a term life or whole life insurance policy due to poor health, then one option to get insured is to buy a whole life insurance policy where your approval is guaranteed without a medical exam. As we mentioned earlier in this blog, this type of life insurance for seniors is called by many names.
What is final expense insurance?
What is burial insurance?
What is guaranteed approval whole life insurance?
Final expense insurance, burial insurance, or guaranteed acceptance (or approval) whole life insurance are all different names for a small whole life insurance policy that covers your final expenses.
You may use this type of policy to help pay for your funeral costs, end-of-life medical bills, memorial service, or anything else that you choose. The policy is not tied to the services of a funeral home, so your family will have flexibility regarding how the life insurance money may be used.
Guaranteed whole life insurance is the name of the one such “final expense” policy that Quotacy can offer you to help you get insured today.
This type of policy can provide a small amount of life insurance (up to $25,000) to your family after your death. Coverage lasts your entire life, but you only pay premiums until age 95. The policy builds cash value over time that you may borrow against. This is a great option for those whose health will not allow them to buy a term life or traditional whole life insurance policy that requires a medical exam for approval.
Benefits of talking to your family about life insurance
While it’s not easy to plan for death, it is a very loving thing to do. Talking openly about your wishes is a great idea; it will ease your family’s mind as they deal with your passing. Talk to your family about where you have stored your life insurance policy, as they will need to know the details of it to claim your death benefit.
If you are looking for life insurance, Quotacy can help. You can start the process by getting instant term life insurance quotes or keep reading for more information and permanent life insurance quotes.
About the writer
Natasha Cornelius, CLU
Senior Editor and Life Insurance Expert
Natasha Cornelius, CLU, is a writer, editor, and life insurance researcher for Quotacy.com where her goal is to make life insurance more transparent and easier to understand. She has been in the life insurance industry since 2010 and has been writing about life insurance since 2014. Natasha earned her Chartered Life Underwriter designation in 2022. She is also co-host of Quotacy’s YouTube series. Connect with her on LinkedIn.