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Term life insurance for seniors offers the gift of a financial safety net for your loved ones as it can provide funds to cover your end-of-life expenses after you’ve passed. In this post, we’ll examine some of the ways that life insurance for seniors can help your loved ones while they grieve your passing.

How Term Life Insurance for Seniors Works

Like all term life insurance, term life insurance for seniors offers financial security for the loved ones of the policy owner, providing a cash payout upon their passing, called a death benefit.

» Compare: Term life insurance quotes

There are two different ways that life insurance can help seniors—either by you, as an elder in your family, getting a policy on yourself, providing a death benefit to your beneficiaries, or by your caretakers getting term life insurance on themselves in order to ensure that you as a senior would be cared for—should anything happen to your caregiver (your son or daughter).

If you are a senior term life insurance policy owner, then you’ll know that your loved ones are protected from any debts that your estate would be liable for after your passing. You’ll also be able to leave an amount that will replace lost (social security or retirement) income, cover future financial contributions you planned to make, or simply ensure that any end-of-life expenses are accounted for.

If you are the caretaker or primary source of support for a senior loved one, then a term life insurance policy will provide the funds necessary to make sure that they are well provided for, if you were to unexpectedly pass away.

The Application Process

To become insured, you’ll need to apply and be approved by a life insurance company.

When you apply, you’ll be asked for basic information—such as your age, gender, and where you live. You’ll also provide details about your current health, medical history, occupation, and any components of your lifestyle that may impact your health (such as tobacco use, if you smoke, for example).

It’s also likely that you’ll take a short medical exam conducted by an examiner chosen by your life insurance company (applicants aren’t allowed to choose their own doctor).

Once the insurance company has received all of your information along with the results of your medical exam, they’ll approve or deny your application.

A few things to keep in mind when getting life insurance as a senior:

  • Life insurance companies will not approve your policy application, if you’re in hospice and terminally ill.
  • However, if you have overcome a past illness, you may be eligible for insurance.
  • There are limits on the terms and amounts of benefits available to seniors that vary by insurance company.
  • For those ages 51 to 60, your insurability limit is 15 times your current annual income, while for those ages 61 to 70, it’s 10 times your income.
  • For those who have already retired, underwriters will look at your net worth and estate to evaluate your insurability and policy limits.

For example, many insurance companies limit death benefits to $250,000 for a 10-year term life insurance policy for seniors up to 65.

At Quotacy, our insurance advisors know which companies offer the best term life insurance for seniors and will guide you toward a plan that makes sense for you. A shorter term, such as with a 10-year term life insurance policy, is one of the more common options for seniors, retirees, and those planning their retirement, but our life insurance quotes tool will help you find the coverage that fits your exact needs best.

Term Life Insurance for Seniors: 6 Reasons Why You Shouldn’t Rely on Medicare Alone

Term life insurance for seniors offers a number of important benefits for families beyond the death benefit.

You never know if you’ll need hospice care, but you can always put a plan in place in case this is something that happens down the road. Purchasing a term life insurance policy when you are healthy is a smart choice in this case, here’s why:

1. Hospice Care Costs Are Significant and Medicare Benefit Levels May Vary

Even though 85% of hospice care expenses are covered by Medicare, Medicaid, and other government agencies, these costs should still be figured into your future financial planning.

Significant cuts to Medicare are being proposed in 2018. If this happens, your family may have to pay a percentage of the costs of hospice care—costs that were previously covered by Medicare.

In addition, The Medicare Trust Fund (the pool of funds that makes payments for medical care to providers) will become insolvent in 2026 unless Congress earmarks new funding for the program before that time. If this happens, then the amount that Medicare pays for hospice care will be decreased by around 13% in 2028. This could happen even if the current administration makes cuts in Medicare funding in the coming year.

In either case, your family may have to cover the difference between what Medicare will pay and the costs of care, and this can present a financial challenge.

Here are just a few examples of the daily costs of hospice care, according to debt.org.

Routine home care:
$146.63 per day for routine day-to-day care. The vast majority of hospice patients receive this type of care.

Continuous home care:
$855.79 for eight hours spent managing acute symptoms during a medical crisis.

Inpatient respite care:
$151.67 per day to allow a relative or friend working as an unpaid caregiver up to five days off.

General inpatient care:
$652.27 per day for care that cannot be provided in other settings.

» Learn more: How to Live Longer and Financially Plan for It

2. Medicare does not pay anything toward hospice care room and board.

If you or your loved one will be living at a nursing home, a hospice care facility, or your own home, you will receive hospice care as a part of your Medicare benefit, but any costs relating to your room and board will not be covered.

3. Hospice care benefits from Medicare will not cover any prescriptions or therapies designed to treat your illness or condition in order to help you recover.

You are not charged for prescriptions designed to control symptoms or relieve pain due to your illness.

However, you wish to receive medical treatment outside of palliative (or comfort) care that is meant to help cure your illness (for example: if you plan to continue with chemotherapy), then you must have insurance that will cover the costs, or you must self-pay.

4. Medicare hospice care benefits is not a replacement for conventional medical insurance.

The medicare hospice benefit does not cover hospital outpatient care or hospital stays. The only exception is if it has been arranged by your hospice care management team and is not connected to your illness or any conditions related to it.

You must purchase and maintain the premiums on a health insurance plan—including the Medicare Advantage Plan—if you do not wish to pay for other healthcare services out of pocket.

5. There are strict caps on Medicare hospice payments.

Aggregate caps on how much Medicare will pay towards your or your loved one’s time in hospice care may change if cuts to the program are instituted. As of 2017, the hospice payment cap is $28,377.17.

This means that payments beyond this amount will become your or your loved one’s responsibility if they remain in hospice.

6. End-of-life expenses are not covered by Medicare.

Funeral and burial expenses can run from $10,000 and up. These expenses can add an extra financial burden to your family at a sensitive time.

You have the option of purchasing final expense life insurance—a type of guaranteed whole life insurance policy that will cover funeral and burial expenses—along with a term life insurance policy in order to make sure all your finances are in order after you’re gone.

» Compare: Guaranteed whole life insurance quotes

The benefit of a final expense life insurance policy is that you:

  • Will be covered for life. You pay only until age 95, but coverage lasts until you die.
  • Will not need to take a medical exam to get life insurance. You won’t be turned down because of your health.
  • Will have a fixed, monthly premium cost that won’t increase.
  • Will ensure your loved ones receive a life insurance payout after your death.
  • Will be fully covered after two years and immediately insured for accidental death.
  • Will build cash value with your policy that you can borrow against, if necessary.

Finding term life insurance for seniors can be challenging, but it can offer the gift of financial security to your family in the form of funds to pay for your end-of-life expenses (medical bills, funeral costs, or anything else) after your passing.

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A Few Questions to Ask When Thinking About Your Insurance Needs:

If you’re your loved one’s caretaker:

  • Am I financially capable of leaving my loved one enough funds to maintain their care for the remainder of their lifetime if I pass away?
  • Did my family member or loved one cosign debt for me (such as student loans) that they (or their estate) will become responsible for if I pass on before them?
  • If I pass away, do I have enough term life insurance to cover any medical expenses that may occur if my loved one chooses to end hospice care and begin new therapy?

If you’re a senior planning for hospice care:

  • If Medicare benefits are reduced, do I have enough funds to provide for my care without straining my savings and/or the amount that I wish to leave my family?
  • In the event that I become terminally ill and my family needs immediate funds to replace my lost income, how will we cope?
  • If I am not eligible for Medicare benefits because of future changes in eligibility criteria, do I have a back-up plan to pay for hospice care?

Fortunately, term life insurance can help.

Term Life Insurance for Seniors and Riders: The Easiest Way to Cover Hospice Care and Protect Your Family

Quotacy works with several term life insurance companies who offer 10-year term life insurance for seniors under 75. While finding term life insurance for seniors can sometimes be a challenge—one that we’re happy to help with—the reward of your effort will be the peace of mind that comes from knowing that your loved ones are protected from financial burden.

With a term life policy, your family will receive funds upon your passing—funds that can help pay for legal fees, funeral and burial expenses, or simply enhance their savings. Another way that term life insurance makes it easy to feel financially secure as you age is through riders—add-ons to your policy that allow you to benefit from your plan before you pass away.

Here are a few to know about:

The Disability Income Rider

A disability income rider provides your family with income if you become disabled—in addition to waiving your premium. The time and amount of income you will receive varies by insurance company.

The Long-Term Care Rider

This rider provides payment for your care if you become ill and must receive help with daily living activities or have chosen hospice care. The amount that you will receive is deducted from the face value amount of your policy, leaving your beneficiaries with less when you pass away.

The Critical Illness Rider

The critical illness rider pays a one-time cash benefit if you become seriously ill and need help with medical expenses or help in paying for hospice services.

Like the Long-Term Care Rider, this payment is deducted from the value of your policy.

The Accelerated Death Benefit Rider

This accelerated death benefit rider also pays out a percentage of your policy’s death benefit if you have a terminal illness and need immediate funds. The amount of the benefit paid by this rider is normally less than $500,000.

The Next Steps: How to Get Term Life Insurance for Seniors

One of the most commonly offered term life options for seniors is a 10-year term life insurance policy. This policy can provide excellent coverage for your needs as you age at an affordable price.

The Estimated Monthly Cost of a 10-Year Term Policy for a Healthy, Non-Smoking 65-Year-Old
Coverage AmountGender
$100,000Male = $53
Female = $34
$250,000Male = $107
Female = $68
$300,000Male = $124
Female = $80
$500,000Male = $202
Female = $125
$750,000Male = $299
Female = $188
$1,000,000Male = $373
Female = $278

The simplest way to find the right 10-year term life insurance policy is to get your quotes online with Quotacy.

If you use our free, anonymous quotes tool you can compare premiums from the best life insurance companies side-by-side in seconds, then select a quote and apply in under five minutes.

At Quotacy, we believe that every family should have a financially secure future. Learn more about term life insurance for seniors and how to get instant quotes.

» Calculate: Life insurance needs calculator

About the writer

Headshot of Kate Thomas, Director of Inbound Marketing, at Quotacy, Inc.

Kate Thomas

Director of Inbound Marketing

Kate is Director of Inbound Marketing working on business strategy, SEO, and writing for QuotacyLife. Kate's gift is explaining complex financial planning and life insurance topics in a simple and direct way to help families become more financially savvy and empower themselves to make wise choices. She works with Quotacy's underwriters to ensure the financial tips shared in her blogs are spot-on and truly helpful to anyone researching the ins and outs of life insurance online. If you would like a topic to be covered in our blog, leave Kate a comment below or connect with her on LinkedIn.

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