Life insurance for seniors: 4 things to understand

Life insurance can benefit both seniors and their loved ones but the pricing structure can be higher.  / Credit: Getty Images

Life insurance can benefit both seniors and their loved ones but the pricing structure can be higher. / Credit: Getty Images

Life insurance can be helpful at any age, ensuring your loved ones are cared for when you pass and, in many cases, giving you a much-needed source of funds while still living.

For seniors, though, life insurance options can be limited. Many companies have age restrictions on certain plans, and those that do offer senior-eligible policies tend to charge higher prices. Are these worth the investment?

If you’re a senior looking for life insurance – or want to boost the coverage you already have – then reach out to a life insurance expert now who can help you get started with a free quote.

Here’s what seniors need to know about their life insurance options.

How senior life insurance works

Senior life insurance comes in several forms: Term life, whole life, simplified issue, guaranteed issue and universal life.

Here’s how those each work:

Term life covers you for a set number of years, possibly five, 10, or 20, depending on your age. If you pass within that time frame, your insurer will pay a death benefit to your beneficiaries.Whole life insurance covers you for the entirety of your remaining life. Like term life policies, they offer a guaranteed death benefit for your beneficiaries and a fixed premium. They also have a cash value that grows over time, which you can withdraw from, borrow against or use to reduce or eliminate your premium payments altogether.Simplified-issue insurance is a type of whole life insurance for seniors who are in generally good health but may have a few chronic health issues or medical conditions. They only require a health questionnaire—not a full medical exam—though they tend to come with smaller death benefits than traditional whole or term life policies.Guaranteed-issue policies are for older seniors or those who are in poor health. They don’t require a medical exam and guarantee a small death benefit for your beneficiaries.Universal life insurance is a type of permanent life insurance that covers you until death. It provides a benefit for your beneficiaries and a cash value account, like whole life, but you can adjust the amount of your death benefit—and your premiums—as needed over time. There is also no guaranteed death benefit. In the event your policy loses its full cash value, there will be no benefit remaining for your heirs.

Not all insurance companies offer all types of policies, so if you’re looking for a specific one, you may need to shop around a bit. Use the table below to explore your options or call a life insurance expert now who can help you find a plan that works for your situation.

What senior life insurance costs

Life insurance tends to cost more for seniors, as they’re seen as higher risk than younger policyholders. The exact cost depends on your age, health, gender, policy type and the insurance provider that you choose.

According to Progressive, the average 60-year-old male pays about $174 per month for $35,000 in whole life insurance, while the average female premium is $135 monthly. At 70 years old, the premium would jump to $263 and $209 per month, respectively.

You can easily get a quote right now by answering a few simple questions.

What senior life insurance covers

Seniors can get up to $1 million in life insurance coverage, though it depends on the type of policy you’re choosing, your health and the budget you’re working with.

With all types of policies, your coverage will go toward the death benefit your beneficiaries are awarded when you pass. On a whole life or universal life policy, your coverage will include both a death benefit and a cash value account, which you can withdraw from, borrow against or use to cover future premiums.

Who benefits from taking out senior life insurance?

The main purpose of life insurance—even for seniors—is to provide for one’s dependents and family members after death. It can also help loved ones cover funeral and burial expenses or settle any medical bills or outstanding debts (like a mortgage, for example) that may remain in your wake.

In the case of whole life insurance policies, seniors themselves may also benefit.

Whole life cash accounts earn interest and grow over time. You can even borrow money from the account, withdraw cash as needed or put the funds toward your policy’s premiums. This can free up monthly cash flow and be helpful for households on a fixed income.

Need senior life insurance? Consider your options

Senior citizen life insurance can be pricey, so make sure you consider a few options before choosing which insurance company to get a policy with.

Start exploring your options today and find a policy that works for you and your loved ones.

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