Life Insurance for Seniors

Life insurance isn't just for those who are young and healthy. Often, those who are older believe they cannot obtain this type of coverage. You may regret not investing in life insurance sooner so that you could provide your loved ones with the financial support they need at the end of your life. Yet, senior life insurance is available and, for many people, it can help to cover some of those hard-to-manage expenses after death.

What Is Senior Life Insurance?

Regardless of age, life insurance policies are available to those over the age of 65. This includes both term and permanent life policies. They work just like a traditional policy offered to someone younger. That is, they provide a payment at the time of death to the covered individual. That payment, called a death benefit, goes to your named beneficiary. He or she can use the funds for any need including paying for your end-of-life expenses. Your beneficiary can use those funds for credit card payments, to maintain mortgage payments, or help survivors with day-to-day expenses.

There are limitations to some life insurance policies for those over the age of 65. Some term life insurance policies have a cut-off point. At that time, you may no longer be able to renew your term life policy. Each company sets this age. Most commonly, term life insurance policies become harder to obtain by those over the age of 75 – buying a 10-year policy may be, but investing in a 15 or 20-year policy will be harder to do. Those who reach that cut-off limit may be able to invest in whole life or university life policies, though.

Key Benefits of Senior Life Insurance

Having life insurance in place can help you provide for the needs of your loved ones after your death. Take into consideration how these policies benefit you and your loved ones.

  • Some whole life and permanent life insurance policies build value over time as a portion of each premium is invested. You and your loved ones do not have to pay income tax on those funds.
  • Your beneficiary can use the benefits from the life insurance policy for anything. There are no stipulations on how the funds need to be used.
  • The funds from the death benefit do not have to pay any debt – they are protected from access from creditors or debt collectors. These funds do not go through probate court.
  • Certain senior life insurance policies can be cashed out in order to pay for senior care and assisted living.

Most importantly, having life insurance can give you and your loved ones peace of mind. When one spouse dies, the surviving spouse's income from Social Security may be significantly less. This helps to fill that gap, providing you with the means to maintain the same quality of life.

What Does Senior Life Insurance Provide?

Once you obtain senior life insurance, you'll need to maintain payments on the policy. As long as you do, the policy remains in place (term life insurance policies will need to be renewed, though, after the initial term expires.) When the covered person dies, a death benefit is paid directly to the person you name as your beneficiary. This can be anyone you wish to receive those funds.

In some situations, you can use your life insurance proceeds to fund a trust. You can structure the trust to carry out any goal you have – caring for the expenses of a child or grandchild, meeting your charitable goals, or covering other expenses you have. It's up to you.

How Much Is Senior Life Insurance?

The cost of senior life insurance depends on various factors. First, your age and health are key components of that cost. Those who are older or who have diagnosed illnesses may pay significantly more than those who do not have these. More so, the amount of coverage you purchase also plays a role in cost. You can choose a low-end policy worth $5,000 to cover final expenses, for example, and keep your premium very low. Larger policies, even those of $250,000 or more may be available, but they will cost significantly more for seniors to purchase. Other factors that play a role in this include your lifestyle, family history, and profession if you are still working.

The best way to learn how much senior life insurance will cost is to request a quote. There is no cost to obtaining a quote and no obligation to move forward with it afterwards. However, this will provide specific benefits to you. Premiums can range from $50 to $400 per month, or more, depending on numerous factors.

What Is Final Expense Insurance?

You may hear about final expense insurance. This is a type of life insurance designed to provide a lower level of financial coverage. It is meant to help your loved ones cover your final expenses after death. This can include funeral expenses, medical bills, and burial. The average cost of final expenses varies significantly from a few thousand dollars to $10,000 or more if there are medical bills included. You can get an estimate of funeral costs and pricing by using this checklist from the Federal Trade Commission. Final expense insurance tends to be a bit more cost effective than larger policies.

Who Should Invest in Senior Life Insurance?

Do you need senior life insurance? Only you can answer this question. You may not need it if you already have finances in place to cover funeral costs or you have enough money set aside to keep your loved ones secure after your death. You may not benefit if your children are no longer financially dependent on you and you have no financial commitments.

However, most seniors cannot say these things. Rather, they need to seek out these life insurance policies to shore up their finances. If you are even remotely worried what will happen to you or your loved one if one of you were to pass away unexpectedly, it is important to consider life insurance. It is so versatile that it can provide you with peace of mind knowing that any financial need your loved ones have can be met. A no-obligation quote is the best way to gather this insight into the cost as well as the availability of these policies.

  • Was this Helpful?
  • yes   no

Since graduating from Harvard with an honors degree in Statistics, Jeff has been creating content in print, online, and on television. Much of his work has been dedicated to informing seniors on how to live better lives. As Editor-in-Chief of the personal… Learn More About Jeff Hoyt