How We Chose the Best Whole Life Insurance for Seniors
Finding the best whole life insurance for seniors is not just about finding the cheapest plan or the providers with the best reviews (though these are factors that we consider). Instead, we focus on the specific needs of most seniors. Many retirees live on fixed incomes and want affordable, straightforward whole life insurance policies, ensuring that their loved ones will be financially stable once they are gone. We focused our research on key factors like premiums, age limits, medical exam requirements, nationwide availability, customer service, and the variety of whole life policy add-ons.
Comparing the Best Whole Life Insurance for Seniors
||$25 per month
||Strong financial ratings
||$15 per month
||Excellent risk protection
||$15 per month
||Great customer reviews
||$16 per month
||Fast online quotes
||$20 per month
||No coverage limits
||$12 per month
||Access to AARP resources
*Premiums for term life insurance plans of 20 years, ranging between $100,000 and $250,000 in coverage (as of 2022). These are the lowest available premiums; actual premiums will vary based on age, location, health, and other factors.
What Is Whole Life Insurance?
Whole life guarantees a death benefit to beneficiaries upon the death of the insured person. Additionally, most whole life insurance policies have a savings factor, which uses a fixed interest rate to accrue cash value over time. This is one of the primary advantages whole life insurance has over term life insurance, as term life insurance does not accrue cash value.
While the exact terms and benefits can vary from one provider (or policy) to another, all whole life policies require you to pay monthly premiums in exchange for a specific dollar value of coverage that lasts for life. Some providers offer a cutoff age after which your death benefits will be paid out. Due to the enhanced benefits, whole life insurance is usually costlier than term life insurance.
Does Whole Life Insurance Get More Expensive as You Get Older?
The majority of whole life insurance policies get more expensive as you get older. That said, some providers do offer fixed monthly payments that start higher and never change, regardless of how long you live. Your location, gender, and overall health can also affect the price of your monthly premiums. As of the latest data, the average cost of a whole life plan for a 70-year-old nonsmoker is roughly $237 per month.1 This is more than double the cost of a term life insurance plan for the same age group.
Is Term or Whole Life Insurance Better for Seniors?
Many seniors start with a term life insurance plan and then switch to a whole life plan. This is often the best strategy (assuming that your provider allows you to convert your plan) because it lets you benefit from the lower premiums of term life insurance before switching to a plan that accrues cash value and guarantees a death benefit. That said, this may not be the best strategy for all seniors.
If you are on a fixed income (like Social Security), you may also want a low-cost, fixed payment life insurance plan. In this case, you are probably better off getting a term plan. Alternatively, if you have the funds to pay for higher premiums and you want the value of your policy to grow, a whole life insurance policy is the best option. It all depends on your budget, needs, and short- and long-term goals.
Tips for Choosing the Best Whole Life Insurance for Seniors
Here are a few tips to help you choose the best whole life insurance for you:
- Unless you have a plan with fixed monthly payments (which is rare), you will need to budget for premium increases with each passing year; if your plan starts with high premiums, you may not be able to continue making payments five or 10 years from now.
- Dividends are not guaranteed, so even if you have a plan with dividends, you should not depend on them as a source of income.
- Whole life insurance policies have high lapse rates because many older adults cannot keep up with payments, but even if your plan lapses, you may still be able to reinstate your policy if you act swiftly. Make sure you read the fine print to know whether or not you can reinstate a lapsed policy.
- It is best to research multiple policy types and get quotes from several different providers before making a decision.
- See if the provider offers bundles for different insurance policies at a discounted rate.
- Consider how a life insurance policy will play into your overall estate-planning goals.