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Life Insurance for Seniors: What Is It and How to Get It?

It's never too late to get life insurance. While life insurance favors younger people when it comes to being approved for a policy and paying lower rates, seniors are not excluded from reaping the benefits life insurance offers. Life insurance is investing in the financial peace of mind of your loved ones. With one policy, you have the power to erase debts, protect loved ones from financial stress, and ensure that anyone who relies on you can maintain the same standard of living after you pass away.

Key takeaways:

Here, we will look into the different types of policies seniors can enroll in, as well as address the common questions and concerns older individuals have when searching for life insurance.

Do I need life insurance?

Life insurance is a great way to provide extra financial protection for loved ones. Without it, what you can leave behind is limited to your savings and assets. This alone may not be enough to help your loved ones be financially secure, especially after covering costs related to end-of-life expenses, like medical bills and funeral costs. With life insurance, you choose the amount you want disbursed, who you wish those funds to go to, and how much each person gets.

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What is life insurance for seniors?

Life insurance policies are marketed to seniors more than other age groups. The selling points of a life insurance policy for seniors address two of the most significant hurdles older people face when obtaining life insurance - approval and affordability. This could be a term, whole, or burial insurance policy.

In general, life insurance for seniors will have higher premiums and lower death benefits than younger individuals can get. This is because insurers base their rates on an individual's life expectancy. The younger a person is, the longer that person can pay premiums, which translates to a lower likelihood of the insurance company losing money from paying the death benefit. Insurance companies charge higher premiums to older individuals to balance the shorter duration of premium payments.

How can life insurance benefit seniors' spouses?

For a senior, life insurance provides incentives beyond the windfall itself. It can help maintain a spouse's financial independence by resolving the shortcomings of other financial resources seniors may rely on, particularly Social Security benefits and employment pensions. Life insurance can help bereaved older spouses overcome the financial losses from a partner's death.

When both spouses are retired and receive Social Security benefits, each spouse gets Social Security payments based on their wages before retirement. The spouse who earns less will have Social Security payments that will either amount to half of what the other spouse receives in Social Security benefits or an amount based on their income (whichever is the greater of the two). When a spouse dies, the surviving spouse will receive the larger benefit but lose the smaller benefit. Life insurance would help replace this lost income source.

Other ways life insurance can restore financial security for seniors is by replacing the reduced income the surviving spouse may have as a result of taking Social Security benefits before reaching full retirement age (66 or 67 years, depending on birth month) and when a person's spouse has passed away before getting increased pension benefits.

What types of life insurance policies can seniors get?

Seniors have multiple options when it comes to life insurance. Such options include:

  • Term
  • Whole
  • Adjustable
  • Burial
  • Open Care Senior Plan

These policies primarily differ in how long they last and whether they build cash value, which can impact monthly premium rates.

Term life insurance

Term life insurance is usually active between 10 to 30 years. The death benefit is released if the policyholder passes away during the term. Once the term ends, the policyholder can renew the policy or cease coverage. If the policyholder discontinues coverage, then there will be no death benefit. If the policyholder renews, the premiums will increase due to the person's age and health.

Individuals in their 50s typically get longer policy terms than those in their 60s and 70s. For example, a company may be willing to issue a 30-year term policy to a 50-year-old but limit those 60 and over to policies lasting no longer than 10 years.

Whole life insurance

Whole life insurance coverage lasts a lifetime. These policies feature a cash value component. A portion is allocated to the cash value account when premiums are paid. The cash value can grow with interest or be invested into the stock market to earn capital gains in thriving economic conditions. This gives policyholders another source of funds to access, and they can be used for anything from emergencies to paying premiums.

Adjustable life insurance

Adjustable life insurance is geared toward those with a strong preference for flexibility. This may appeal to seniors because policyholders can adjust coverage length, premium amounts, premium payment schedule, and the death benefit amount. This is helpful when circumstances change. Seniors may decide to lower their premiums and reduce coverage after developing health problems or struggling financially. Conversely, an individual may decide to increase coverage after the birth of a grandchild.

Burial insurance

Burial insurance, also known as final expense insurance, doesn't expire. Premiums are inexpensive, but the death benefit is lower than standard whole-life insurance, usually not exceeding $50,000. However, this lower death benefit reflects its common use, covering final expenses such as medical bills, funeral expenses, and burial or cremation costs. Burial insurance for seniors is one of the best choices.

These policies are easy to qualify for. There's no medical exam. The medical underwriting is limited to health-related questions. Guaranteed-issue burial insurance policies don't have a medical underwriting component, but coverage often requires a waiting period of one to three years before taking effect.

Burial insurance can be great life insurance for seniors over 60. It could also be excellent life insurance for seniors over 70, as it is one of the more inclusive forms of life insurance.

Open Care Senior Plan

The Open Care Senior Plan comes from Open Care Seniors, an insurance agency representing multiple companies. Open Care Seniors offers different types of policies, including term life and Medicare, but they primarily offer burial insurance.

The Open Care Senior Plan is a blanket term for the life insurance policies that Open Care Seniors sells, which is typically burial insurance. These policies usually have a death benefit of up to $25,000 with a two-year waiting period. Depending on the company that Open Care Seniors issues the policy through, policyholders may be able to attach an accelerated death benefit rider, which enables access to the death benefit after a terminal illness diagnosis.

Seniors can complete the enrollment process entirely online. Once a rate is assigned, it remains fixed throughout the time the policyholder has the policy, so there will not be any unforeseen premium increases.

How can seniors get life insurance?

Seniors can enroll in life insurance by contacting an insurance company, agency, or broker. This can be done by phone or online. What you can enroll in will depend on what that insurer offers - some companies only sell certain types of life insurance (e.g., term life), while others may offer a broader selection of policies.

Once you've decided on a policy, death benefit amount, and who you choose as your beneficiaries, you'll answer a series of questions, providing such details as age, height, weight, lifestyle choices, and health history. You may have to undergo a medical exam, depending on the policy type. However, many policies designed for seniors will omit medical examination from the process and instead limit medical underwriting to health questions or even skip the medical underwriting process altogether.

Insurers will then assign a premium rate based on the type of policy, death benefit amount, and the details provided on the application.

Life insurance quotes over 50

The cost of life insurance can vary according to age, gender, lifestyle, health, family history, and hobbies. Once an individual is over 50, life insurance becomes increasingly more expensive, thus, choosing the best life insurance for people over 50 might be challenging. However, women will always have lower rates due to longer life expectancy.

For example, here are average monthly rates for a 10-year, $250,000 term policy according to age and gender:

AgeAvg. monthly rate (men)Avg. monthly rate (women)
50$23.15$19.96
60$58.51$40.70
70$175.57$109.09

Term policies are usually less expensive than whole life policies, even when compared to whole life policies with a lower death benefit.

For example, here are average life insurance quotes for universal life insurance (a type of whole life policy) with a $100,000 death benefit among the same age groups:

AgeAvg. monthly rate (men)Avg. monthly rate (women)
50 $139$121
60$220$189
70$378$314

Life insurance policies of any type will follow a similar cost trajectory to the average rates above. Although it's never too late to get life insurance, joining sooner rather than later is better. It's also good to compare rates and to check senior life insurance reviews when deciding on a policy.

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