As you enter your senior years, purchasing life insurance can offer your loved ones a crucial financial safety net. This insurance can provide them with support and financial stability in case of your passing. Additionally, it ensures that your end-of-life expenses, such as funeral or burial costs, are taken care of, relieving your family from potential financial burdens.
Although the number of life insurance options may reduce as you age, you still have viable choices to consider. Our team of insurance experts has meticulously analyzed data from 24 top insurers, allowing us to assist you in finding the most suitable senior life insurance companies.
Compare the best senior life insurance companies of 2023
| COMPANY | AM BEST FINANCIAL STRENGTH RATING | OUR RATING |
|---|---|---|
| Penn Mutual | A+ (Superior) | 5.0 stars |
| Protective | A+ (Superior) | 5.0 stars |
| Pacific Life | A+ (Superior) | 4.5 stars |
| Equitable | A (Excellent) | 4.0 stars |
| Midland National | A+ (Superior) | 4.0 stars |
| Transamerica | A (Excellent) | 4.0 stars |
| Mutual of Omaha | A+ (Superior) | 3.5 stars |
| Minnesota Life | A+ (Superior) | 3.0 stars |
| Principal | A+ (Superior) | 3.0 stars |
| Ameritas | A (Excellent) | 2.5 stars |
| John Hancock | A+ (Superior) | 2.5 stars |
| Nationwide | A+ (Superior) | 1.5 stars |
| Guardian | A++ (Superior) | 1.0 star |
Why some companies didn’t make the cut
Out of the 24 insurance companies we assessed, six were selected as the best senior life insurance providers, achieving a minimum of 4 out of 5 stars. Our evaluation criteria excluded companies with high policy rates, excessive internal costs hindering growth, or a history of poor performance. Additionally, those without dependable policy illustrations for permanent life insurance or facing numerous consumer complaints were also not included.
What is senior life insurance?
Senior life insurance is designed for individuals aged 62 or older and encompasses both term life insurance and permanent life insurance. The key feature of any life insurance policy is the death benefit, which provides a payout to the chosen beneficiary/beneficiaries. The beneficiaries can include spouses, partners, children, or grandchildren. How the death benefit is utilized is entirely up to the beneficiary, whether it’s covering funeral expenses, settling debts, managing medical bills, covering living expenses, or handling estate taxes. Alternatively, the payout can serve as a straightforward inheritance, but discussing specific financial goals with a financial advisor is advisable to explore other suitable options.
Types of senior life insurance
When it comes to choosing senior life insurance, there are several options available:
- Term life insurance: This policy locks in rates and coverage for a specific period, usually 10 to 15 years.
- Permanent life insurance: Designed to last a lifetime, this category includes whole life, variable life, and universal life insurance policies.
- Burial insurance: A form of whole life insurance with a smaller death benefit, typically between $5,000 to $25,000, to cover end-of-life expenses like funeral costs or other expenses as desired by beneficiaries.
- Simplified issue life insurance: This type of policy may be term or permanent life insurance that doesn’t require a health exam, although a health questionnaire may still be necessary.
- Guaranteed issue life insurance: Unlike other types of coverage, this policy ensures approval without a health questionnaire or exam, but it is usually more expensive.
What to look for in a senior life insurance policy
Finding affordable life insurance that meets your needs is crucial, and it’s essential to consider various factors beyond just the rates. To ensure you find the best senior life insurance for your situation, here are some key points to keep in mind.
Coverage Length Options:
You have two primary choices when it comes to coverage length: term life insurance and permanent life insurance. Term life insurance is ideal for short-term financial responsibilities, such as paying off a mortgage. On the other hand, permanent life insurance, like burial insurance, offers lifelong coverage.
Age Limits and Renewal Options:
Different insurance companies have varying age limits for issuing policies. Additionally, they may set guaranteed renewal age limits, affecting your ability to extend coverage beyond a specific age. Be mindful of these limits while choosing a policy.
Customizable Policy Riders:
Enhance your policy with add-ons known as riders. These can include long-term care or accelerated death benefit riders, allowing you to tailor the coverage to your specific needs. Keep in mind that some riders may come included, while others might require an extra fee.
Conversion Possibilities:
If you’re contemplating term life insurance but foresee the need for permanent coverage down the line, opt for a convertible policy. This allows you to convert the term policy into a permanent one with a fixed premium when the term period expires.
Chris Orestis, a CSA and president of Retirement Genius, suggests, “Make sure there is a conversion option for a term policy so that a policy can be switched to a permanent form of coverage with a set premium level when the term period of the policy expires.”
Furthermore, explore hybrid-life insurance policies that offer a long-term care rider. These policies can be converted to cover long-term care costs if you meet the required level of care.
By considering these factors, you can secure a senior life insurance policy that not only fits your budget but also aligns with your long-term goals and needs.
The cost of life insurance for seniors
The cost of a senior life insurance policy is influenced by various factors, such as the desired coverage type and amount. Generally, term life insurance is more affordable than permanent life insurance. However, the premium increases with higher coverage amounts.
The insurance company you select also plays a significant role in determining the cost. Each company evaluates risk differently, leading to varying premium assignments. To help you make an informed decision, we’ve provided example rates from insurers that have earned at least 4 out of 5 stars in our rating for the best life insurance options for seniors.
Example annual rates for a $500,000 10-year term life policy for women
| AGE 55 | AGE 60 | AGE 65 | AGE 70 | AGE 75 | |
|---|---|---|---|---|---|
| Penn Mutual | $584 | $854 | $1,433 | $2,319 | N/A |
| Protective | $584 | $853 | $1,433 | $2,319 | $4,911 |
| Pacific Life | $585 | $854 | $1,433 | $2,319 | $4,911 |
| Equitable | $670 | $980 | $1,475 | $2,395 | $5,525 |
| Midland National | $620 | $905 | $1,480 | $2,455 | $5,015 |
| Transamerica | $545 | $1,015 | $1,610 | $2,710 | $4,815 |
Example annual rates for a $500,000 10-year term life policy for men
| AGE 55 | AGE 60 | AGE 65 | AGE 70 | AGE 75 | |
|---|---|---|---|---|---|
| Penn mutual | $785 | $1,284 | $2,207 | $3,684 | N/A |
| Protective | $789 | $1,284 | $2,219 | $3,684 | $7,434 |
| Pacific Life | $789 | $1,284 | $2,219 | $3,684 | $7,435 |
| Equitable | $875 | $1,375 | $2,375 | $3,735 | $7,755 |
| Midland National | $820 | $1,330 | $2,355 | $3,895 | $7,610 |
| Transamerica | $725 | $1,225 | $2,040 | $3,390 | $6,685 |
Alternative life insurance options for seniors
If you find yourself unable to qualify for a traditional term or permanent life insurance policy, or you simply don’t find the available options suitable, there are alternative solutions you can explore.
Option 1: Long-Term Care Insurance
Consider getting a standalone long-term care insurance policy if you view life insurance as a safety net for covering long-term care expenses. Such a policy can provide coverage for expenses related to nursing homes, hospice care, adult day care centers, and physical and occupational therapy, among other things. However, it’s essential to bear in mind that this type of insurance can be quite expensive, so always assess your financial goals before making a purchase.
Option 2: Annuities
Annuities are another viable alternative. They function as a contract between you and an insurance company, where you make premium payments now, and in return, you receive payouts later in life or during retirement. Annuity payments can supplement your income during your retirement years, and you can also designate beneficiaries to receive a death benefit if you pass away before the payouts begin.
Regardless of the alternative you consider, it is strongly recommended to consult a financial advisor before making any decisions. A financial advisor can help you assess how these life insurance alternatives align with your financial goals and fit within your budget.
Pros and cons of senior life insurance
If you’re in your 60s or older and thinking about buying life insurance, it’s crucial to carefully assess your needs and weigh the pros and cons before making a decision. Understanding the benefits and drawbacks of purchasing coverage can help you determine if it’s a worthwhile expense.
| PROS | CONS |
|---|---|
| Beneficiaries can use the death benefit to cover a number of expenses, or as an inheritance | Cost of coverage increases with age which can lead to high rates for relatively low coverage amounts |
| Policies with living benefits may provide early access to the death benefit if you are diagnosed with a terminal, chronic or critical illness | Policies may have graded death benefits, meaning your beneficiary will only receive a partial death benefit if you pass away within two to three years of purchase |
| Some life insurance policies, such as burial insurance, don’t require a health exam or questionnaire | Medical issues can lead to higher premiums and make you ineligible for some types of coverage |
