What Are The Best Life Insurance Policies For Seniors?

14 minute read| Updated for July, 2021

Life Insurance is one of those things that we know we should have, but dread as a topic. Indeed, with so many complicated options and conditions, making a choice out of a variety of life insurance policies can be intimidating.

Checking best life insurance policies on computer

As a senior citizen, buying a life insurance policy it can get even more tricky and expensive because as we age we become a greater risk and payout is more likely.

Ideally, when it comes to life insurance policies for seniors we just want an easy explanation of what’s available and how much it will cost. In this article, we’ll try and demystify the whole topic of life insurance and explore some of the best choices out there for seniors.

Adding a long-term care rider (or a living benefit rider) to your insurance policy gives you access to a portion of your death benefit while you’re still alive and can help cover you in the event you need long-term care in the future.

Keep in mind, though, that the amount will be deducted from the total benefit amount, so your beneficiaries will receive less. However, it’s nice to know that in case of chronic or critical illness you can use this rider to provide financial support if you need it.

Seniors holding paper work

For others that wish to leave behind a more significant amount to their family or charities, GUL can offer death benefits of up to $10 million or more.

The main reasons for getting an insurance policy will help you to decide which type of insurance you should get. Some of the most common reasons seniors need insurance coverage include:

  • Debt Coverage
  • Leaving enough behind to cover outstanding debts like a mortgage, etc.
  • You are Still Employed and Have Dependents
  • In the event of your death, they will be provided for financially
  • Leaving Money to Your Heirs or a Charity
  • A significant death benefit can be a generous legacy to leave your loved ones or charity organization
  • Taking Care of Your Funeral Expenses
  • A death benefit payout to cover your funeral costs (on average 10–25K)

It’s important to decide the amount of death benefit that you want when going with the right life insurance coverage. For many seniors, a high death benefit isn’t necessary. If funeral coverage or enough to cover an outstanding loan is all you need even $100K of coverage can be too much.

There are companies that offer GUL death benefits of $50K to $25K. For others that wish to leave behind a more significant amount to their family or charities, GUL can offer death benefits of up to $10 million or more.

Also, the time-frame of the policy is important to consider. If you only need shorter term coverage, then a Term Life Insurance policy may be the most affordable and appropriate coverage.

If you are in generally good health and wish to take advantage of longer policy duration with consistent payments then a GUL is better because to can set the plan to over age 120! Alternatively, if you are older (up to age 80) when taking out an insurance policy—GUL is still a good option and can give life insurance coverage up to age 120.

Elderly couple filling out paper work burial insurance

Overall, the best life insurance policies for seniors are Term Life Insurance & Guaranteed Universal Life due to their more affordable pricing

Overall, the best life insurance policies for a senior are Term Life insurance and Guaranteed Universal Life due to their more affordable pricing, ability to select the payout amounts you need (lower amounts are available), ability to add riders, which can help out financially while you are alive, and guaranteed death benefit amounts.

Let’s recap our two types of insurance policies and compare:

Term Life Insurance

  • To replace lost wages if primary earner dies first
  • To cover mortgage costs/debt if one spouse dies prematurely
  • Less expensive insurance premiums (especially before age 75)
  • Can help secure bank Loans
  • Can be convertible to permanent if needed
  • Secures protection for divorce decrees
  • Can add riders to the policy that act as living benefits if you become critically ill, chronically or terminally ill
  • You don’t accumulate cash value. Your premium payment insures only a death benefit payout amount
  • The policy has an end-date which means if you outlive your policy you need to renew up to age 90–95 but it becomes significantly more expensive with options of shorter time spans (1–5-year increments)

Guaranteed Universal Life

  • Insurance premiums never go up while the insurance policy is in effect
  • Guaranteed Death Benefit payout amount
  • Ability to set age option to 120 thus eliminating the risk of outliving your policy
  • Can set death benefits of $25,000 to $10 million or more
  • Can purchase GUL through to age 85 as long as you submit to a physical exam (blood and urine test). For seniors who don’t wish to do a medical exam—it’s only issuable through age 80
  • Can add riders to the policy which allow you to use a portion of your death benefit in the case of terminal illness to cover health costs
  • You don’t accumulate cash value. Your insurance premium payment insures only a death benefit payout amount
  • Set payment schedule with penalties for late payment

Again, the older you are the more expensive life insurance coverage gets; so, if you are considering insurance the sooner you get a policy the better. However, it’s never too late, even 80-year-old seniors can get good insurance coverage without a medical exam. If you don’t have a financial advisor there are several places to find qualified financial advice.

Your local area Agency on Aging will have a directory of trustworthy resources. Also, you can try The Society of Financial Service Professionals for a broker referral. We recommend comparing quotes from several providers to find the best life insurance policy at the best price.