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Life insurance isn’t only for the middle-aged married couple who owns a home and has children. While couples who fit into this category typically realize they have a need for the protection that’s afforded by a life policy, the need is present in individuals of all ages. For seniors, though, it’s not quite that easy to pick up the phone and buy insurance whether it’s because of their age at the time or their health status.
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While buying life insurance on seniors isn’t as easy or straightforward as it is for someone who’s still young, it’s still possible to find affordable coverage. You’ll need to know what type of policies you’ll be eligible and what types of underwriting guidelines might hold you back from getting standard coverage. Read on, and you’ll know where to go and what look for when buying senior life insurance.
Why do seniors need life insurance?
Most seniors don’t have the same financial obligations as someone who’s in their 30’s or 40’s. Typically, their children have grown up and are out of the home living their own lives. It’s also common for a senior citizen to retire and live in a home that’s already paid for and costs very little to manage.
If you consider all of this at face value, it appears as if seniors wouldn’t really benefit from buying life insurance. While it doesn’t make sense all of the time, many times it does. Here are some of the reasons why a retiree or senior in their later years should buy at least a small life policy:
- Paying for Final Expenses: Perhaps the most popular reason seniors who don’t have an income or who don’t have dependents should consider buying life insurance is to pay for final expenses. Believe it or not, the average cost of a funeral today is $7181 for a viewing and burial. If you don’t have insurance, your family takes the burden of paying this cost to celebrate your life and give the send off you deserve. Even a small policy can help pay for these final expenses.
- Helping with Estate Planning: You may put off estate planning, but when you’re in your 60’s or 70’s you can’t put off the conversation any longer. If you want to take care of your family, you need to have an estate plan. An estate plan in conjunction with the right financial tools can help you protect the net worth you’ve accumulated over the years. Since one the biggest mistakes that you can make is failing to have a good plan to pay estate taxes, life insurance planning is key. If you buy life insurance as a senior, it can be a flexible estate-planning tool that will cover the taxes so that assets don’t have to be liquidated or sold.
- You Still have Debt: The last thing you want debt collectors to do is come for your estate while it’s going through probate. Debt doesn’t go away when you die. Since some debt collectors do have claim to an estate before it’s settled, it’s important that you buy insurance that will extinguish your debt. This erases the headache that comes with dealing with debt collectors and shortens the probate time frame.
- You Want to Leave a Legacy: It’s not too late to pass something on to your heirs even if you haven’t been able to invest or save. Buying a life insurance policy ensures that you can pass on a legacy even if you don’t need to replace income or pay off debt.
Is it possible to find standard life insurance coverage as a senior?
Every life insurance company has its own underwriting guidelines and target market. If you’re looking to apply for a standard policy through a highly respected company, you should research what the maximum age limit is through the insurers that you’re leaning towards buying from.
Most companies have age cut-offs between 60 and 70, but others might only offer shorter renewable terms that increase in premium each year.
It’s not common for a standard insurer to offer coverage that will be in effect following the applicant’s 80th or 85th birthday because of how much risk that involves.
Stricter Underwriting Guidelines for Senior Applicants
The underwriting for term life coverage for seniors is generally much stricter because there’s a smaller window left in life expectancy. It’s also common for seniors to suffer aging-related diseases and illnesses. If you are eligible for coverage based on your age, just know that the company will do their due diligence. Here are some ways the company will fully underwrite your application:
- A medical exam is always required for standard life insurance after the age of 55
- The company will order your full medical records through your physician to look for how often you’re treated and if you have undisclosed medical problems
- Most applicants over 50 or 60 must get an EKG to check heart function
- Records through Medical Information Bureau will be checked to see if they have been declined in the past
What are some of the alternatives to standard life insurance?
You don’t have to get a thorough medical exam or answer pages of medical questions to get coverage. There are alternatives to buying insurance through the companies that you know best. Here are some of these alternatives you should know about:
- Stay on a Group Plan: If you’re still employed or your spouse is employed, keep group insurance until you can’t keep it any longer. This coverage pays regardless of your pre-existing medical conditions and is available at a group rate.
- Buy a Guaranteed Issue Policy: Guaranteed issue policies have smaller death benefits but they don’t require medical records or exams. This makes the policy great if you want to pay for final expenses or small amounts of debt.
You can expect to pay more than a young buck for insurance as a senior, but coverage could be less than you think. Make sure that you price the cost of coverage at your current age to see if you can afford the protection. If you can manage the payment, apply for the policy and you can get peace of mind. Compare life insurance rates now by using our FREE tool below!