The Top Life Insurance Options for Seniors

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Quick Answer

The older you get, the easier it is to believe that getting life insurance is impossible. Depending on your health and your budget, you may be able to get the coverage you need to help reach your goals.

If you’re considering getting life insurance, your top options are:

  • Level-term life insurance
  • Whole life insurance
  • Guaranteed universal life insurance

To help you determine which is best for you, let’s discuss each in turn, as well as why you might want to consider life insurance in the first place.

If you have a healthy amount of retirement savings, you might think that you don’t need life insurance anymore. And if everything goes as planned, you’re could be right.

But there are still situations in which getting coverage is worth it, and if that happens to you, you’ll want to know what to get.

3 Reasons Seniors Might Want Life Insurance

If you have a good amount saved up for retirement, life insurance may become more of a want than a need.

1. Prepare For The Unexpected

Even if you start retirement with a comfortable nest egg, there’s no guarantee it will stay that way. If you or your partner develops health problems and needs long-term care, the cost of that coverage can drain your retirement savings.

What’s more, an economic recession can impact even the most conservative of investment portfolios. Having life insurance coverage can give your surviving partner more financial security if something happens to you.

2. Bolster Your Retirement Income

With a permanent life insurance policy, your premiums guarantee coverage for life, and you can build cash value over time. As you get older and your retirement funds start to run out, you can then tap your life insurance cash value through a loan or surrendering the policy to get more money to cover your expenses.  

3. Leave an Inheritance

If you don’t have enough saved up to leave a sizeable inheritance to your children or grandchildren but have enough income to pay for a life insurance policy, you can still provide that benefit to them.  

Alternatively, if you are involved with a charitable organization and want to make a big donation when you die, you can buy a policy and designate the organization as your beneficiary.

The Top 3 Life Insurance Options For Seniors

If you’re considering life insurance as a senior, your top options are level-term insurance, whole life insurance, and guaranteed universal life insurance. Here’s how each breaks down:

Level-term Life Insurance

This type of policy is typically the cheapest of the three and offers coverage for a specific term, such as five, 10, or 15 years. If you die during the term, your beneficiary receives the death benefit. But if you outlive your policy, you get nothing.

Level-term policies charge the same premium throughout the life of the policy, and you can always renew when your term is up. But at that point, you’ll need to prove that you’re insurable again.

Whole Life Insurance

Whole life is a form of permanent insurance, which means that you’re technically guaranteed coverage for life, or up until age 100 or 121.

This type of policy is typically much more expensive than term life because it also contains a cash-value component. This cash value grows over time on a tax-deferred basis, usually with a minimum guaranteed rate, and you can access that cash at any time, either through a policy loan or by surrendering the policy.

Keep in mind, though, that this cash value typically takes 10 to 20 years to start generating a significant amount of cash value. And depending on when you surrender your policy, you may owe taxes.

Guaranteed Universal Life Insurance

Guaranteed universal life is sort of a term-permanent hybrid in that it’s much cheaper than whole life insurance but still offers lifetime coverage.

There is a cash-value component with this type of policy, but it typically doesn’t generate much cash with its low premiums.

That said, it can be a great option if you don’t care about cash value and you don’t want temporary coverage.

Should You Get a No-exam Policy?

If you’re a senior with health issues, you might be wondering if you qualify for life insurance at all. Fortunately, the answer to that question is yes.

No-exam life insurance is exactly what its name describes. You don’t have to undergo a medical exam to get coverage, so medical problems aren’t going to keep you from getting coverage.

Of course, insurance companies take on more risk with no-exam policies, so they typically cost more than policies that require an exam.

So, if you have medical issues, it may be best to consider a no-exam policy. But if you’re relatively healthy, take the medical exam and save some money.    

3 Ways To Get Affordable Coverage

Because of your age, you’re going to end up paying more for life insurance coverage than someone who is in their 20s, 30s, or 40s.

But that doesn’t mean you can’t get affordable coverage. Here are the top three things you can do to cut your life insurance costs.

1. Buy Sooner

The longer you wait to apply for life insurance, the more expensive it’s going to get. This is especially the case if you develop any health issues over time. So, start thinking about getting coverage right before or after you retire rather than waiting until there’s a need.

2. Manage Your Health

Your health is a huge factor in determining your life insurance rates. So, anything you can control in that area is worth working on. For example, losing a few pounds or lowering your blood pressure or cholesterol could make a big difference.

Speak with a doctor to see what kind of action you can take to improve and maintain good health.

3. Shop Around

Every life insurance company has its own way of determining insurance rates, so there’s no guarantee that your local insurance agent or your car insurance company can offer you the best rates.

At Leap Life, we have licensed life insurance agents who can help you not only find the lowest insurance rates for your profile but also help you determine the right kind and amount of insurance you need.

Peace of mind starts at $14/month*

See Your Rate
*Sample quote is based on 35-year-old healthy male in California receiving a $250,000 10-year Term Life policy (Policy Form # I L1702) underwritten by Assurity Life Insurance Company.
ABOUT THE AUTHOR
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Ben Luthi is a freelance writer who covers insurance, credit cards, student loans, and other personal finance topics. His work has appeared in publications like USA Today, The Christian Science Monitor, Credit Karma, NerdWallet, Money, and more.

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