Final Expense Insurance For Seniors
Final expense insurance for seniors is a certain type of whole life insurance policy whose proceeds are generally intended to cover your funeral, burial, and other final expenses. It’s also often called “burial insurance” or “funeral insurance”. These policies are well-suited for seniors for multiple reasons.
First, they accept applicants who can have various high-risk pre-existing conditions, and you don’t have to take a medical exam to qualify.
Second, the premiums are affordable since the coverage amounts are relatively small (usually less than $50,000). Third, the premiums are guaranteed to remain locked in, which is vital for those on a fixed income, especially seniors. Beyond those, there are still many other benefits that widely appeal to seniors.
No Medical Exam Life Insurance For Seniors
No medical exam life insurance for seniors is just as the name implies — you can obtain senior life insurance without having to meet with a nurse to provide blood and urine samples (the insurer would also subpoena all our medical records).
This allows seniors to secure coverage quickly rather than wait months for approval. Depending on your particular age, seniors can get term life, whole life, and universal life without an exam.
Whole Life Insurance For Seniors
Whole life insurance for seniors is permanent coverage that never expires, and the premiums cannot increase. In addition, the policy builds cash value for tax-deferred growth. Whole life coverage is ideal for seniors who want lifelong coverage with guaranteed level premiums.
The cash value is a valuable feature because you can take out loans if you need money in a pinch, but it should not be a primary reason to buy this type of policy.
Term Life Insurance For Seniors
Term life insurance for seniors is temporary (hence the name “term”) coverage that will expire after either a defined number of years or once you reach a certain age. When the policy ends, you’re no longer insured, and you virtually never get your money back.
Most life insurance companies offer 10, 15, 20, 25, and 30-year terms. However, some companies, such as Globe Life, offer coverage that lasts until you reach age 80 or 90 (varies depending on the state).
It’s important to note that your age determines which term lengths are available to you. For example, if you’re 70 years old, most providers will only offer a 10 or 15-year term. Term life insurance is unequivocally the cheapest form of life insurance, but be sure not to rely on a term policy to cover a permanent need.
Universal Life Insurance For Seniors
Universal life insurance for seniors is a type of permanent coverage that combines a lifelong death benefit, cash value growth, and flexible premiums.
It’s very similar to whole life, except that universal life often allows you to adjust your premium payments, and the cash value growth heavily influences whether your policy lasts forever and whether your premium ever increases.
Compared to whole life, universal life will cost less because A) it lacks the guarantees whole life offers and B) it generally builds less cash value. Universal life can be a good option for financially disciplined seniors who want permanent coverage and want the lowest possible payment.
Can Seniors Over 80 Get Life Insurance?
Seniors over 80 can get life insurance, but the options are much more limited than for seniors age 79 and younger. At age 80, there are some (not many) companies that offer a 10-year term.
However, once you’re 81 or older, term life is no longer an option. Burial insurance, whole life insurance, and universal life are still available with most companies. However, your progressive age will result in higher premiums and lower coverage maximums.
Can Seniors Over 85 Get Life Insurance?
Life insurance for seniors over 85 exists, but the options are minimal, to say the least. First, the only type of coverage available is final expense whole life insurance. In addition, only five insurance companies offer policies to seniors aged 86-90.
The price can get quite high due to age, and $25,000 is the most coverage any one company will offer.
For some seniors in this age bracket, the cost is so high that it may be better to put their money in a savings account or pre-pay at a funeral home.
- 86-year-old life insurance options
- 87-year-old life insurance options
- 88-year-old life insurance options
- 89-year-old life insurance options
Is There An Age Limit For Life Insurance?
Age 90 is the absolute oldest someone can be and get a new life insurance policy. That said, life insurance age limits vary by insurance company and product (term, whole, or universal life).
How Much Does Life Insurance For Seniors Cost?
The cost of life insurance for seniors can range from as low as $20 per month to as high as $1,000 per month. It all depends on your gender, age, state of residence, health history, type of policy (this is a significant factor), tobacco or nicotine usage, and how much coverage you’re seeking.
That said, below are some sample quotes for various coverage amounts and policy types.
Which Type Of Life Insurance Is Best For Seniors?
Overall, final expense insurance is the best type of life insurance for seniors, as most elderly Americans only need coverage for end-of-life expenses.
However, many seniors still need coverage for an existing mortgage balance or may still be working and need it for income replacement needs. In which case, a term policy would be more ideal.
Ultimately, seniors should first consider why they need coverage (would the death benefit payout be used for), then work from there to determine which policy best suits their needs.
The general rule to follow is:
- Temporary needs: Go with a term life policy
- Permanent needs: Go with a permanent policy of some kind
Age, health, and budget are also factors that come into play. For example, you may want term life insurance, but you may be too old or unhealthy to qualify for it. The same is true for other types of coverage.
It’s highly advisable to speak with an experienced insurance agent who can assess your situation and needs. That will enable them to provide accurate expectations and recommendations.
Why Do Seniors Need Life Insurance?
It’s undoubtedly true that seniors don’t usually have as much of a need for life insurance as young adults. However, there are many legitimate reasons why seniors need and should get life insurance, including:
- Cover funeral and other end-of-life expenses.
- Provide financial support for a surviving spouse.
- Offset estate taxes.
- Pay off any existing debts, such as a mortgage.
- Leave a charitable gift to family members or a charity.
How Much Life Insurance Should Seniors Get?
For seniors to determine how much life insurance they need, they must first identify the reasons why they require coverage. At that point, it’s simply a matter of asking: how much money will it take to solve the problems that warrant the coverage?
For example, if you need life insurance to cover your funeral expenses, you need to estimate how much your funeral will cost. If you need to pay off a mortgage, you’ll need enough coverage to pay off the existing balance.
Add up all the figures, and that is how much life insurance you should get.
Frequently Asked Questions
Seniors with pre-existing conditions can still qualify for a new life insurance policy. Which products you’ll be eligible for and the cost depend on multiple factors, such as the specific conditions, severity, timing of any health events (such as a stroke or cancer), your age, and how well you’ve been managing your treatment plan. For nearly all seniors, final expense insurance products will be available even if you have very high-risk conditions. Also, guaranteed issue products are available to everyone since there are no health questions or underwriting of any kind.
Social Security, Medicaid, and Medicare do not offer life insurance, nor do they help pay for the cost of a life insurance policy. That said, Social Security will pay a $255 lump-sum benefit when a parent or spouse dies.
The only time a life insurance policy will explicitly cover long-term care costs is when you buy a policy that has a long-term care rider. Such a rider will provide a defined monetary benefit to cover long-term care costs. These riders are uncommon, cannot be added on after the policy is issued, and require further underwriting beyond what the base life insurance policy itself requires. If you’re seeking insurance to cover long-term care expenses, it’s best to buy a standalone long-term care policy. The terms, coverage, and cost basis are superior compared to what you would get by adding on a long-term care rider to a life insurance policy.
Colonial Penn life insurance is rarely, if ever, a good option for seniors because the amount of coverage per dollar spent is abysmally low compared to other providers. For example, a 65-year-old male would pay $119.40 per month for approximately $10,000 in coverage from Colonial Penn. With most other life insurance companies, it would only cost approximately $55 per month. Another significant issue with Colonial Penn is that its $9.95 plan has a 2-year waiting period. Any death during the waiting period will result in Colonial Penn simply refunding the premiums rather than paying the death benefit. Most seniors (even those with pre-existing conditions) can qualify for a life insurance policy with no waiting period.
AARP does offer some competitive life insurance products for seniors. In particular, their simplified whole life policy is priced on the lower end of the spectrum compared to other insurers. Also, they offer very small amounts of term life insurance if you don’t want or need permanent coverage. Where AARP life insurance policies fall short is in the underwriting. Many previous applicants have reported to us that they were denied coverage due to pre-existing conditions common among seniors.
