Best Life Insurance for Seniors: Our Top 5 Options

There’s no doubt about it: the longer you wait to buy life insurance, the more expensive it gets. Even if you’re in top physical condition, a term life insurance policy bought at 60 will always be more expensive than it would have been at 30 or 40. But that doesn’t mean you have to go without.

Best Life Insurance for Seniors

There are some good reasons to purchase life insurance as a senior, or simply an older adult. First, we’ll give you our top picks for life insurance for seniors. Then, we’ll talk about the pros and cons of purchasing life insurance at an older age. Finally, we’ll dive more in depth in each of these life insurance picks to let you know why we chose these companies.

PolicyGenius

A Good option to consider is PolicyGenius. This company provides you with a side-by-side comparison of these top name life insurance policies for seniors. Use the policy aggregator tool to get a comparison of your best policy options so that you can easily find the best choice for you.

Quick Picks: Our Top Five Options for Life Insurance for Seniors

When shopping for life insurance, it’s important to get multiple quotes. We pulled estimates from each of these companies that offered an online quote option. The estimate is for a 55-year-old woman in good health with a healthy BMI. We looked at $500,000 policies with a 10-year term.

Here are our top five life insurance picks for older adults:

Company Policy Cost Why We Like It
Haven Life $61.83/month Underwritten by MassMutual, but with easy online application process.
State Farm $93.55/month Great reviews for customer service
AIG Life $41.00/month Low rates
North American Company for Life and Health Insurance $67.32/month Lower minimum amounts
Mutual of Omaha N/A No exam required for up to $100,000 of coverage

Frequently Asked Questions About Life Insurance for Seniors

Life insurance is a sticky topic at any time. But when you’re an older adult, you may have even more questions. Here are some of the ones we hear most frequently:

Do I even need life insurance?

The answer here is maybe, but maybe not.

Term life insurance is most often geared towards younger consumers who are in the thick of paying off debt, buying a home, establishing a career, and raising a family. But that doesn’t mean you don’t need life insurance once you’re in your fifties, sixties, and beyond.

Here are a few reasons you might:

  1. Your kids are still young. The average age of first-time parents in the U.S. is steadily creeping upwards. If you had kids in your late thirties or early forties–or even later–you may need a term life insurance policy that extends well into your sixties, seventies, or eighties to make sure your family is protected.
  2. You’re still providing for someone with your income. Even if your children are independent, someone else, such as a disabled spouse, may still rely on your work income. If this is the case, you want to be able to replace that income should something happen to you.
  3. You’re still in debt. The idea behind term life insurance is that you’ll eventually be able to self-insure. In other words, you won’t need insurance because you’ll have no debts and enough in savings to cover your end-of-life expenses. But if you’re still tackling that mountain of debt, you may need life insurance to protect your heirs in case of your untimely debt.
  4. You just want to pay your final expenses. A small, affordable life insurance policy can be a good idea if you want to give your heirs a no-hassle way to pay for your final expenses.
  5. You have a large estate. Sometimes whole or term life insurance is part of a larger estate plan. Since proceeds of these policies are generally tax-free, they can be a good way to offset estate taxes. Talk to a professional estate planner if this is your idea.
  6. You just want some peace of mind. If the premium for a small life insurance policy slides easily into your budget, you may want it just to know your loved ones will be provided for upon your death.

What kind of life insurance should I buy?

Even as a senior, most of the life insurance policies available to younger adults are also available to you. With that said, some types of plans are better than others. Here are options to check out:

Term Life Insurance

Generally, term life insurance is the best option. It provides more coverage at a lower rate, since it’s purely insurance. Even if you’re approaching 65 (the upper limit to apply for term insurance at many companies), you can get a policy for less than $100 per month if you’re in good health.

A term life insurance policy is a good way to insure for specific reasons, such as paying final expenses, paying off debts, or providing for your children and spouse for a certain amount of time. If you will only need the life insurance coverage for 10 to 20 years, opt for a term policy.

Term life insurance comes in a few different types. Here are the ones that might suit you best:

  1. Guaranteed Level Term: This type of insurance has a level benefit amount and level premium amount throughout the full term (usually five to 20 years). It gives you predictable monthly payments for a set payout, should you pass away within the term.
  2. Annual Renewable Term: This short-term life insurance policy can be renewed every year for a certain amount of time. So you could renew your policy annually for up to five years, for instance. The benefit is that premiums start out very low, comparatively. But each time you renew, your premiums will increase. Still, it’s a good option if you only need the insurance for a very short period, such as until you retire in two or three years.
  3. Decreasing Term: As you might guess, this type of insurance has a death benefit that decreases each year. The premium is often level throughout the plan, but it starts out lower because of the decreasing payout. If you’re insuring against your debt, this can be a great option.

One thing to keep in mind about a term life insurance policy is that there are no guarantees of renewal. Even with an annual renewable term policy, you’re only guaranteed to be able to renew the policy for a certain number of years.

Since many companies won’t let you purchase a new policy after the age of 65, it’s essential that you figure out up front how long you need your term to last. Longer terms have more expensive premiums. But it’s better to foot the higher bill than to be stuck without life insurance coverage when you still need it.

Permanent Life Insurance

This is the other major category of life insurance. Unlike term life insurance, it covers you for your entire life. But it also isn’t just pure insurance. It also comes with a savings or investing component.

Sometimes you’ll hear “whole life insurance” used interchangeably with “permanent life insurance.” But whole life insurance is actually just one type of permanent life insurance.

Permanent life insurance is much more expensive than term life insurance. And since you’re already purchasing life insurance for a senior, the premiums could be prohibitively expensive.

With that said, sometimes permanent life insurance is the right solution. For instance, say you want to provide for a disabled spouse or child. This person will never be financially independent. So you’ll never be in a position where you don’t need some life insurance coverage. In this case, a permanent life insurance policy is a good idea. And, again, sometimes these policies are part of a larger estate plan.

If you’d like to learn more about the differences between whole and term life insurance check out this article.

We’re focusing on term life insurance for seniors here with the companies we’ve chosen. But we’ll still give you a quick overview of the types of permanent life insurance you might encounter:

  1. Whole Life Insurance: This option comes with a death benefit and a cash value. Parts of your premium go towards the investment portion, on which the insurance company pays dividends. You can withdraw money from the cash value on some policies, and some offer a guaranteed minimum cash value.
  2. Universal Life: This is similar to a whole life policy, but typically has a more aggressive investment strategy.
  3. Variable Life: This option has more investment options, and your cash value will change depending on the underlying investments.
  4. Survivorship Life: If you and your spouse are both providing for a disabled child, this is a good policy to have. It insures both of your lives together and only pays out when you both pass away. It’s cheaper than two separate whole life policies, but similar to them in other respects.

Should I go with a no medical exam policy?

It’s well-known that many life insurance policies require a medical exam. The healthier you are, the more likely you are to outlive your policy. This means you get a better rate.

Most life insurance medical exams are pretty easy. A nurse in an office, or even at your home, will weigh you, give you a questionnaire, and maybe take blood and urine samples. This is by no means a complete physical. The insurer is simply looking for telltale signs of serious future medical problems.

Some people will say you should avoid medical exams, especially if you’re a senior. And we’ve included companies in our list that offer medical exam free policies. If you’re not in great health, sometimes this can be a better option.

However, if you’re in average to good health for your age, a medical exam could actually save you money. Policies that don’t require a medical exam are automatically more expensive, since the insurer is taking on more risk.

Ultimately, the answer to this question depends on your medical history and current state of health. But, generally, if you’re healthy, a medical exam will help more than it hurts.

What should I look for in a policy or insurance company?

Shopping for life insurance online as a senior can be tough. There are loads of options. And more and more companies are offering life insurance for older adults. Having some criteria in mind up front will help you narrow down your options. Here’s what to look for in a company and a policy:

  • Good Financial Rating: The life insurance company you choose should have a good financial rating with a third party company like Standard and Poor’s or AM Best. If they’re solid financially, there’s little chance they’ll be unable to pay out on your policy as promised.
  • Easy Application: You should be able to start the application process largely online, even if you ultimately have to talk to a representative to complete the process.
  • Customizable Options: When looking for a life insurance company, find one that will let you customize your policy. At this age, a policy with a long-term care rider could be helpful. You may also want to customize your policy amount and coverage term or add additional riders.
  • Clear Terms: it’s especially important to understand the terms of your policy if you’re choosing one that’s not straightforward. If you opt for a decreasing term policy, for instance, how often does the benefit decrease? By how much? How does this affect your premiums? And does the policy have a limit on how quickly it will pay out? Some policies that don’t require a medical exam won’t pay if you die within the first two years of the policy.

Our Top Five Picks in Detail

We already listed our top five life insurance picks for seniors in the table above. Here, we’ll detail why we chose these particular companies and which is best.

Haven Life

This company was created by MassMutual, which has a ton of products and an A++ A.M Best rating. Haven Life has an easy online application form and offers medically underwritten insurance, which is often cheaper. You can complete the majority of the paperwork online, which makes getting a life insurance policy really easy.

Haven Life allows you to submit an application until the day before your 65th birthday. But you get an extra four months to actually complete the underwriting process to purchase the insurance.

State Farm

State Farm consistently gets great ratings for its customer service. It offers both term and permanent life insurance policies. Plus, during the quote process, you can look at all sorts of additional rider options. Some of these are things you may not have even thought of.

Start Farm offers term life insurance policies guaranteed to be renewable up to age 95, which is a huge benefit if you need longer-than-average coverage. The policies are also convertible to permanent policies.

AIG Life

As far as customer service goes, AIG Life is somewhere in the middle of the road. But it consistently beats the competition purely on rates. And it has an A rating from A.M. Best.

AIG’s Select-a-Term policy option gives you the ability to customize your coverage term to exactly suit your needs. There are 18 different terms available, which is nice if you have a specific coverage timeline in mind.

North American Company for Health and Life Insurance

This company is rated A+ by A.M. Best. It offers level premium policies that are convertible to permanent life insurance through age 74. This is a good option if you think a term policy will work for you but might need a permanent policy, instead.

The company offers a wide variety of riders, including one that waives certain monthly expenses if you become permanently disabled. Another rider allows you to extend the death benefit beyond the initial term, up to age 120.

Mutual of Omaha

These policies are underwritten by United of Omaha Life Insurance Company, which is rated A+ by A.M. Best. Your term can last up to age 80, and you can take out a policy all the way up to age 74.

If you need a smaller benefit amount, Mutual of Omaha may be right for you. You can get a benefit of $25,000 to $100,000 with an online application only and without a medical exam. Larger benefit amounts are also available, but they may require a medical exam and contact with an agent.

So which is the best option?

There’s nothing like the “personal” in personal finance. We’d love to say that one of these insurance companies is absolutely the best for all seniors. But we can’t. It really depends on what you’re looking for. Here are our top picks for two situations, though:

If you’re looking for the most bang for your buck, go with Haven Life. Its medically underwritten policies fall on the mid-to-low end of the spectrum. But the online application process and reputation for good service make it worth a few extra bucks a month.

If you’re not in great health, consider a no medical exam policy from Mutual of Omaha, especially if you only need a small amount of coverage. The online application makes your life easier. And you’ll know you’re getting a good policy, even without a medical exam.

Topics: Insurance
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