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Best life insurance for seniors
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Key takeaways
- Seniors should consider their financial stability, dependents and potential expenses when deciding on life insurance.
- Term life insurance is typically cheaper and suitable for temporary needs but may have limited term lengths for those over 60.
- Permanent life insurance offers lifetime coverage with a cash value component, but premiums are higher, and the interest rate may be lower than that of other investments.
- Age significantly impacts premiums. Seniors should compare options and consider whether a savings vehicle might be more cost-effective for end-of-life expenses.
Every stage of life has different life insurance needs. While middle-aged adults often seek coverage to settle debts and replace income in case of their passing, seniors may have different priorities, such as covering funeral expenses or fulfilling estate planning goals. Choosing the best life insurance for seniors depends on the type and amount of coverage needed. After evaluating many life insurance companies, Bankrate's insurance editorial team identified Mutual of Omaha, Mass Mutual, New York Life, Prudential and State Farm as some of the choices for best life insurance for seniors over 60. These companies stand out due to features that make them excellent options for life insurance coverage for seniors.
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Whole life insurance combines life insurance with an investment component.
- Coverage for life
- Tax-deferred savings benefit if premiums are paid
- 3 variations of permanent insurance: whole life, universal life and variable life include investment component
Term life insurance is precisely what the name implies: an insurance policy that is good for a specific term of time.
- Fixed premium over term
- No savings benefits
- Outliving policy or policy cancellation results in no money back
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This advertising widget is powered by HomeInsurance.com, a licensed insurance producer (NPN: 8781838) and a corporate affiliate of Bankrate. HomeInsurance.com LLC services are only available in states where it is licensed and insurance coverage through HomeInsurance.com may not be available in all states. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
Life insurance for seniors
Life insurance can be a valuable tool for seniors, offering financial security and peace of mind. Whether or not seniors need life insurance depends on various factors, including their financial situation, health and family needs. According to the 2024 Insurance Barometer Study from LIMRA and Life Happens, the life insurance ownership rate among Baby Boomers, aged 60 to 75 at the time of this survey, leads all generations, reflecting the industry's highest market penetration rate at 57 percent.
Seniors might consider life insurance for several reasons:
- Final expenses: One of the primary reasons seniors may consider life insurance is to cover final expenses, such as funeral and burial costs. These expenses can be substantial, and life insurance can help alleviate the financial burden on surviving family members.
- Debt repayment: Seniors who still have outstanding debts, such as a mortgage or credit card balances, might use life insurance to ensure these debts are paid off without impacting their estate or burdening their heirs.
- Income replacement: Life insurance can provide a critical safety net for seniors who have dependents who rely on their income. This is particularly important for those who may be supporting a spouse or disabled adult child.
- Legacy and estate planning: Life insurance can be an effective way to leave a legacy. It can provide a substantial sum of money to heirs, ensuring that children or grandchildren are financially supported. It can also be used to equalize inheritances or fund charitable donations.
- Term life insurance: Term life insurance is likely the most affordable option for seniors, and it allows customization of the policy length if they have specific finite obligations they want to cover.
However, there are situations where seniors might not need life insurance:
- Financial stability: Many seniors, particularly Baby Boomers, have accumulated significant wealth and have low levels of financial concern. According to the 2024 Insurance Barometer Study, Baby Boomers generally express lower financial concerns than younger generations, reflecting their overall financial stability — consisting of substantial equity and retirement savings.
- No dependents: Seniors without dependents or who have financially independent adult children might find that life insurance is unnecessary. In such cases, the primary purposes of life insurance — income replacement and debt coverage — may not apply.
- High premiums: Life insurance premiums increase with age and health issues. Seniors may find the cost of new policies expensive, making it less attractive compared to other financial planning tools.
While life insurance can be a crucial part of financial planning for seniors, the need for it varies based on individual circumstances. Evaluating financial stability, dependents and potential expenses can help seniors make informed decisions that align with their financial goals and family needs.
The best life insurance companies for seniors
Seniors looking for the best life insurance may want to consider companies with coverage options tailored to older adults. The following life insurance companies are among the best based on Bankrate’s analysis of coverage options for seniors, financial strength ratings from AM Best, customer satisfaction scores from 2023 J.D. Power Studies and digital tool availability. However, the best life insurance company for you may vary based on your preferences and priorities for life insurance and other financial considerations.
| Company | J.D. Power score | AM Best financial strength rating |
|---|---|---|
| State Farm | 843/1,000 | A++ (Superior) |
| MassMutual | 809/1,000 | A++ (Superior) |
| Mutual of Omaha | 805/1,000 | A+ (Superior) |
| New York Life | 794/1,000 | A++ (Superior) |
| Prudential | 779/1,000 | A+ (Superior) |
If you are looking for a good option for the best term life insurance for seniors, look no further than State Farm. It offers many term options and has a selection of coverages that do not require medical exams. The company offers a strong mix of affordable and flexible options with customizable coverage provided through local agents.
State Farm placed well above the industry average in the 2023 J.D. Power U.S. Life Insurance Study, with a score of 843 out of 1,000, making it the best-rated company for customer satisfaction according to the survey. State Farm also won best insurance company for term and universal life in the 2024 Bankrate Awards.
MassMutual received an overall customer satisfaction score well above the industry average from J.D. Power. MassMutual has been in the life insurance industry since 1851 and has a great track record of paying claims and policy owner dividends. They offer term, whole, universal and variable universal life insurance for seniors.
As a mutual life insurance company, MassMutual can offer participating whole life insurance products, allowing policy owners to be eligible to receive policy dividends. While dividend payouts are not guaranteed, MassMutual boasts of having paid dividends every year since 1869. MassMutual ranked third-highest overall in the J.D. Power study for customer satisfaction. MassMutual also won the award for Best Whole Life Insurer in the 2024 Bankrate Awards.
Mutual of Omaha underwrites its policies through United of Omaha Life Insurance Company. The company offers term, whole and universal life insurance policies. Seniors can purchase a policy up to age 80, although final expense whole life insurance is available through age 85.
Mutual of Omaha may be worth considering as a senior life insurance company thanks to its Mutual Cares program. The online resource was designed to inform seniors about the topics they may be interested in, such as combating loneliness, along with health and wellness topics specific to seniors. However, if you value digital tools, you may be disappointed that the company doesn’t have a mobile app.
Mutual of Omaha also received a high score in the 2023 J.D. Power U.S. Life Insurance Study, with a score of 805 out of 1,000 for overall satisfaction, earning it fourth place in the study.
New York Life specializes in life insurance, retirement planning and long-term care. The company offers term, whole, universal and variable universal life insurance for seniors. Rider options include a living benefits option and a spouse insurance rider, which allows your spouse to purchase insurance without a medical exam if you pass away.
AARP members have access to exclusive pricing and coverage through a partnership with New York Life. Members can get term and permanent coverage up to $100,000 with no medical exam, though you still have to answer health questions to qualify for coverage.
Prudential offers two basic types of life insurance: term life and universal life. Prudential may be a great company for seniors looking to customize their policies as policyholders may be able to choose from over a dozen riders, including overloan protection and survivorship benefit access. Prudential has local agents across the country, but its 2023 J.D. Power score is below average and its complaint index from the National Association of Insurance Commissioners (NAIC) is high, so potential customers may want to speak with existing policyholders about their customer service experience.
In addition to life insurance, Prudential offers retirement products and other financial services, which may appeal to shoppers who prefer to manage all their insurance and financial needs with a single company.
What type of life insurance policy is best for seniors?
There are many different kinds of life insurance for seniors to choose from, and each option comes with potential pros and cons. It may be helpful to understand the various types of life insurance so you can make the best choice for your individual needs.
Term life insurance for seniors
Term life insurance covers you for a specified period of time, usually ranging from 10 to 30 years. However, once individuals reach the age of 60, the longest term typically available is 20 years. Term life insurance can be a practical option for seniors, but it’s important to understand the specific benefits and limitations.
PROS
-
Cost-effective: Term life insurance policies are typically much cheaper than permanent life insurance policies.
Temporary coverage: May be sufficient if you only need coverage for a set period of time.
Convertible or renewable: Term policies are often convertible or renewable for extended coverage if needed, allowing for flexibility as your needs change.
CONS
-
Limited term length options: Seniors have limited term length options, with a maximum term of around 20 years for those over 60.
-
No death benefit after expiration: If you pass away after your policy expires, your beneficiaries will not receive a death benefit.
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No cash value component: Term life insurance does not build cash value, which can be a disadvantage compared to some permanent policies.
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Limited conversion timeline: For policies issued to those 60+, the period in which you have to convert is often shorter (five to 10 years) than for policies issued to younger people.
Permanent life insurance for seniors
Permanent life insurance provides coverage until death, typically within a maximum coverage age range of 95 to 121, provided the policy terms are met and premiums are paid. This type of insurance typically includes a cash value component, which contributes to its higher premiums compared to term life insurance.
Permanent life insurance comes in two main forms: whole life insurance and universal life insurance, with subtypes such as variable universal life insurance and equity-indexed universal life. Because it can offer lifelong coverage and accumulates cash value, permanent life insurance is generally more expensive. Still, it may offer peace of mind that your loved ones will be financially supported after your death.
PROS
-
Cash value component: This product has a cash value feature that accumulates money that you can access through policy loans or withdrawals.
Lifetime coverage: Remains in effect for your entire life, up to the maximum coverage age (95-121), under most circumstances.
CONS
-
Higher premiums: Typically much more expensive than term life insurance.
-
Lower cash value interest rate: The interest rate earned on the cash value component is often less than what can be earned with investment vehicles.
Guaranteed acceptance whole life insurance for seniors (Final expense insurance)
Guaranteed acceptance whole life, sometimes called guaranteed issue whole life or final expense insurance, is a whole life policy for which coverage generally cannot be denied as long as you meet the eligible age requirements. Coverage amounts are low, usually between $10,000 to $25,000, and are often used to cover funeral expenses such as headstones and funeral home fees.
PROS
-
No medical exam required
Coverage typically cannot be denied if between ages 50 and 80
CONS
-
Premium may be high for the level of coverage you’re receiving
-
May have a waiting period on death benefits for the first two years
-
Low level of coverage
How to choose the best senior life insurance policy for you
Seniors generally have different priorities than other age groups. They may be paying off debts and phasing into retirement, helping children and grandchildren with their finances or preparing for end-of-life costs. Before purchasing life insurance, it may be helpful to understand what factors you might need to consider at various ages.
Life insurance for seniors over 60
In your 60s, you may still be working and thinking about retirement. This period is crucial for ensuring your life insurance is in place, as premiums are generally lower the younger you are. A key consideration during this time is the potential loss of group life insurance coverage once you retire. If you've relied solely on your employer's group life insurance, it's important to secure an individual policy to maintain financial stability for your loved ones.
Securing over 60 life insurance can provide multiple benefits. It can replace your lost income, ensuring that your spouse or other dependents are financially supported if you pass away suddenly. Additionally, if you have or anticipate having children or grandchildren, life insurance can allow you to leave a financial gift for them. Moreover, it can cover any remaining debts, funeral costs and provide a financial legacy for your heirs, helping ensure they are well taken care of.
Life insurance for seniors over 70
If you are in your 70s, you may be well into retirement. If you are retired, replacing lost income for your spouse or loved ones may not be a factor when shopping for life insurance. However, consider what your family members will be left with when you are gone. Are you still paying off a mortgage? Do you have any other debt? Do you have enough savings for your loved ones to pay for your funeral expenses and other end-of-life costs? Life insurance may help ease the financial burden of your death for your loved ones, as well as potentially leave a financial gift for them when you are gone.
Life insurance for seniors over 80
If you are 80 or older, your life insurance options may be limited. You may be considering all the same life insurance factors that you did in your 70s, but if you did not obtain insurance at a younger age, you may have fewer choices than you would have earlier in life. A final expense policy may be the best option to obtain coverage, although the death benefit may be low and the premiums may be high. If you're having trouble finding the coverage you need, it may be helpful to speak with a licensed insurance agent or financial professional about your options.
How much is life insurance for seniors?
Several factors contribute to the cost of a life insurance policy, with age, health history, gender and lifestyle being the main determinants. Typically, younger individuals pay less for life insurance than older individuals. Additionally, healthy individuals usually pay less for life insurance compared to those with pre-existing health conditions or those who smoke.
When considering senior life insurance products, it’s important to remember that term life insurance is typically less expensive than, say, a whole life or universal life policy. However, costs will increase with age regardless of policy type. Medically underwritten policies are highly personalized since individual health factors significantly impact the premium. Conversely, the cost of policies like final expense or guaranteed acceptance, which are not medically underwritten, will not vary greatly in price but will generally be higher due to the insurer taking on the risk of unknown health status.
Seniors should carefully weigh the pros and cons of purchasing life insurance, especially considering how significantly age impacts pricing. For those whose primary concern is leaving money for end-of-life expenses, it might be worth considering putting money into a savings vehicle instead of purchasing a costly life insurance policy.
Before purchasing life insurance, it’s advisable to shop around and get quotes from multiple life insurance companies to find the best option for your specific needs. Consulting with a financial advisor can also help in making an informed decision tailored to your financial goals and situation.
Frequently asked questions
Written byAshlyn BrooksWriter II, InsuranceAshlyn Brooks is a finance writer with more than half a decade of experience, known for her knowledge in areas such as taxes, insurance, investing, retirement, finance news, and banking products.
