A Guide to Buying Life Insurance for Seniors

A Guide to Buying Life Insurance for Seniors

A Guide to Buying Life Insurance for Seniors
Reading Time: 7 minutes

Because insurance companies have guidelines and qualifications to cover themselves—and to make as much money as possible—seniors may have a harder time buying a good life insurance policy than younger individuals.

Life insurance companies and policies favor those who are younger, making life insurance more expensive and therefore less accessible to senior citizens. Of course, if you’ve had your life insurance for years through an established company, you’re good to go; however, we’re guessing that’s not the reason you’re here.

If you’ve recently lost your life insurance due to a job change, unemployment, or retirement, the good news is that there are life insurance options out there for you to consider. Read on—we’ve got you covered (no pun intended).

Why Should Seniors Consider Life Insurance?

Some seniors may feel they have more than enough money in their savings to cover the necessary expenses for the final years of their lives. But costs add up quickly, and extra financial planning can cast a wide safety net for all involved.

Things like funeral expenses, medical debt, and mortgage debt can accumulate to the point that they are overwhelming. Life insurance acts as a buffer between the average person and these large end-of-life expenses that zap savings accounts and even retirement funds much faster than anticipated. Lack of life insurance can lead to an inability to absorb the necessary costs or even to extreme financial hardship, either for the person without life insurance or for their family.

Typically, most types of life insurance offer the following benefits:

  • Death and end-of-life coverage (i.e., funeral and burial expenses)
  • Safety and security for family members
  • Flexibility and customization (depending upon the type)
  • An accumulation of cash value.

In general, seniors with a good life insurance policy can enjoy greater peace of mind knowing that their expenses—and by extension, their loved ones—will be covered after their passing.

Let’s explore in more detail how life insurance can be beneficial for you.

Dependents Who Rely on You for Income

A dependent is someone who relies upon you as their main source of financial support. Typically, to qualify as a dependent, a person must be currently living off of your income and have lived off of your income for at least one fiscal year. They might make less than half of your income, or they might have no income of their own.

If you are a senior who has a spouse, you will likely designate your partner as the beneficiary of your life insurance policy. This means that, in the event of your passing, your spouse will receive funds from the life insurance company to help them cover any outstanding debt, pay for your funeral, and be provided with a modest living.

Dependents might also include children, whom parents might designate as beneficiaries. Whether your children are younger or grown, they can use your life insurance funds for anything from furthering their education to alleviating financial strain; however, to be beneficiaries, “children” are required to be 18 years of age or older, depending on the state.


Life insurance is particularly helpful for managing and paying off existing debt. It can provide significant financial help to your loved ones after you have passed.

First things first: the funds from life insurance policies, along with retirement savings and living trusts, are typically safe from creditors. Instead, all assets go to the beneficiary of the policy, who can use those funds to pay off your funeral and burial costs, medical expenses, or your remaining mortgage or other loans, for example.

One of the main reasons people buy life insurance is to mitigate the financial burden their loved ones might experience as a result of their passing. Taking this into account, it is a good idea to purchase a life insurance policy that lasts the length of your largest debt. For most people, that debt is a mortgage.

Concerns over Expenses

Although financial concerns may include paying off debt and providing income for your loved ones, a life insurance policy may also cover expenses such as college tuition, loans, and even credit card debt (although, again, these funds are safe from creditors unless a person chooses to use them to repay debt).

Basically, by purchasing a life insurance policy and designating a beneficiary, you can be assured that your loved one will have access to the financial assistance they need for a range of purposes—either to cover the expenses you’ve left behind or to cover their own.

Transfer Wealth to the Next Generation or a Spouse

Estate planning isn’t just for people who have a grand inheritance to pass on to their loved ones. If you want to leave your assets to the next generation, or to your spouse, whole life insurance—a specific type of insurance that we will explore further down—is one great way to accomplish this.

Alternatively, maybe you would like the money you’re leaving behind to support a charity, further a loved one’s education, or cover a loved one’s medical expenses. A whole life policy makes all of this possible. Whole life insurance tends to have higher initial premiums, but this can be worth it for the benefits of lifetime coverage, guaranteed cash value over time, and the ability to earn dividends.

What to Look for in a Senior Life Insurance Policy

There are dozens of life insurance options out there, so selecting one might feel like a daunting task. In light of this, we’ve compiled a few helpful tips for selecting the best policy for you!

As you shop for life insurance—and determine how much you need—you should take the following into account:

  • Your age
  • Your projected life expectancy
  • Your health (i.e., ongoing medical conditions or illnesses)
  • Your income
  • Your debts
  • Your assets.

The type of policy you end up with depends on many of these factors and your individual circumstances. If, for instance, you have a large inheritance to pass on to your loved ones, or you have little to no debt, a smaller life insurance policy should be sufficient.

Of course, it is also important that your policy is affordable for you. Do as much research as possible and collect life insurance quotes before settling on a policy. Meeting with a financial planner is also a good idea if you’re not sure what you can afford or how much you should spend on life insurance.

As a general rule, guaranteed issue life insurance is often a good fit for seniors. If your children are fully grown and financially stable, you may feel that it is not necessary to have an expensive life insurance policy. Still, a smaller policy can be a good idea to help cover funeral and burial-related expenses, which is where guaranteed issue life insurance comes into play.

Guaranteed issue life insurance is a type of whole life insurance that does not require applicants to answer questions about their health or take a medical exam. However, there are two downsides to this type of insurance:

  1. It comes with a waiting period, often from two to three years, during which time your beneficiary or beneficiaries will not receive the policy’s death benefit should you pass away;
  2. It comes with high premiums, usually because its policyholders are in poor health and are purchasing it as a last resort for their loved ones.

Still, if your health is declining and you do not have a life insurance policy in place, guaranteed issue life insurance could be a good option for ensuring your loved ones are covered after your passing. Of course, this assumes that you make it past the waiting period. 

What Is the Best Life Insurance for Seniors?

Now that we’ve covered sufficient ground about life insurance policies in general, let’s take a closer look at your specific options.

Term Life Insurance for Seniors

Term life insurance provides coverage at a fixed rate for a limited period of time. In other words, it guarantees payment of a stated death benefit if the policyholder dies within the designated term period, which may be anywhere from one to 30 years. If the policy expires and the policyholder has not died, coverage simply ends, and no one receives any benefits.

This type of life insurance is marked by the following characteristics:

  • Temporary protection
  • No cash value
  • Affordable
  • Renewable (in many cases).

You may also be able to convert your term life insurance policy into a permanent life insurance policy.

This is a good insurance option if the primary reason for your purchase is to protect your loved ones. Term life insurance does not allow you to withdraw funds for your own needs during retirement.

Whole Life Insurance for Seniors

Whole life insurance is more complex than term life insurance and a bit more costly. That’s because this type of insurance offers additional benefits that are useful to you while you are living—it doesn’t only protect your dependents.

What this means is that you can borrow against a whole life insurance account or exchange your policy for cash. However, if you don’t repay the loan with interest, you will reduce the death benefit for your loved ones, and you will be left without coverage.

Whole life insurance provides lifelong coverage and is characterized by the following:

  • Guaranteed death benefit
  • Steady, lifelong premiumGrowing cash value at a guaranteed rate.

This type of life insurance is a good option if you want a policy that accumulates in cash value or you wish to be eligible for annual dividends from your policy.

Final Expense Insurance for Seniors

Final expense insurance is a type of whole life insurance that does not expire, so long as you continue paying the premium. It is designed to cover medical expenses and funeral costs after you pass and typically includes the following features:

  • Cash value
    • No medical exam is required (though applicants may be required to answer health-related questions)
    • Fast approval
    • Affordable.

Final expense insurance may be a good option for you if you are primarily concerned with protecting your family from the burden of funeral or medical costs after you have passed. It is also more affordable than traditional whole life insurance.

How Much Will It Cost?

As you’ve probably gathered by now, the cost of your life insurance policy will depend on the type of life insurance you purchase. It will also depend on your age, health, gender, and the amount of coverage you select.

Outside of these factors, here is a general estimate for the three types of insurance we discussed:

  • Term life insurance: Healthy men of 70 years of age or older might pay $122–$435 per month; healthy women of the same age might pay $66–$194 for the same policy.
  • Whole life insurance: Healthy men of 70 years of age or older might pay $1,122–$2,089 per month; healthy women of the same age might pay $934–$1,081 for the same policy.
  • Final expense life insurance: Approximately $70–$120 per month, particularly if you are over 70 years of age or are in poor health.

Generally, these hefty monthly premiums amount to $200,000 or more in death benefits for your loved ones. Depending on your personal goals, health, and financial circumstances, the monthly premiums may be well worth the benefits.

Conclusion & Recommendation

If you are a senior citizen without life insurance and you have a spouse or dependents you worry about struggling after you pass, it is recommended that you purchase a policy to protect them when you are gone. Doing so will give you greater peace of mind, and it will help your loved ones manage the costs associated with your passing.

Keep in mind that the greater your age (and the poorer your health), the more expensive your monthly premiums will be. However, you should be able to find a policy that accommodates most of your personal and financial needs while accommodating your budget too!


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