Best Life Insurance for Seniors
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UPDATED: Jul 5, 2022
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Whoever said all good things improve with age never tried to buy life insurance after age 65.
It’s tough finding quality and affordable coverage, especially when you need a larger policy.
Older life insurance shoppers also know a new policy’s premiums would increase with each passing year. They feel the cost of time passing, and this feeling can complicate the process of finding the right coverage.
As we help seniors shop for the right life insurance coverage, a few companies consistently perform well in quote comparisons.
Best Life Insurance Policies for Seniors
These are the top providers of the best life insurance for seniors in 2020:
- American National: Best For Variety of Products
- Mutual of Omaha: Best Overall
- New York Life: Best for Smaller Policies
- Banner Life: Best for Flexibility
- State Farm: Best for Customer Service
- Haven Life: Best for Term
Best for Product Options
American National life insurance is a great option for seniors:
- Competitive Rates and Strong Financial Ratings
- Seniors can get up to $150,000 with no medical exam
- ANICO offers a guaranteed issue policy for customers between the ages of 50 and 80
Mutual of Omaha
There’s a lot to like about Mutual of Omaha:
- Seniors up to age 74 can still buy term life coverage.
- Seniors can get up to $100,000 with no medical exam.
- Mutual of Omaha’s guaranteed universal coverage accrues just enough cash value to build in some flexibility.
You can buy coverage online or by working with an agent. Mutual of Omaha’s coverage has earned an A+ rating from A.M. Best.
New York Life
Best for Smaller Policies
Most seniors shop for guaranteed universal coverage. But not all seniors need a large amount of coverage. In these cases we often recommend New York Life whose guaranteed universal policies start with $25,000 in coverage.
You could also get guaranteed universal coverage without a medical exam if you’re 85 or younger.
New York Life has earned an A++ rating, A.M. Best’s top score.
Best for Flexibility
With Banner Life you could pay off your guaranteed universal policy while you’re still working — and then keep the coverage for the rest of your life.
This kind of flexibility is rare. Banner also has flexible underwriting terms which can lead to lower-than-average rates for seniors with health conditions.
You won’t get a lot of extras with Banner, which sells insurance in every state except New York. But you will get a good value on simple coverage.
Best for Customer Service
We put State Farm on this list because shopping online isn’t for everyone. If you’d prefer to have a conversation with an agent face to face, you can find a State Farm office in your neighborhood.
As for its policy options, State Farm stands out with its limited pay coverage which you could pay off within 10 or 15 years and keep the rest of your life. State Farm’s coverage has earned an A++ rating, too.
As a side note: If you’d like to discuss policies from a variety of companies face to face with one agent, look for an independent agent in your area. Independent life insurance agents can help you find the right policy at the right price because they work with so many insurers.
Best for Term
In most cases we wouldn’t recommend term life coverage for seniors, especially seniors over 65. But if you’re younger than 60 and want term coverage, Haven Life makes buying easier.
The entire shopping process — except for your health exam — takes place online. Coverage comes from MassMutual, another A++ rated carrier.
We also chose Haven because policyholders can easily manage their coverage online. Changing your beneficiary, for example, would be quick and easy.
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A Step-by-Step Guide to Life Insurance for Seniors
Before getting started, here’s one piece of preliminary advice: Relax. Don’t let your fear of increased premiums rush you into making a poor decision. The wrong policy could cost you even more later.
Here are the steps to finding the right life insurance as a senior:
- Identify Why You Need Coverage
- Determine How Much Coverage You Need
- Identify Your Monthly Budget for Premiums
- Decide Which Kind of Policy Best Fits Your Needs & Budget
- Start Shopping for Coverage
Step 1: Why Do You Need Life Insurance?
Most young and middle-aged adults buy coverage to replace their income if they died prematurely and left their families without enough money. Since premiums are so much lower for younger shoppers, they can afford to replace their income for 10 years or more with a term life insurance policy.
For most seniors, this phase of life has passed. Some seniors do not earn income from work, and their assets could continue supporting their spouses after death. With their children grown and their homes paid off, there’s no need for $1 million in life insurance.
These seniors usually need a final expense policy, and most shoppers can afford to buy $15,000 or $25,000 in coverage. If this is you, skip to Step 5 and start shopping for final expense insurance.
Or, ask yourself whether you need insurance at all. Could you set aside enough money in a special account to cover final expenses or your debts? If so, you’re self-insured and don’t need a policy.
But not every life plays out so neatly.
- What if you’re raising your grandchildren?
- What if you have a special needs child who’s now an adult?
- What if you lost your retirement when your employer mismanaged your portfolio 10 years ago?
- What if you’d like to leave a large donation to a foundation?
- What if you want life insurance to pay off your estate taxes?
- What if you didn’t plan for retirement and depend on income from work?
In cases like these, you need more than a simple, final expense policy. Let’s move on to Step 2 to find out exactly what you do need.
Step 2: How Much Coverage Do You Need?
When people you care about depend on you financially, you want enough life insurance coverage to make life easier on them when you die. This is true whether you’re 35 or 75. So how much life insurance coverage would your family need?
To answer this question, think about your income right now. Ideally, your life insurance would replace your income for 5 to 10 years.
For many seniors with dependents, $250,000 could be enough coverage to pay off some debts and give your loved ones more financial stability. In a high cost of living city, you may be thinking about $500,000.
Seniors who want to leave money for taxes, pay off small debts, or leave behind a legacy gift already have a good sum in mind.
Write down this number — this amount of money you’d need your life insurance to pay — as you move on to Step 3.
Step 3: What’s Your Monthly Budget for Premiums?
How much can you afford to spend, month after month, on life insurance premiums?
Here’s a better question: How much should you spend? Should you reconsider your priorities to make more room in your budget for life insurance premiums? Or should you put that money into savings instead?
Life insurance lets you leverage a larger amount of money in exchange for paying a smaller amount each month. Coming up with $200 a month in exchange for your family getting $50,000 when you die seems like a good deal.
But would you be willing to pay $1,000 a month in exchange for $12,000 in coverage? Probably not. You could just save that $1,000 every month for a year instead and insure yourself.
Entering the shopping process knowing how much you can afford — and how much you’re willing to spend each month — will make the shopping process simpler.
Step 4: What Kind of Policy Do You Need?
If you’re not yet 65 years old, you can still buy term life coverage from most leading providers. Term won’t be your best option in most cases, though.
Let’s look at your choices:
- Term Life Insurance: These temporary policies offer simple coverage with no frills. Many seniors can still buy a 10-year policy. But when this coverage expires, renewing it would cost significantly more. Renewing may not be possible. Get term life only if you need coverage temporarily.
- Permanent Life Insurance: A whole life policy will last the rest of your life, but these policies cost significantly more compared to term life. Most permanent policies accrue additional cash value. Some permanent policies have extra flexibility — universal life, especially. But a large coverage amount would cost too much for most seniors.
- Guaranteed Universal Life Insurance: We recommend a lot of guaranteed universal policies to seniors. GUL provides a nice in-between: a larger coverage amount but also permanent-style coverage. Ordinarily, your policy wouldn’t accrue its own cash value, but you’ll pay lower premiums compared with traditional permanent insurance.
- Burial or Final Expense Life Insurance: I mentioned this coverage above. Seniors younger than 85 can usually find efficient ways to provide final expenses or small debt repayment.
Step 5: Begin the Shopping Process
This step should be easy when you’ve completed the previous four steps because you already have a good idea what you need and how much you can pay.
You could get quotes for the coverage you need online. If the coverage you need does not fit within your budget, consider adjusting your policy options.
Here are some cost facts to consider as you build coverage:
- More Coverage Costs More: Larger coverage amounts drive up premiums. Buy just enough coverage and not too much.
- No-Exam Could Cost More: You can find plenty of options for no-exam life insurance but if you’re in good health, you could save by getting the medical exam.
- Save By Skipping Extra Features: Permanent insurance such as variable life, universal life, or regular whole life have investment components. If you don’t need this feature, stick with guaranteed universal or possibly term life.
- Extra Riders Drive Up Costs: Some of the best riders already come along with your coverage for free: accelerated death benefits in case you receive a terminal diagnosis, for example. You’ll have to pay extra for many other riders. Unless you really need them, save by opting out.
Best Senior Life Insurance Policies By Age
We use the label seniors to describe shoppers in their late 50s and older. This is convenient terminology, but in reality a senior who is 55 may have much different needs than a senior who is 85 or older.
So here is our decade-by-decade guide to life insurance for seniors.
Over Age 50
When you are searching for life insurance over age 50, you’re a real hybrid. You can still get $1 million in term life, and if you still have children at home you may want to consider term, though we’d suggest a shorter term such as 15 years.
You’re also at a good age to consider true permanent life insurance such as universal life. The cash value this policy accrues will provide some nice flexibility when you’re retired. With universal life you could adjust your coverage amount or premiums to match your needs later.
It’s also a great time to consider a pay-early guaranteed universal policy. You could pay off your premiums with a Banner Life or State Farm policy and keep the coverage the rest of your life. This kind of coverage lets you front-load your insurance costs while you’re working instead of needing to pay premiums during retirement.
Over Age 60
Most companies will sell you a term policy until you reach age 65. Some will continue through age 70. A few go even higher. But, we’d advise against buying term coverage in your 60s.
Instead, shop for a guaranteed universal policy which has the permanence of whole life but affordability closer to term.
You should buy term life only if there’s no way you’d plan to renew the coverage when it expires. If, for example, you have only eight years left on the mortgage and you’re buying 10 years of coverage specifically to protect that investment.
You could also consider universal coverage which has an investment component. But you’d spend hundreds of dollars a month in premiums, assuming you’re healthy.
Guaranteed universal is usually the way to go when you’re over 60 — especially when you’re 65 or older.
Over Age 70
At this stage in life, buying any type of new coverage with a large death benefit could be cost prohibitive. Term is no longer an option with most carriers; whole could cost $500 a month or more.
Most people in their 70s no longer need a large life insurance payout. A final expense policy can provide $25,000 or $50,000 with low premiums.
You could also get guaranteed issue coverage which does not consider your health, but coverage amounts will be low and premiums will be expensive. Plus, if you died within the first three years, your beneficiary couldn’t claim the full death benefit because of the built-in waiting period.
If you do still need a larger coverage amount, look for guaranteed universal coverage.
Over Age 80
For $150 to $200 a month you should be able to buy a final expense life insurance policy that could pay out $25,000 to $50,000. This money could provide some liquidity as your heirs dissolve your estate.
Burial expenses normally range around $8,000 to $10,000, so this kind of coverage would also provide for this need.
You can find other options besides final expense insurance, but the ratio between premiums and death benefit would render these plans counterproductive.
Early Shopping Pays Off If You’re a Senior Looking for Life Insurance
As you age, your life insurance options diminish and your premiums increase. This is built into the fabric of life insurance which uses risk of mortality as its standard of measure.
You can avoid some of the challenges seniors face by locking in your coverage before you retire. Shopping early lets you front-load your premiums so you can worry less about keeping them active during retirement.
Plus, shopping earlier gives your permanent insurance time to accrue enough cash value to help you during retirement.
But, if you are a senior who needs life insurance, use our 5-step approach above and reach out in the comments below if you need help.
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