Best Life Insurance for Seniors in September 2023

Seniors often seek life insurance to secure their family's financial future. However, compared to younger individuals, they may encounter a different buying process, including higher premiums and more stringent health evaluations. With a MoneyGeek score of 93, Allstate provides the best term life insurance for seniors at an average monthly cost of $176 for a 10-year, $250,000 policy.

Allstate is the top choice for term life insurance for seniors based on its MoneyGeek score of 93. With an average monthly cost of $176 for a 10-year, $250,000 policy, it offers a blend of affordability and reliability. Term life insurance is popular among seniors for its straightforward coverage and lower premiums.

Protective stands out as the best choice for whole life insurance for seniors, with the highest MoneyGeek score of 97 in this category. Whole life insurance may be valuable to seniors for its lifetime coverage and cash value component, which can serve as an additional financial resource in retirement.

AAA is the leading choice for guaranteed life insurance for seniors, earning the highest MoneyGeek score of 96 in this category. Guaranteed life insurance offers coverage without the need for a medical exam, making it accessible for seniors with various health conditions.

State Farm leads the way in final expense life insurance, earning the highest MoneyGeek score of 96 in this category. Final expense insurance is designed to cover end-of-life costs such as funeral expenses and medical bills.

Protective stands out as MoneyGeek's pick for the best life insurance for customer satisfaction for seniors. Although it ties with GEICO and Mutual of Omaha in customer satisfaction scores, Protective leads with the highest overall MoneyGeek score of 92, making it a prime choice for customer-focused coverage.

Transamerica is the best choice for affordable life insurance for seniors, with an average monthly cost of $175.74 for a term life policy. While GEICO offers similar rates, Transamerica has a higher overall MoneyGeek score of 92, making it the go-to option for cost-effective coverage.

Whether seniors need a life insurance policy varies depending on individual circumstances. Life insurance can help beneficiaries cover funeral expenses, medical bills and even provide an inheritance. However, the need for such a policy may diminish if you've already set aside sufficient funds for these purposes or if your children are financially independent.

When deciding on life insurance in your later years, consider several factors. First, evaluate your financial obligations and how they would impact your family if you were no longer around. Second, consider the cost; premiums tend to be higher for seniors, and some policies may require medical exams.

Lastly, assess the type of coverage that suits your needs — term, whole or universal life insurance. Each has its own set of pros and cons, so weigh them carefully to make an informed decision.

Determining the right amount of life insurance for seniors involves an assessment of financial needs and obligations. A common strategy is the "DIME" method, which stands for debt, income, mortgage and education. Add up your debts, including medical bills and loans, the income you'd like to replace, any remaining mortgage balance and future educational expenses for grandchildren or others. The sum will give you a ballpark figure for the coverage you might need.

Another approach is the "income replacement" method, where you multiply your annual income by a specific number of years — often five to 10 — to provide a financial cushion for your loved ones. Keep in mind that seniors may also want to include potential medical expenses and funeral costs in their calculations. Given that premiums are generally higher for older individuals, balancing adequate coverage with affordability becomes key in purchasing the right amount of insurance.

Several factors influence the cost of life insurance for seniors, with age being a significant determinant. As you age, premiums typically rise to account for increased health risks.

For example, the average cost of a 10-year term policy with $250,000 in coverage is $91 per month for a 60-year-old. This cost jumps significantly to $243 per month for a 70-year-old.

Other factors that can impact pricing include your overall health, lifestyle choices like smoking, and the type of policy you choose. Consider these variables when shopping for a policy to ensure you get the most cost-effective coverage. The table below illustrates how the average cost of term life insurance varies by age and term length.

If you're a senior, term life insurance is often the best choice, especially if you're looking for straightforward coverage without bells and whistles. It provides coverage for a specific period, say 10 or 20 years, and pays out a death benefit to your beneficiaries if you pass away during that term. It's generally more affordable and easier to understand than other types.

However, you might also consider whole life insurance, which offers a death benefit and a cash value component that grows over time. This can be a good option if you're interested in an investment-like feature. Universal life insurance is another avenue, offering flexible premiums and the ability to adjust your death benefit.

Seniors might also consider the following types of life insurance:

• Guaranteed Universal Life: This hybrid policy offers the permanent coverage of whole life but with lower premiums, making it more budget-friendly while still providing a death benefit.
• Final Expense Insurance: Specifically designed to cover funeral and burial costs, this policy offers lower coverage amounts and is easier to qualify for, even with health issues.
• Guaranteed Issue Life Insurance: Ideal for policyholders with significant health concerns, this policy requires no medical exam but comes with higher premiums and lower coverage amounts.
• Indexed Universal Life: Indexed universal life offers flexible premiums and a cash value component tied to a market index, allowing for potential growth over time, which can be useful for estate planning.
• Joint Life Insurance: For couples looking to leave a financial legacy, this policy pays out upon the second partner's death and is often used for estate tax planning or charitable giving.

Each type has its merits and drawbacks, so consider your financial goals, the needs of your beneficiaries and your budget to make an informed decision.

When you're searching for a life insurance policy as a senior, there are several features to keep an eye on:

• Term Length or Duration: If you're considering term life insurance, the term should align with your financial planning horizon. Whole and universal life insurance offer lifelong coverage, which may be more suitable for long-term financial planning.
• Affordability: Premiums generally increase with age, so finding a policy that balances cost and coverage is beneficial. Fixed premiums, which don't increase over time, can be a valuable feature for budgeting.
• Underwriting Process: Some policies require a medical exam, while others offer simplified issue or guaranteed issue options that forgo the medical exam. These can be useful if you have pre-existing health conditions, but they usually come with higher premiums.
• Riders and Additional Features: Look for riders that may be beneficial, such as accelerated death benefits. This feature allows you to access a portion of the death benefit if you're diagnosed with a terminal illness.

By focusing on these features, you can tailor your life insurance policy to fit your personal needs and circumstances better.

The following frequently asked questions aim to guide you toward a more informed decision when purchasing the best life insurance for seniors.