Finding Affordable Life Insurance for Seniors
Key Takeaways
- Life insurance for seniors can help cover funeral expenses, outstanding debts, estate planning, and financial support for dependents.
- Options include term life (affordable, time-limited), final expense (small policies for end-of-life costs), whole and universal life (lifelong coverage with cash value), and simplified or guaranteed issue (easier approval but higher costs).
- Seniors may face higher premiums, limited policy options, and stricter eligibility due to age and health conditions.
- Coverage needs vary—some may no longer need income replacement but may want funds for medical bills, debts, or charitable donations.
- Comparing policies and considering factors like health, budget, and financial goals can help find the best life insurance option.
Life insurance provides a financial safety net for the insured’s loved ones, which is particularly important for older adults — even if their children have grown up and become financially independent. That’s because life insurance helps cover final expenses, such as funeral costs, and pay off outstanding debts, such as mortgages and credit cards.
However, life insurance costs tend to increase as you age if you have not already purchased a policy. Here’s how to find affordable life insurance for seniors and older adults.
Life Insurance Over 65: Is It Worth It?
Many life insurance companies impose age restrictions on certain policy types. For example, individuals in their 70s may struggle to find affordable life insurance policies with terms exceeding 10 years, whereas someone in their 50s or 60s might have an easier time finding cost-effective policies with 20-year or even 30-year terms.
Despite potentially having limited options, seniors can glean many benefits from life insurance:
- Long-term care for dependents and grandchildren. Older adults may have children or grandchildren who depend on them for financial support. Life insurance can help these seniors by providing support after the policyholder passes.
- Funeral expenses. In 2023, the national median cost of a funeral exceeded $7,800. Life insurance can help pay for those costs and other end-of-life expenses.
- Collateral or proof to creditors for loans. If you need a loan as an older adult, your life insurance policy might serve as collateral or proof to a creditor so you can get better terms on a loan.
- Paying off outstanding debts. If you pass away before settling certain debts, such as a mortgage or credit card, life insurance can help your loved ones repay those debts.
- Estate planning. A life insurance policy’s death benefit can help loved ones pay estate taxes and reduce complications when it comes to passing down the insured’s estate.
- Contributing to charity. You can name a charity as a beneficiary on your life insurance policy to support a cause that’s important to you.
Secure your family’s future with Final Expense Life Insurance.
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Life Insurance Types To Consider
| Permanent Life Insurance Type | Cash Value Growth Method | Medical Exam Generally Needed? | Living Benefits? |
| Term Life Insurance | No | Yes | No |
| Final Expense Insurance | Standard | No | Not always |
| Whole Life Insurance | Standard | Yes | Yes |
| Universal Life Insurance | Standard or Interest rate based on a stock market index. | Yes | Yes |
| Simplified Issue Life Insurance | Conservative-yield | No | Not always |
| Guaranteed Issue Life Insurance | Conservative-yield | No | Not always |
Term Life Insurance
Term life insurance policies provide coverage for a set period. These terms usually range from 10 to 30 years, though shorter-term policies are more common among seniors. Term-specific policies only pay out their death benefit if the insured person passes away during the term. Term life insurance policies tend to have lower premium prices because they expire after a set period and do not accumulate cash value. However, some insurers may not offer term policies for those over a certain age.
Final Expense Life Insurance
Final expense life insurance covers end-of-life costs, which may include funeral expenses and medical bills. Because final expense life insurance policies tend to be smaller, they’re often more affordable for older adults. This type of insurance works well for seniors who want a cost-effective policy that will remove the burden of end-of-life costs from their loved ones.
Whole Life Insurance
Whole life insurance is a type of permanent life insurance, meaning it is not limited by a set time period like term life insurance. Instead, it lasts for the policyholder’s entire life as long as they keep up with premium payments. Plus, a portion of the premiums paid into a whole life insurance policy build up as cash value, which the insured can access by making withdrawals or taking out loans during their lifetime. However, doing so may reduce the ultimate death benefit. Whole life insurance tends to cost more than term insurance.
Universal Life Insurance
Universal life insurance is another type of permanent life insurance. Similar to whole life insurance, a universal policy provides lifelong coverage and builds cash value over time. However, universal life insurance is generally more flexible than whole life insurance, offering adjustable premiums and death benefits in case the insured’s financial needs change over time.
Simplified Issue Life Insurance
Most types of life insurance consider the insured person’s age, health status, and more when determining premium prices and coverage terms. Simplified-issue life insurance does not take all of these factors into account. For example, many of these policy types skip full medical exams in favor of a health questionnaire for faster, easier approval. However, simplified-issue insurance tends to offer lower coverage amounts and charge higher premium prices for the ease of enrollment.
Guaranteed Issue Life Insurance
Similar to simplified issue life insurance, guaranteed issue life insurance does not require medical exams, and some may not require health questionnaires. Insurers guarantee coverage to individuals who purchase these policies, providing an alternative to those who might otherwise struggle to find life insurance due to their age or health status. That said, guaranteed issue life insurance policies usually impose age limits as well — usually between 50 and 85 years old.
Considerations When Buying Life Insurance After Retirement
When purchasing life insurance, older individuals must consider a few factors that aren’t as relevant for working-age adults:
- Life expectancy. As you age, your life expectancy decreases, meaning insurance companies might see you as a higher-risk customer. Insurers tend to charge higher premium prices for higher-risk individuals. This can make it more difficult to find a life insurance policy, especially at an affordable price point.
- Health status. Older adults are more likely to have diabetes, heart disease, high blood pressure, and other pre-existing health conditions. Similar to life expectancy, a pre-existing condition could mark you as a higher-risk individual, making it more challenging to find an affordable life insurance policy.
- Limited options. Seniors may have fewer options when it comes to types of life insurance. For example, a 20- or 30-year term policy may be harder to find for someone in their 70s.
- Coverage offerings. Seniors often have different needs for life insurance coverage compared to younger individuals. For example, if someone is long retired, they may not require income replacement; if they have paid off their mortgage, they might not need a death benefit large enough to repay that type of loan. However, many seniors still want enough coverage to pay for end-of-life expenses and medical costs.
Balancing Needs for Affordable Life Insurance for Seniors
For seniors, the most affordable types of life insurance tend to be term, final expense, whole, simplified issue, and guaranteed issue because they often come with more restrictive coverage terms or lower coverage amounts. To choose the right type of affordable life insurance as an older adult, you must consider what you want your policy to cover and how long you want the coverage to last. Here’s a breakdown of the best types of affordable life insurance for seniors.
Life Insurance Type | Best for… |
Term life insurance | Term life insurance best serves older adults in good health looking to leave behind a large death benefit to support their loved ones or a cause that’s important to them. These policies do not build cash value or offer living benefits. |
Final expense life insurance | Final expense life insurance is a good option for seniors who want a lower-cost option and don’t necessarily need a large death benefit, as coverage for these policies is limited to end-of-life expenses. |
Whole life insurance | Whole life insurance appeals to seniors who may want to access their benefits during their lifetime. This type of permanent life insurance builds cash value and may allow the insured to make withdrawals or take out loans to exercise that value. Whole life insurance policies with smaller death benefits tend to be more affordable, however. |
Simplified issue life insurance | Seniors in decent health who want to ensure they have life insurance coverage without going through full medical underwriting may benefit from a simplified issue policy. This type of insurance does not require medical exams or full underwriting, but coverage may be relatively limited. |
Guaranteed issue life insurance | Older individuals with health conditions may benefit from guaranteed issue life insurance, which guarantees coverage for people who may otherwise struggle to get approved for a life insurance policy. Note that many final expense life insurance policies are also guaranteed issue. |
Secure your family’s future with Final Expense Life Insurance.
Contact GoHealth to find coverage that fits your needs.
Mon – Fri, 8 a.m. – 6 p.m. CT | TTY: 711
Putting It All Together
Finding affordable life insurance can be challenging for seniors since older individuals are more likely to be considered “high-risk” by insurance companies. However, several types of life insurance — including term, whole, and final expense — can be cost-effective for seniors. If you’re shopping for life insurance later in life, make sure to consider each policy’s premium price, coverage term, death benefit, and cash value options, if applicable.
To make sure you choose the best type of life insurance for you and your loved ones, consider working with a licensed insurance agent or broker to get an expert’s perspective and guidance.
Sources
Statistics. National Funeral Directors Association.