Life insurance is a necessary tool for all ages but especially crucial for seniors as they plan the next phase of their life. There are plenty of benefits to having this financial tool in place, from helping loved ones cover debts after you’re gone to covering your end-of-life wishes. So, what is the best life insurance for seniors? The answer depends on your current circumstances.
Term Life vs. Whole Life
It’s important to understand the two primary types of life insurance before diving into which is best for your given circumstances.
Term life insurance is a life insurance policy that is set for a certain length of time, like 10, 15, or 20 years.
Whole insurance is a permanent policy and covers a person’s entire life from the point of the effective date until death.
Life Insurance for Healthy Seniors
The healthier you are, the more flexibility you will have in your life insurance choices. Most experts advise that if you are below the age of 70 and have relatively good health, you’ll have the ability (and leverage) to choose a policy that works best for you. This can include a term life or whole life insurance policy that offers great rates.
If you’re healthy, you may be able to secure a whole policy with excellent rates that will cover your death, whether in 10 years or 30. If a whole policy doesn’t make the most sense for your situation, you may find that a longer-term policy offers the flexibility you need with the rates you love.
Life Insurance for Seniors in Poor Health
For older seniors or those in poor health, the affordable options for term life and whole life insurance begin to fall off. The rates will increase with the increased risk factors you have, including pre-existing medical conditions.
It’s not uncommon for someone with a health complication to be flat out denied insurance by popular life insurance companies. If you do happen to qualify, you can expect a rate hike. Because of this, a term policy tends to be best as most insurance companies won’t want to insure you for more than a short-term plan, such as ten years.
The problem with purchasing life insurance later in life, particularly after 70 or with pre-existing conditions, is that a fixed-term policy may expire before the end of life.
If the policy were for, say, ten years and you purchased at the age of 75, you’ll find it significantly more difficult to find any life insurance policy at 85.
Tips to Get the Best Life Insurance as a Senior
Finding life insurance as a senior can be a balancing act between getting an affordable plan with the right longevity.
Don’t wait to look for a life insurance policy. The earlier and healthier you are, the better chances you have to get approved and receive the best rates.
By delaying your search, you may need to go through medical exams or face flat-out rejections from life insurance companies that don’t want to assume the additional risks of representing you.
It’s important not to hold on too rigidly to your preferred life insurance terms. Whether you go into the life insurance search committed to a term or whole policy, avoid turning down offers simply because they don’t match perfectly with what you thought you wanted.
If being approved for any form of life insurance means changing your desires, consider if that is worthwhile to have coverage at all.
Opt for a Guaranteed Acceptance
While not the best life insurance circumstances, a guaranteed acceptance company may be the only way to obtain coverage.
The thing to note with these companies is that they generally have higher rates and lower benefit amounts. Consider whether the benefit of a guaranteed acceptance insurance policy is worthwhile to help your family after your death.
The Bottom Line
Finding the best life insurance policy as a senior will depend on your health and age during the time of your search. You’ll want to start earlier for the best results when you present the least amount of risk. With that being said, there are options for seniors of all backgrounds, including with varying health ailments and regardless of age. Be sure to speak honestly and openly with all your life insurance company options to find the best policy for your needs.