Life Insurance for the Elderly: How to Find the Right Policy

Older couple prepping for dinner in a kitchen smiling.

As a senior, many of life’s biggest expenses—like raising kids and paying for their college education—may be behind you. However, insuring yourself can still provide important benefits for your family’s future, giving them financial security they may not otherwise have.

You might think life insurance for the elderly is either too hard to get or too expensive, but that’s not the case if you know where to look. Understanding your options can help you find affordable coverage that can give your loved ones a helping hand when they need it most. Here’s what to know.

Why You May Need Life Insurance as a Senior

Chances are, you may not need as much coverage now as in years past. But life insurance can still play an important role in your financial plan. Having a policy in place not only protects your family but may also help you manage expenses during your lifetime.

Your life insurance policy can potentially help with the following needs.

Paying for Final Expenses

Your life insurance policy payout can help ease the financial burden of final arrangements, including a burial or cremation. The death benefit typically pays out quickly, so your family may not need your estate settled before receiving funds.

Managing Outstanding Debts

Your loved ones can use the money from your policy to pay any outstanding debts you leave behind, including medical bills, mortgages, and car loans.

Covering Future Costs

If your family has money left from your policy after paying final expenses and debts, they can use the remaining funds to cover future expenses. This can be especially important if your spouse’s income will be reduced after you pass away.

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Providing Financial Flexibility

Depending on the type of coverage you buy, your policy may accumulate cash value you can access for your own financial needs. As your balance grows, you can use those funds for unexpected expenses, household repairs, or other costs.

Leaving a Legacy

When you purchase a life insurance policy and name a charity or house of worship as the beneficiaryyou can create an impact even after you’re gone.

Finding the Right Life Insurance for You

Life insurance for the elderly works similarly to other life insurance. However, some companies offer products designed for older adults, with coverage amounts that fit your unique needs. Typically, these offerings are available to adults up to age 85, depending on the state where you live.

Term insurance, which is in force for a specific number of years, is generally the most affordable coverage you can get. If you want financial protection that will last your entire lifetime, however, permanent coverage may be a better fit. These policies give you confidence that your beneficiaries will receive a payout, regardless of how long you live.

Weighing Your Options

When shopping for life insurance policies for seniors, you’ll likely notice that product terminology can vary. Some companies sell traditional whole life insurance for seniors, while others offer products called burial insurance or final expense insurance. Sometimes, but not always, these products offer the same basic features.

For example, you may find a final expense policy that’s essentially a whole life insurance product marketed toward older adults. Whole life offers a guaranteed death benefit as long as you pay the required premiums and the ability to build cash value you can access during your life. Your policy therefore provides a potential source of funds if you experience an unforeseen expense or a sudden loss of income. Not all burial or final expense policies have this component, so review the details to make sure you’re getting the features you want.

Considering Your Budget

Companies that focus on the senior life insurance market typically offer policy options to best match your budget and coverage needs. The premiums you pay may depend on many factors, including your age, sex, and the death benefit amount. Policies with a cash value feature typically cost more, but they allow you to tap into your policy’s balance with a loan or withdrawal when you need an extra source of cash.

Obtaining Life Insurance If You Have a Medical History

Insurers that offer traditional life insurance policies use your medical history as part of the underwriting process. That means you might pay higher premiums or be denied coverage altogether if you have ongoing health issues.

Guaranteed acceptance life insurance, on the other hand, doesn’t require you to have a medical exam or answer questions about your health. As a result, these policies are often a prime choice if you have less-than-perfect health but still want coverage that can protect your spouse or other loved ones.

Policies with guaranteed acceptance may have a limited benefit period—often two years from the purchase date—for nonaccidental deaths. Should you pass away from a nonaccidental cause during that period, your beneficiary typically receives the value of the premiums you paid plus a predetermined interest amount.

Regardless of the policy you choose, selecting the right insurance company can help make sure your heirs promptly receive your policy’s payout. In general, look for companies with a solid reputation for paying out claims and strong scores from the leading rating agencies: AM Best, Standard & Poor’s, Fitch, and Moody’s.

Financial Security from a Trusted Name

Obtaining life insurance as an older adult can be crucial if family members rely on your financial support. Your policy can help them manage any expenses they’ll have to pay when you pass on, providing solace during an already difficult time.

Curious to learn how life insurance could fit into your situation and meet your needs? Get your free quote today.

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Colonial Penn has specialized in making life insurance simple and accessible by offering it directly to consumers since 1957. Click here to learn more.

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