As a senior it can seem difficult to find an affordable life insurance policy, leaving many people to feel as though they “waited too long” to get life insurance.
However, this is simply not true.
In a way, your age can work to your advantage when purchasing life insurance as a senior. Because you likely have less financial dependents and debt, you likely need less life insurance coverage than people still building a family.
Burial insurance (also called final expense insurance) for seniors offers a cheap permanent life insurance alternative to more expensive term options.
It covers remaining debts and burial expenses in the event of your death, providing financial stability for remaining family members.
What Type of Life Insurance Policy is Best for Seniors?
There are many types of life insurance policies out there, but they all fall under two types:
Term Life Insurance
These are offered in terms, typically 10 years in length. You have to renew at the end of each term length but the plus side is your premiums are lower than permanent policies and the rates typically remain the same for the duration of your term.
Burial insurance falls under this category too and is often much less, requires no medical exam, and is only meant to cover your burial expenses.
Term life insurance can be renewed as needed, changed or modified into whole life insurance. You will pay higher fees for the conversion convenience and a higher premium.
Permanent Life Insurance
There are many varieties of permanent life insurance. Whole life insurance gives things like a guaranteed death benefit.
This means that if you pass away immediately after getting the policy, they still pay out the benefit rather than only paying out your paid premiums to date.
Universal plans might gain cash value because their value is tied to a form of investment; the company in question might have a stock portfolio and if the portfolio performs well, your total life insurance amount increases as a result, and vice versa.
What is Burial Insurance, and How Much Do I Need?
Burial insurance is a cheaper, more limited form of life insurance. This coverage is, as the name suggests, just meant to be for your burial. The amounts are offered in increments of $5,000 and range on average between $5,000 and $25,000. It is a no-frills insurance policy designed to alleviate the anxiety and grief of planning a funeral for your family.
Burial insurance is only meant to be enough to cover the costs of a funeral or cremation. So, if you are trying to determine whether burial insurance provides adequate coverage you have to consider your current situation:
If you answered “yes” to any of these, then chances are you will want a life insurance policy that provides enough money to cover more than your funeral costs.
In this case, a term or permanent life insurance policy is better suited to your financial needs.
If you answered “no” to any of these, and your only financial requirement would be the costs of your funeral, then burial insurance might be the perfect solution.
You could make a pre-payment funeral plan agreement with a specific funeral home. However, you would be locked into a contract, you won’t get a refund and if you move or change your mind you would have to start the process all over.
With the option of pre-paying for your funeral, know that the funeral director would control the funds, not you. Know what you are getting into.
Term Life Insurance for Over 65 Years Old
If you are applying for term life insurance for over 65 years old, you might only qualify for a limited number of term policies. Companies that offer 10, 15, 20, and 30 year policies might only offer 10 or 15 year policies to applicants who are older than 75.
The chart below provides an example of average annual costs for term policies for non-smoking seniors living in California which increase with age and the term length:
|Gender||Age||Term Length||Monthly Cost|
Burial Insurance for Over 65 Years Old
Let’s compare burial life insurance rates for seniors age 65 and older with that of term life now.
As you can see from the chart above, burial insurance for seniors offers affordable whole life insurance in small amounts that does not build cash value.
For many people over 65, burial insurance is an affordable, and practical alternative to whole life and term life insurance.
How Much Does Health Affect Life Insurance Rates?
Health plays a big role in your policy cost, regardless of age. Age is one factor, because it is indicative of risk; the older you are, the sooner you will likely pass away.
Bear in mind that many burial insurance policies are cheaper and carry less financial risk for the companies issuing them. The trade is that most do not require a medical exam nor do they ask any medical questions on your application.
That may sound appealing for some, especially those with a pre-existing condition. But those who are in ideal health, above average, with no health conditions might benefit more from taking an exam and getting a term or permanent policy based on the results of that exam.
To show the impact of health on life insurance rates, we changed the health of the applicant to a “smoker” with below average health and below average answers to their application exam, the table below shows you $500,000 term life insurance rates for males and females over 10 and 15 year terms:
|Gender||Age||Term Length||Monthly Cost|
Remember that the information listed above is a sample, but does not represent every state or every individual situation.
When you compare these whole life insurance rates to that of a burial insurance policy for seniors in the same age groups, in the chart above, you begin to see why burial insurance is an affordable option for seniors.
As you get older, your risk increases and your dependents decrease. For that reason, we recommend burial insurance for seniors 65 and over.
Where can you find the best burial life insurance for seniors? Look no further.
The Best Burial Insurance for Seniors
What all that in mind, obviously the best policy is the one that best suits your needs, your budget, and your financial situation.
However, on average, for seniors, the best policy is a Guaranteed Universal Life (which for many companies, counts as their burial life insurance policy).
This is a hybrid policy of sorts and it provides a guaranteed death benefit that whole life insurance policies have combined with the affordable premiums that term life insurance offers.
So which companies offer this?
|Company||Why Choose Them|
|New York Life||
|Mutual of Omaha||
Tips for Getting Cheap Life Insurance as a Senior
No matter what option you want, or what your age, you should follow these tips to find the best possible price for your life insurance:
1. Do your homework
There are many websites today that let you look up a litany of quotes online in a matter of minutes. All you need do is fill out some basic information about yourself and your health, then you get a list.
You can compare them side by side the same way you would compare a list of potential flights for an upcoming trip. Look at the quotes carefully and assess which policies are most appealing.
Do not forget to read reviews about the companies too. Just because one offers the lowest price for seniors does not mean it has the best financial history or customer service.
Bad financial history means less of a guarantee that your benefit gets paid out upon your passing and bad customer service makes everything more difficult.
2. Try senior-only insurance companies
Most insurance companies want to limit their risk, so they will set up a cut off for age. They might not, for example, take applications for anyone over the age of 70 or 80.
If you find a firm that specializes in senior-only life insurance policies, they will have better premiums and fairer terms more often than not.
3. Work with an independent life insurance agent
A good life insurance agent will be able to give you a multitude of companies from which to choose. We work with over 20+ companies to provide the best burial life insurance products on the market for seniors.
We find the best life insurance options, companies and rates for your specific situation. Give us a call today, or use our online quoting engine to begin comparing the best burial insurance rates for seniors.