How Much Life Insurance Coverage Do You Need as a Senior?

Written by Jeff Root

You may wonder if life insurance is even worth buying once you pass 60, 70, or 80 years old. Isn’t it best to buy life insurance when you are young? Am I too old to apply for life insurance? How much life insurance coverage do I need as a senior anyway?

The short answer is you are never really too old to get some type of life insurance coverage. It’s always a good idea to buy life insurance even if you are 60, 70, or 80 years old.

The reasons for buying life insurance as a senior may be different than buying a life insurance policy during your youth. However, the peace of mind and financial importance of doing so remain the same no matter what age you are.

How Much Life Insurance Coverage Do You Need?

The U.S. Census Bureau reports the average life expectancy in the United States is 79 years old. Other reports indicate the U.S. senior population will continue to grow through the year 2050 as baby boomers enter their golden years.

This means there are more seniors, like yourself, shopping for life insurance than ever before. Seniors are staying active and in good health much longer than previous generations. Life insurance companies recognize the evolving population and the corresponding need to insure older men and women.

Reasons To Buy Life Insurance As A Senior

Is there anything useful that could come from you buying a life insurance policy as a senior? How much life insurance do you need as a senior? There are several points to consider.

Is there a survivor benefit on your pension?

If not, then the monthly pension will stop once you pass away. This means your spouse will lose out on that monthly income. How will he/she make up for it?

A life insurance policy will pay-out a tax free lump sum payment your spouse can use to supplement your missing income.

Will your estate be subject to taxes when you pass away?

If so, how will your loved ones manage that tax bill? Some families end-up selling the family home or digging into their own retirement funds/savings to pay the IRS.

By leaving a life insurance benefit behind, your family will be able to use those funds to easily settle your estate. Plus the death benefit is tax free for your beneficiary so they will not have to claim it as part of your estate or a portion of their own annual income.

Do you have enough money set aside for final expenses?

If not, your loved ones will need to come up with $8,000 to $10,000 just to cover basic funeral and burial services. Cremation usually costs around $3,000 to $5,000. If you don’t leave any final expense cash behind, how will your family pay for your services?

Will your children or spouse need to use a credit card or withdraw the money from their own savings accounts? Those closest to you will really appreciate your pre-planning.  

Do you still have a mortgage, car note, or credit card debts?

These bills will not pass away when you do. Your family will be contacted by all your creditors looking for payment from the estate.

If you have a life insurance policy then your children/spouse will have a resource to settle those debts.

Do you care for a special needs child?

What will happen to your special needs child after you die? The death benefit from a life insurance policy will help take care of your child into the future.

It’s usually best to establish a special needs trust for your child if you do decide to make your child a beneficiary. By doing so, your child’s government benefits will remain unaltered despite the life insurance payment.

Do you have a favorite charity?

Imagine how much of a difference you could make in the future of your favorite non-profit organization, such as a church or school.

You can designate the charity as the beneficiary of your tax-free life insurance proceeds.

Do you want to gift your loved ones with something special?

You may have everything you need in your senior years. What about those closest to you? Could your gift of a tax-free cash payment help your grandchildren afford college tuition?

Or the down-payment on their first home? Your memory can live on through the generous gift of a life insurance policy.

How Much Life Insurance Do Seniors Need?

The above points might make you think it is actually the perfect time to buy life insurance. So how much life insurance should you buy?

The best thing to do is to attach some actual dollar amounts to your life insurance wish list. By crunching the numbers, you’ll be able to determine the best face amount to purchase.

  • How much money will my spouse (or other dependents) need to get by after I’m gone? How long will my spouse need that extra money to cover his/her expenses?
  • How much will my preferred funeral arrangements cost? Do you want a ton of flowers, gold coffin, stretch limo for the family? Or do you just want a cremation without any frills?
  • What amount of money would I like to gift my children, grandchildren, or favorite charity?
  • When will my personal loans, mortgage, or other debts be paid off? If I died tomorrow, what amount of money would my family need to settle my estate?
  • Is my estate subject to an IRS tax? If so, what amount might my loved ones be expected to pay?

Types of Life Insurance That Are Best For a Senior

The majority of life insurance companies will accept applications up to 85 years old. A few life insurance carriers will even sell life insurance plans up to age 90 years old.

There are varieties of plan options and premiums available. Remember, no two life insurers are the same. You life insurance agent will be a great resource in finding insurance policies that will meet your particular needs.

Term Life Insurance for Seniors

Level term life insurance is the most popular type of term life policy. It’s a common choice made by individuals under the age of 80 years old. A level term guarantees you’ll have the same premium and same face amount for the entire policy.

Usually, term life insurance will remain effective for 5, 10, 20, or 30 years. Once the term you selected expires then your policy is no longer valid. You do not receive a return of paid premiums. Usually, a term insurance company will restrict those at age 80 years old to a 10 year term life insurance policy. There’s always a good chance you will actually outlive your 10 year term policy and, at an advanced age, will have to find different coverage.

There are other things to take note of when it comes to term life insurance. For example, you will be expected to go through medical underwriting for a term life insurance policy. Also, term life insurance does not gain any cash value the way permanent life insurance does.

Permanent Life Insurance for Seniors

Permanent life insurance is another common coverage option for all ages. Permanent life insurance can be either a Whole or Universal style policy. Your life insurance agent will review the pros and cons of both whole and universal life insurance for seniors.

Most life insurance agents will recommend you do buy a permanent life insurance policy if you are already close to 80 years old or older. This way you will for sure have life insurance coverage for the remainder of your life as long as your premiums are paid.

Plus, building cash value on a permanent life insurance plan makes it a sound financial investment. The cash value can be used to take a personal loan. Of course, the personal loan must be repaid at some point. Otherwise, your beneficiaries will receive the face amount minus the loan amount that was not repaid.

Joint Life Insurance (“Survivorship”) for Seniors

Joint life insurance policies can be either a permanent (whole) or term life insurance policy. A joint life insurance is a good option for a married senior.

Both you and your spouse can be covered on the same life insurance policy and only pay one monthly premium. Joint life insurance can often save couples (or business partners) a lot of money over the course of the policy. The way it works is that a joint life insurance plan will pay a death benefit to the surviving spouse. Once the first spouse passes away and the death claim has been paid, the policy will end.

This means the surviving spouse may, depending on his/her financial situation at the time, buy a new single life insurance policy that will cover their own life or simply go without.

Guaranteed Issue Life Insurance for Seniors

Some seniors suffer from multiple health challenges in their later years. For that reason, a senior may decide it’s best to go with a guaranteed issue life insurance plan.

Guaranteed issue life insurance allows the applicant will skip traditional medical underwriting, thereby, “guaranteeing” he/she will be issued a life policy. It’s important to keep in mind that this type of life coverage comes with a more expensive price tag than traditional plans. This is because the life insurer is taking an unknown risk by insuring the applicant. So they charge more to make up for the risk.

Most guaranteed issue life insurance coverage limits the face amount to under $50,000.

AARP members often decide to just go ahead and purchase the AARP guaranteed issue term life insurance policy for ages 50 to 74 (spouses aged 45 to 74 years old).

The AARP member term life insurance face amounts range from $10,000 to $100,000. This all sounds so great!

However, the most important thing to remember about the AARP term life insurance plan is that the premiums will increase over time. Coverage will only last until age 80 years old.

What Does Life Insurance For Seniors Cost?

It is always encouraged to work with an independent life insurance agent that can compare the best life insurance carriers for your needs, as well as your personal budget.

That is the best way to receive accurate life insurance quotes. However, we’ve put together estimated life insurance quotes for seniors just to give you a basic idea.

Term Life Insurance Quotes for Seniors

Term Life Insurance Rates for Male Seniors

All applicants, in this case, are non-smokers, and otherwise healthy individuals for 10 Year term policies. Rates are monthly premiums.

$25,000 Coverage $100,000 Coverage $500,000 Coverage
60 years old $25 $51 $204
65 years old $41 $79 $353
70 years old $68 $146 $622
75 years old $116 $238 $1,164
80 years old $208 $466 $2,306
85 years old N/A N/A N/A

Permanent Life Insurance Quotes for Seniors

Permanent Life Insurance Rates for Male Seniors

All applicants, in this case, are non-smokers, and otherwise healthy individuals. Rates are monthly premiums.

$25,000 Coverage $100,000 Coverage $500,000 Coverage
60 years old $61 $168 $810
65 years old $73 $222 $1,066
70 years old $106 $295 $1,424
75 years old $139 $421 $1,915
80 years old $224 $682 $3,068
85 years old $293 $1,100 $5,049

Guaranteed Issue Life Insurance Quotes for Seniors

Guaranteed Issue Life Insurance Rates for Male Seniors

All applicants, in this case, are non-smokers, and otherwise healthy individuals. Rates are monthly premiums.

$10,000 Coverage $25,000 Coverage $40,000 Coverage
60 years old $63 $154 $292
65 years old $73 $179 $359
70 years old $93 $229 $469
75 years old $124 $308 $626
80 years old $175 $434 $902
85 years old $298 $744 N/A

AARP Guaranteed Issue Life Insurance Quotes for Seniors (AARP Members)

AARP Guaranteed Issue Life Insurance Rates for Male Seniors

All applicants, in this case, are non-smokers, and otherwise healthy individuals. Rates are monthly premiums.

$100,000 coverage amount
60 – 64 years of age $57
65 – 69 years of age $74
70 – 74 years of age $106

How Much Life Insurance Coverage Do Seniors Need?

It’s easy to see all the reasons active, vibrant seniors like yourself are buying life insurance policies later in life. There may be expenses you don’t want your family to inherit.

Or perhaps you would like to fulfill a thoughtful gift to your loved ones or a favorite charity. Maybe your spouse will need the peace of mind and security a life insurance policy provides.

For all those reasons, it’s best to contact your independent life insurance agent today for customized life insurance quotes.

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