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Best Life Insurance for Seniors

Even as seniors, many of us hesitate to purchase life insurance; doing so forces ourselves to acknowledge our own mortality. Though contemplating the end of life can be difficult, having life insurance can bring about peace and support for ourselves and our families.

Whether you’re single or married, it’s important to get your will, finances and insurance policies in order. You’ll make it easier for the people around you to start moving on with their lives after you die.

What is life insurance?

Life insurance is an insurance policy that pays out a certain amount of money to a beneficiary or beneficiaries when you pass on. This money can be used for your funeral or burial expenses or be financial assistance for your family. You can make sure that your family members are financially cared for. Life insurance can also be used to take care of any final wishes you might have had. The two most common types of life insurance are term life insurance and whole life insurance. Whole life insurance is also known as permanent life insurance.

Term life insurance

Term life insurance is an insurance policy that provides insurance coverage for a fixed premium price over a specific period. These terms are typically 10, 20 or 30 years. This term period is laid out in the life insurance policy you decide to purchase. After this term is completed, the policyholder will need to purchase another insurance policy. At this point, your premiums and the policy could change, but your life insurance policy would be renewed for another term.

If the term life insurance policyholder dies during the term specified in the life insurance policy, that life insurance policy is paid out to the beneficiary or beneficiaries. A policyholder can make his or her spouse, kids, or another individual the beneficiary of the life insurance amount. The benefit of term life insurance is that it tends to be more affordable than other forms of life insurance. This is because the policy is limited to a certain amount of time, which limits the amount of risk the insurance company is taking on.

Whole life insurance

Whole life insurance is also known as permanent life insurance. This is a life insurance policy that exists for the entirety of a person’s life, as long as the policyholder stays up to date on his or her premium payments. If you miss payments, you might have to purchase another life insurance policy, which could change your monthly or annual payment amounts.

The premiums for a whole life insurance policy are typically higher than they are for term life insurance. This kind of life insurance policy covers your whole life, so the insurance company is taking on some amount of risk by insuring you for the rest of your life. Premiums tend to not increase as the policyholder gets older, so if you have life insurance early on in your life, your policy premiums could be cheaper over the long term.

There are other benefits to purchasing a whole life insurance policy. This kind of life insurance policy can be used to accumulate cash value. A loan can be taken out on this policy if you need money for whatever reason. This additional flexibility with your policy can increase monthly premiums. If you do borrow against your whole life insurance policy, your insurance beneficiary amount will change depending on the cash value of the money you took out.

There are a few other kinds of life insurance policies, each with their own unique characteristics.

Increasing and decreasing term life insurance

This coverage is a kind of insurance policy where the death benefit will decrease over time while the premium remains the same. This can be used to cover the balance of an unpaid mortgage or other debt a policyholder might be in. An increasing term life insurance policy might be purchased by someone whose insurance needs will increase over time, such as a person who has just had a child. Seniors might benefit more from a decreasing term life insurance policy.

Universal life insurance

This is a kind of permanent life insurance. In this kind of insurance policy, the policyholder can decide how much of their premium payment will be put towards the death benefit of the insurance policy and how much will be put to the policy’s cash value. This offers a level of flexibility for the policyholder to benefit from the policy during his or her lifetime.

Variable life insurance

These policies offer cash components and death benefits, as well as the opportunity for policyholders to invest in things like equities. With this kind of policy, the death benefit can increase or decrease, but will not go below the amount set in the insurance policy. Policyholders have flexibility with this kind of life insurance policy as well.

Variable universal life insurance

These policies offer no guaranteed minimum cash value inherent within the policy, but policyholders are able to invest their policy’s cash into investments like mutual funds. This can allow you to increase your policy’s cash value while ensuring your beneficiary’s financial well-being when you pass on.

Survivorship life insurance

These policies cover more than one person in the policy. This kind of insurance policy can pay out when one of the policyholders has died. This insurance policy can be cheaper than buying two separate life insurance policies, depending on the kind of life insurance coverage you are looking for. A joint survivorship policy pays out after both parties covered in the policy pass away. This kind of life insurance policy would work for a couple who is growing old together.

Final expense life insurance

This is also known as burial insurance. This kind of life insurance policy is typically purchased by people who are between the ages of 50 and 85. This kind of coverage is used to pay for funeral and burial costs associated with dying, so that your family members or close friends don’t have to take on that burden. This policy can be used to pay for a headstone, a memorial service, and other associated costs surrounding your death.

Guaranteed acceptance or no medical exam life insurance

Finally, a guaranteed acceptance life insurance policy doesn’t require policyholders to undergo a medical examination during the process of underwriting the policy. This kind of policy is best for people who might have adverse health conditions that make it difficult to find other kinds of affordable life insurance. These policies can be purchased quickly, as the medical examination doesn’t need to be conducted for the policy to be approved.

Average life insurance cost

As it is with other kinds of insurance policies, the premiums you pay depend on a few factors. When you purchase life insurance, you will likely have to undergo a medical examination to determine your health status. Factors that influence the overall cost of your life insurance premium include:

  • Your gender
  • Your age
  • Whether you smoke
  • Your occupation
  • Any major medical issues you may have

Smoking and major medical issues are two of the factors that will push your life insurance premium up. Smokers can expect to pay, on average, 200% more on their life insurance premiums than non-smokers will over the course of their life insurance policy. As you age, a smoker might pay up to 300% more.

For term life insurance policies, the 20-year term policy is regularly the most popular choice. On average, a non-smoker who is 50 years of age can expect to pay an average of $77 per month for term life insurance.

A 55-year-old non-smoker will pay about $122, a 60-year-old non-smoker can pay about $208, and a 65-year-old non-smoker can pay, on average, $348 per month.

In the United States, the average cost for a whole life insurance policy premium, per month, can be about $420 for a female non-smoker. A man of the same age can expect to pay an average of $530 for the same policy.

A  60-year-old female non-smoker will pay a monthly average of $705, while a 60-year-old male will pay an average of $864.

The average cost of life insurance premiums, regardless of the policy type you purchase, will likely be different for senior men and women. Women tend to live longer, which makes them less expensive to insure over the long term. Women in good health will likely receive the cheapest life insurance premiums, while men can expect to pay a bit more per month depending on their health and their chosen life insurance policy.

Most affordable term life insurance companies

For seniors, the most affordable term life insurance policies might take some digging to find. With the right research, you can choose the policy that will work best for you and your financial situation. For seniors who are looking for affordable term life insurance policies, consider looking into TIAA Life, New York Life, or Amica Life insurance companies. All three of these companies rank high in financial strength from Moody’s, S&P, and AM Best.

All three of these companies specialize in term life insurance, which tends to be cheaper than permanent life insurance because of the shorter coverage period. On average, a 50-year-old with a 20-year term can expect to pay about $43 per month on a $250,000 policy, while a 60-year-old could pay a premium of $115. A 70-year-old could pay $406.

Depending on where you live, you might have local life insurance company options to choose from. Be sure to look for these local opportunities as well as the bigger national companies. The more life insurance options you have to choose from, the better able you will be to find one in your price range.

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Most affordable whole life insurance companies

If you are looking for a whole life insurance policy, consider the affordable options from Guardian Life Insurance, MassMutual and Northwestern Mutual. These companies are located all over the country and offer affordable insurance policies for seniors.

Whole life insurance tends to be more expensive than term life insurance, because insurance companies are insuring you for your entire lifetime. These three companies offer lifetime premium benefits, which keep your monthly premium costs lower if you’ve been a customer for many years. Additionally, your premiums can be higher depending on how much your insurance policy is for.

On average, a $250,000 whole life insurance policy could cost about $325 per month for a 60-year-old, $597 for a 70-year-old, and $1,304 for an 80-year-old. Rates will differ between men and women.

If you are considering whole life insurance, make sure to know your options. Depending on your age, health, and gender, your insurance policy premium may be cheaper than you expect.

Best affordable life insurance companies

Overall, there are affordable life insurance policies to be found no matter where you live in the United States. If you are looking for a life insurance policy, but aren’t sure what kind of life insurance you want to purchase, these companies all offer a variety of life insurance options. They can guide you through life insurance policies that would be best for you, your spouse, and your budget.

In 2018, the best affordable life insurance companies for seniors include TIAA Life, New York Life and Transamerica.

TIAA Life insurance ranks high in customer satisfaction for the price of its insurance plans and its options for renewing plans over your lifetime. TIAA Life has the lowest rates for non-smokers of all ages, which makes this the go-to option for seniors in good health who are looking for affordable life insurance. Compared to other national insurance agencies like State Farm and New York Life, TIAA ranks at the top for the cheapest life insurance policies.

TIAA offers policyholders the ability to purchase a term life insurance policy, but to convert it to a permanent policy at any time. TIAA regularly ranks in the top reviewed life insurance for financial strength, getting an A++ rating from AM Best, an AA+ rating from S&P’s, and an AA1 rating from Moody’s.

Of course, policy premiums will vary depending on the person applying for the policy. Make sure to get multiple quotes from companies to make sure you are getting the best rate for you.

New York Life is another highly rated life insurance company in terms of affordability and options for seniors looking for reliable life insurance. New York Life offers a variety of flexible term life insurance policies, so seniors can better customize their life insurance policies to the term limit they have in mind.

New York Life can offer more affordable long-term policies for some people because of their term limit flexibility, in addition to their options for converting term policies into permanent life insurance policies when you choose to do so.

New York Life also offers guaranteed universal life insurance policies, which are available to you up to age 85 years of age. They offer policies with the lowest minimum ($25,000). Additionally, New York Life offers a flexible Accelerated Death Benefit, which allows policyholders to use some of their insurance money for current medical expenses.
In 2017, New York Life received an A++ financial strength rating from A.M. Best, an AA+ rating from S&P’s, and an Aaa rating from Moody’s.

Finally, Transamerica offers the most affordable insurance policies and options for you, even if you have adverse medical conditions or or are smokers. This is the one category that will seriously inflate premiums for the vast majority of life insurance companies.

Although Transamerica still places this in a big category for insurance risk, they don’t seem to have this factor affect premiums as much as other life insurance companies do.

Transamerica, on average, only charges about $1-$3 more for seniors who want to purchase policies than TIAA does, so this company can still provide cheaper life insurance options for seniors. Transamerica received an A+ financial strength rating from AM Best, an AA3 rating from Moody’s, and an AA rating from S&P in 2017.

Final thoughts

Doing your research and getting quotes from a variety of companies is the only way to really make sure that you are getting the most bang for your buck when it comes to your life insurance policy. Everyone is different, and therefore everyone’s life insurance policy will be higher or lower depending on factors unique to your life.

Whether you want to purchase term life insurance, whole life insurance, or any of the other life insurance options, there is an affordable policy option for you that will allow you to rest easily and make sure that the ones you love are cared for, even when you are gone.