The best life insurance options for seniors in 2021

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When planning for the future, many people purchase term life insurance coverage that expires by the time they retire. At that point, their kids will be grown, their mortgages will be paid off, and they'll have accumulated enough assets to ensure that their financial obligations will be taken care of when they die.

But some people may find that they still need life insurance coverage as a senior. Rates can be considerably higher when you're buying life insurance later in life, but there are still policies available to you if you’re in your 60s, generally up to age 85.

Seniors can find affordable life insurance by working with an insurance agent to help them decide on the right amount of coverage. The agent can recommend an insurance company that will offer the best rates for their age and health profile.

What to look for in a senior life insurance policy

Because life insurance quotes increase as you age, senior shoppers have special considerations. Premiums for a basic policy can make coverage unaffordable or offer minimal upsides, such as smaller death benefits and more restrictions.

But at any age, shopping for life insurance should begin with these two steps:

• Calculate how much life insurance you need

• Determine what type of policy is right for you

From there, you may decide that life insurance isn’t right for you based on your income, dependents, debts, age, or other factors. Or, you may have narrowed down your search to a few different policy options.

→ Read our full guide to buying life insurance

Why should seniors consider life insurance?

Most seniors don’t need life insurance. Life insurance is meant as income replacement to protect loved ones in case a breadwinner dies. Many seniors either no longer have dependents or have savings and assets built up to take care of those dependents.

But there are some situations when senior citizens should consider life insurance:

• You have people dependent on your income. Some seniors have people who are still dependent on their income or who would be hurt financially if they died.

• You have unpaid debt. There are many debts that your spouse is not responsible for, but if you and your spouse (or child, or business partner) have co-signed loans, for example, they’ll need to be able to keep up the payments on their own.

• You want to cover funeral arrangements. Funeral expenses average around $8,000 - $10,000 in the U.S. and life insurance is one way to ensure that your family won’t have to worry about those costs when you’re gone.

• You want to cover end-of-life medical expenses. If you end up in the hospital needing end-of-life care, that can result in tens of thousands of dollars in medical debt that your loved ones might have to pay off when you’re gone.

• You want to leave an inheritance. Retirement can be expensive. The death benefit from life insurance can be a way to leave tax-free money behind for kids or grandkids.

What are the different types of life insurance for seniors?

Term life insurance for seniors

Term life insurance is the most affordable option for seniors looking for coverage over $25,000. (Coverage options can go up as high as $10 million, depending on your income.)

Once you buy term insurance, your rates are set for the life of the policy. But the older you are when you apply, the higher your premiums will be. When you buy a term policy, you also must choose your term length. Applicants over 60 will usually have to choose between 10-year and 20-year terms, though some companies offer 25-year terms for applicants over 60. A longer term length will make your premiums more expensive, but you will be locked into the rate you receive when you sign up and will be covered as long as you pay your premiums.

The term life application requires that you answer medical questions and undergo a medical exam to set premiums. If you have a history of health complications, term insurance can be difficult to qualify for.

Life insurance companies use a health classification rating system to quote premiums. If you qualify for the Preferred category (second best), your rates might be similar to the ones below, but would increase or decrease depending on your health.

Sample 10-year term life insurance rates for seniors

Rate illustration represents non-smoking individuals in the Preferred health class, as of 1/28/2021.

Sample 20-year term life insurance rates for seniors

Rate illustration represents non-smoking individuals in the Preferred health class, as of 1/28/2021.

N/A = Policies not available

Whole life insurance for seniors

Some seniors have existing permanent life insurance policies, such as a whole life insurance policy, universal life insurance, or indexed universal life insurance, that do not expire. But for some people, when planning for retirement, it might make sense to cancel a life insurance policy if it’s no longer needed and put the money used for premiums toward other expenses.

We only recommend canceling a permanent life insurance policy if you no longer have dependents or outstanding debts, but it’s important to think about the cost of your premiums compared to the other costs you may have.

In most cases, if you have a permanent life insurance policy, you’ve had it for a while, it may have accumulated cash value, and you’ve invested many premiums in the policy.

“Seniors with good permanent policies with affordable premiums should, in many cases, maintain them,” says James M. Wallace, a Certified Financial Planner® and senior partner at Millenium Planning Group.

Simplified-issue life insurance for seniors

Simplified-issue life insurance is a type of final expense insurance, which is how the insurance industry refers to policies with relatively low coverage amounts meant to provide beneficiaries with enough money to cover funerals, burials, etc.

“Final expense policies can benefit seniors with little assets and the need for cash for final expenses,” adds Wallace.

The application for simplified-issue insurance does not include a medical exam, but does include a health questionnaire. It can be easier to qualify for simplified-issue life insurance than term life, but coverage isn’t guaranteed. At Policygenius, our insurance partners offer simplified-issue permanent life insurance policies for coverage amounts ranging from $2,000 to $40,000, as of February 2021.

Rates are higher than term life insurance for comparable coverage amounts, but if you can't qualify for a term policy, don’t want to take a medical exam, or only need a small amount of coverage, simplified-issue insurance may be a good option.

Sample simplified-issue whole life insurance rates for seniors

Rate illustration represents non-smoking individuals in the Preferred health class, as of 1/28/2021. Not all policies in this calculation are available in all states. Rates may vary by policy amount, health class and state.

Guaranteed-issue life insurance for seniors

The other type of final expense insurance is guaranteed-issue life insurance.

Like simplified-issue life insurance, guaranteed-issue policies are permanent policies that don’t require a medical exam. But guaranteed-issue policies go a step further and don’t even include a medical questionnaire (though some policies might require applicants to answer “knockout” health questions about terminal illnesses that could lead to automatic denial of coverage).

Again, the premiums will be higher than term life insurance premiums for relatively low coverage amounts, which top out at $25,000.

It’s important to note that guaranteed-issue policies usually have graded death benefits for the first two years after the policy is placed. That means that if you die within the first two years that your policy is in force, your beneficiaries won’t get the full payout. Instead, they’ll receive a refund of your premiums paid, usually plus 10%. After those two years, however — or within the two years if the death is an accidental death, such as a car crash or murder —they will receive the full death benefit.

Sample guaranteed issue whole life insurance rates for seniors

Rate illustration represents non-smoking individuals in the Preferred health class, as of 1/28/2021. Not all policies in this calculation are available in all states. Rates may vary by policy amount, health class and state.

Long-term care insurance for seniors

Long-term care insurance is a different product than life insurance. You do not have to die to use long-term care insurance and it pays for nursing homes and at-home care while you’re still alive.

“Even having a modest amount of insurance like long-term care insurance allows a family to take care of their loved one’s immediate need and buys them time to come up with long-term solutions,” says Melissa B. Brennan, a Certified Financial Planner at ARS Private Wealth.

Some life insurance policies do include what are called living benefits or accelerated benefits riders. These riders are additions to your policy that stipulate that if you are diagnosed with a terminal illness while your policy is active, you can get part of your death benefit paid early, while you’re still alive.

Some life insurance policies also offer the option to add a long-term care rider, which will use your death benefit to pay for long-term care expenses if you have a qualifying illness or condition. Long-term care riders generally require additional underwriting and premiums.

Life insurance rates for seniors by age

If you’re a senior who has determined that you do need life insurance, the next step is to talk to an independent broker or agent to ensure that you're getting the best rates. An advisor can help you choose the right death benefit and term length, and help you find a policy that makes the most sense for your health and financial situation.

Sample life insurance rates for 60-year-olds

If you’re in your 60s, you may qualify for term life insurance; a broker can help you with quotes. If you don’t qualify for term life insurance or if you don’t want to get a medical exam, then final expense insurance (simplified-issue or guaranteed-issue) can be a good option for life insurance if you’re over 60.

Rate illustration represents non-smoking individuals in the Preferred health class, as of 1/28/2021. Not all policies in this calculation are available in all states. Rates may vary by term, policy amount, health class and state.

N/A = Policies not available

Sample life insurance rates for 70-year-olds

Applicants in their 70s can still purchase term life insurance if they're in good health. Simplified-issue policies and guaranteed-issue policies are also an option.

Rate illustration represents non-smoking individuals in the Preferred health class, as of 1/28/2021. Not all policies in this calculation are available in all states. Rates may vary by term, policy amount, health class and state.

N/A = Policies not available

Sample life insurance rates for 80-year-olds

If you’re 80 years old, you may still be able to buy a term life insurance policy if you’re in good health. But the premiums over the life of the policy will be higher than the death benefit. If you’re 81 or older, term life insurance is no longer an option because life insurance companies won't write policies for applicants over 80. Up until age 85, you can purchase simplified-issue or guaranteed whole life policies.

Rate illustration represents non-smoking individuals in the Preferred health class, as of 1/28/2021. Not all policies in this calculation are available in all states. Rates may vary by term, policy amount, health class and state.

N/A = Policies not available

Is life insurance for seniors worth it?

In general, life insurance isn’t a worthwhile investment if you don’t have dependents or outstanding debts. Seniors looking for end-of-life care or funeral expense coverage can consider a simplified or guaranteed-issue life insurance policy. But for most people, it’s more cost-effective to put the money you would apply toward those premiums into a stable investment or savings account for your family.