Most people would rather not think about death, but we’re only mortal. Whether you are a spry young parent with little children, or a senior enjoying your retirement, you’d be smart to consider life insurance. But are there actually affordable life insurance plans for seniors?
The great news is — YES!
Life insurance policies can protect your loved ones and your assets when you pass. While young parents might need life insurance to take care of their kids, older folks should consider a policy to help pay for funeral expenses, the cost of estate taxes, or to support a surviving spouse.
Insurance does become more expensive and harder to find as your age advances. So, SuperMoney compiled this list of affordable life insurance plans for seniors. It gets updated in real-time as actual shoppers rank these companies, so you can see the latest ranked info.
Below that, we have more info on life insurance plans that may help you with your decision as well.
Term vs. Permanent
First, it’s important to understand the two main forms of life insurance: term life insurance and permanent life insurance (also known as whole life insurance).
A term policy will cover the beneficiary for a set amount of time, say 10 to 15 years. Once the term expires, you can renew your policy, terminate your plan or exchange it for a permanent policy. As its name suggests, permanent life insurance covers the beneficiary until they die.
Typically, permanent policies come with a fixed premium, which means you will pay the same amount year-after-year, even as you age. Permanent premiums, however, are usually more expensive than their term counterpart.
In contrast, term policies don’t always feature a fixed premium, which means you may have to pay a higher premium each year.
That said, there are fewer term policies available to seniors, so if you are a retiree looking for a new policy, you’ll likely have to purchase a permanent plan.
Mutual of Omaha – Most Versatile
Investopedia ranks Mutual of Omaha as their No. 1 “Best Overall” life insurance for seniors in the year 2021. That’s because the company offers customers a host of choices, which is rare when it comes to senior plans. Mutual of Omaha offers term policies to customers as old as 80, which can be renewed annually until the age of 94. Such policies cover as much as $100,000.
Additionally, Omaha offers permanent policies to applicants up to age 85, with guaranteed coverage ranging from $2,000 to $25,000. And opting into a permanent plan does not require a medical exam or the submission of health-related information.
Another thing that sets Mutual of Omaha apart is its customer service. The company is known to offer unbeatable support online, over the phone and in-person with local agents.
AIG – Best final expense and living benefits
AIG is renowned for its final expense insurance. This refers to coverage for end-of-life costs, like the price of a funeral or final hospital bills. Final expense insurance through AIG covers between $5,000 and $25,000.
Additionally, AIG is one of the most inclusive insurance policies, guaranteeing acceptance to any applicant aged 80 or below. This sets AIG apart, as many of its competitors have an age cutoff far earlier than 80. Furthermore, AIG offers living benefits in the case of chronic or terminal illness at no additional fee. This means, if you are terminally ill and need to access your life insurance money before you die, AIG will let you dip into as much as 50% of your policy with no surcharge.
One drawback of AIG is that it has received mediocre customer service ratings, according to industry researcher J.D. Power & Associates.
Transamerica – Best for seniors over 80
Transamerica is one of very few insurance companies that offers term policies to people over 80 and whole coverage up to the age of 85. This is good news for seniors who find their options scarce at a certain age.
Better yet, Transamerica’s plans are quite generous, especially considering the age of its clients. Those between 56 and 65 are eligible for up to $40,000 in coverage, while those between 66 and 75 are eligible for up to $30,000, and those between ages 76 and 85 can receive as much as $25,000 in coverage. And the majority of Transamerica policies offer full benefits on day one.
One major complaint about Transamerica is that its website’s functionality is limited. That means you may have to call an agent to get a quote or begin a new policy. (Of course, for senior customers, this might not be a huge inconvenience).
If you want to give your family and yourself financial peace of mind, consider getting a life insurance policy today.