If you’re a senior shopping for life insurance, your new policy could be the last one you’ll ever own, so it’s essential to get it right.
When we’re assisting someone to find the perfect life insurance policy as a senior, we focus on three key factors, in this order:
- Company Selection
- Product Type
- Value
First, the company you decide to go with needs to be trustworthy (and affordable).
Then, it’s important to choose the product type which can accomplish your specific goals.
Last, consider the value you’re getting in return because any life insurance plan is about leverage: You want to pay less now for more benefit later!
So, let’s start with the best life insurance carriers who provide the best life insurance for seniors.
First, The Top 3 Best Life Insurance Companies For Seniors This Year
[companies-table type=”seniors”]
We discovered the benefits of working with these three carriers were shoulders above the rest.
Of course, you’ll still want to do your own homework below (just to make sure).
Let’s move on now to the full top list of insurers to consider for a senior life insurance plan.
These selections are based on a full criteria of financial strength, the value they provide with their policies, the policy types they offer, and the level of customer service they provide.
Top 10 Best Life Insurance Companies For Seniors In 2021
Based on your situational need and product selection it’s time to find the best company for you.
The best life insurance companies for seniors are trustworthy, reputable and established, and have an affordable product which matches your need.
Your focus is likely permanent coverage, so you want this company to be around when your survivors need the benefits you paid for. This could be decades from now.
A company’s financial strength ratings are helpful, but they’re only one piece of the puzzle.
There are also more subtle nuances to consider, like whether you want a specific kind of rider, or if you are buying for estate preservation versus strictly minimal death benefit.
However, the carriers we recommend can often serve more than one need. Just because you don’t see a carrier listed below doesn’t mean we won’t offer their product to you, if the shoe fits, so to speak.
Given these parameters, we’ve done a lot of the legwork for you.
Here are our top 10 best life insurance companies for seniors this year:
- Mutual of Omaha
- Transamerica
- Protective
- Banner
- Sagicor
- Fidelity Life
- Assurity
- 5Star
- Northwestern Mutual
- Foresters
Mutual Of Omaha Life Insurance Company
Whether you need easy-to-get coverage up to $50,000, or you require a larger death benefit for as long as you live, Mutual of Omaha Life, an “A+” rated, century old company, offers a full line of product choices.
Mutual of Omaha is simply the top selection considering its reputability, strength and product selection, and the value is always there for each demographic, especially as you get older.
For most, it’s going to be the best bang for your buck, period.
If you want selection, simplified underwriting, and an extremely strong company, then you may want to dig a little deeper on Mutual of Omaha.
Here is more information on the products they offer.
Transamerica Life Insurance Company
Our all-around best company for senior life insurance is Transamerica Life Insurance Company.
Already on our list for one of the best burial life insurance companies and our list of overall top carriers, it’s no stretch to see them as a top solution for seniors when you consider their entire lineup of products.
Transamerica has everything from simplified final needs options up to fully underwritten choices for more complex scenarios.
Whether you require a small death benefit and want to skip the medical exam, or you and your spouse need long-term estate planning with the use of a universal life insurance product, Transamerica Life can help.
Backed by more than 110 years in the business, they are a long-standing, secure company.
A.M. Best, Fitch, Moody’s, and Standard & Poor’s all agree, having awarded the Transamerica Life Insurance Company “A” or better ratings across the board, something few carriers achieve.
The ability to add accidental life or even long-term care insurance makes Transamerica even more attractive.
Click here to read more about Transamerica.
Protective Life Insurance Company
More than a century old, Protective Life offers some of the best value on the market, dollar for dollar, especially for guaranteed universal coverage.
A top rated, trustworthy carrier, Protective Life offers several options within the universal life insurance realm.
Their life insurance plans for seniors are customizable and competitively priced, and Protective Life has selections for both individual and survivorship plans.
You won’t find much for small, burial policies from Protective, but you can get relatively low face amounts for permanent coverage with the fully underwritten options.
These make great options for those who want a little flexibility with long-term coverage.
You can read more on our page about Protective.
Banner Life Insurance Company
Having come in as a top 5 carrier on our overall list, Banner Life Insurance Company has two distinct advantages for seniors:
- price, and
- risk underwriting.
Those with serious health concerns may get a little help in the lower tables from Banner.
Banner has made an impact on the life insurance market in the past few years for its term life options, but few know how good a fit they are for seniors with their universal products and more liberal underwriting style.
Their strong financial status and excellent use of independent agents makes them a great selection.
Seniors can’t use Banner’s no exam products because of age, but their Step Up UL® is a great choice for anyone looking for competitively priced permanent products.
If health is an issue, you will definitely want to look at Banner as they are consistently one of the best-priced carriers for seniors with medical conditions who can only qualify for Sub-Standard rates.
Click here to learn more about Banner Life.
Sagicor Life Insurance Company
Rounding out the top 5 best life insurance carriers for seniors is Sagicor Life Insurance Company, a premier, no-exam company that meets the needs of seniors because of some of their no lapse guarantee products.
A 170-year-old company with an “A” rating by A.M. Best, Sagicor Life is reputable, strong financially, and it meets our criteria of offering outstanding value.
With issue ages as high as 85, Sagicor also hits a sweet spot for older shoppers, and while you can skip the exam, doing so might not lead to the best rates.
The no-lapse guarantee in their universal life insurance products offers guarantees while keeping premiums low.
For more sophisticated cases, Sagicor Life hosts a couple of indexed universal life insurance products, a much more niche growth and advanced planning option.
It’s not for everyone, but it can be a nice choice for several scenarios.
To learn more about Sagicor, read our review.
Fidelity Life Association
Many people know the name Fidelity, though likely for investing more than life insurance.
An “A” rated insurance carrier that got its start before the 1900s, Fidelity is the first company to make our list strictly because of its final expense products.
Fidelity Life is second-to-none in a couple different product areas for burial coverage for seniors, including its hybrid and graded policies.
Made specifically for people 50 and older, Fidelity offers some guaranteed life insurance products for those6 who otherwise would be denied because of health conditions.
There are no exams, issue is near instant, and the payout structure is fair.
Fidelity’s Hybrid Life mixes life and accident, something you can’t find many other places.
Here is our full review on Fidelity Life if you want to read more.
Assurity Life Insurance Company
Assurity Life has been around a long time, but the name dates only to 2007 when three established companies combined into one single brand.
An “A” rated company, Assurity is a top-tier no-exam company that works well for many people 55 and older.
One facet to consider is your access to critical illness and disability coverage, alongside their selection of term and universal policies.
Assurity’s underwriters may be a little more selective than other carriers, but applicants who qualify can expect competitive rates, especially on universal life insurance coverage.
On the advanced planning side, Assurity offers a single premium option, great for something like funding a policy up front and then enclosing in an irrevocable life insurance trust to satisfy estate plan needs.
If Assurity may be right for you, continue reading the full details here.
5Star Life Insurance Company
Though newer to the market, 5Star Life has squeezed into the top 10 this year for ease of access and excellent value.
While not the biggest and most prominent name in the industry, 5Star has met our criteria for value and product availability.
Rated an “A-” from A.M. Best, 5Star is a secure company that offers a nice suite of choices for short- and long-term needs, including final expenses.
In addition, simplified underwriting (and guaranteed underwriting) mean fast approval, and you won’t feel the price hit as you do with other carriers that offer this type of policy.
A notable product is 5Star’s Family Protection Plan-TI, which has level premiums as far as age 100 (though the benefit could decrease over time).
Even more, the application asks just seven questions and does not check databases.
For anyone looking for simple, fast coverage to meet a specific budget, this is a great option.
Here is more information on 5Star Life.
Northwestern Mutual Life Insurance Company
Dropping down our list this year is Northwestern Mutual Life Insurance Company, who also fell on our best overall life insurance companies in 2019.
One of the longest standing and last remaining mutual companies, it boasts the highest ratings of any single life insurance company.
Though Northwestern Mutual won’t offer your best deal on a final expense policy, the company excels in advanced financial planning life insurance solutions.
You can get everything from term to permanent, and even variable products, when needed, too.
Like Transamerica, Northwestern offers long term care, often a great match with high level financial planning for seniors.
Read more about Northwestern Mutual here.
Foresters
With Foresters, you can enjoy the confidence of security and a pretty wide selection of final expense options from a company established in 1834.
An “A” rated, non-profit company, expect good value with a lifetime of benefits you know you can trust.
Foresters made the cut primary because of its selection of whole life, burial and even accidental coverage.
While a small portion of people will need it, Foresters’ whole life policy is a great option for those who want an easier approval with benefits available the day the policy goes in force.
There are also several universal life options to choose from if whole life doesn’t fit the bill.
A full review of Foresters can be found here.
Navigating Your Purchase
- Why It’s Important
- Get The Most Value
- Types Of Coverage
- Riders
- Agents
- Applications
- Sample Rates
- Advanced Planning
Why Life Insurance For Seniors Is So Important
Why do you need life insurance?
That should be the first question someone age 60 or older should ask. The answer will make all the difference in finding the right policy.
Here are a few reasons you might be considering:
- Simple burial costs
- Paying outstanding debts
- Estate taxes
- Pension maximization
- Legacy, or gift giving
- Charitable donations
More than 46 million people today are over the age of 65, and this number is expected to double in the next few decades. Life expectancy is increasing, and so are the financial responsibilities of living longer.
Living longer means retirement savings plans need to last longer.
It means higher medical costs for longer periods of time.
It means less money is left after death to pay unpaid medical bills, funeral expenses and other final costs.
Seniors with large estates have another concern: Estate taxes as high as 40 percent that survivors would need to pay.
While replacing income from employment may be a lesser concern for seniors, life insurance can help protect a pension fund for a surviving spouse.
A pension maximization plan uses a small percentage of a current pension income to pay for a life insurance policy, which upon death could replace the income from the pension for the survivor.
Finally, a senior may have plans to leave a gift to family members or to a charity, and life insurance coverage could make that possible, creating a lasting legacy for years to come.
Knowing which of these categories you or your loved one falls into matters.
The type of plan you purchase and the kind of value you’re seeking depends largely on why you want coverage in the first place.
Getting the Most Value Out Of A Senior’s Life Insurance Plan
No matter what kind of plan you need, first make sure you’re getting the best value possible.
Value means you’ll get the most bang for your buck while finding a solution in the most efficient manner.
If burial costs are your main concern, the solution is relatively simple. You need a burial life insurance policy, also called a burial insurance plan, and you want to pay as little as you can.
However, even this comes with a few caveats:
- Is the policy you’re buying guaranteed to never lapse, as long as you pay your premiums?
- Will the policy pay out immediately, or is there a waiting period (or graded benefit)?
- Is your health going to be an issue in obtaining the most affordable policy?
- How will your current age affect your ability to buy life insurance?
These are important questions to ask because you don’t want to outlive your policy, die before you’re eligible for benefits, or miss the opportunity to buy because of health or age.
There is almost always some kind of life insurance available. Before buying it, make sure it’s worth buying.
Price (Premiums)
Price is the most obvious factor most seniors consider when buying their life insurance.
Ideally, a policy needs to be affordable, and the idea is to pay the least amount of premium for the most death benefit, up to your needs.
The first constraint to price is budget.
No matter how much you can get approved for, or how much leverage you can create, if it’s beyond your budget, it’s a poor purchase.
Eventually, you won’t be able to maintain the premiums, and if you don’t die before then, you’ll be left with no coverage, and no money.
In this scenario, a self-funded account would be best.
The next thing to consider is the premium to benefit ratio.
In other words, for every dollar you put in, how many dollars will you get out?
The question never has an exact answer, because you don’t know the exact date you’ll pass away, but using common sense and basic math should allow an educated decision.
For example, if you could buy a $25,000 burial policy for $10 a month or a $30,000 for $35 month, which one has a better value?
The first policy. Even though it’s $5,000 less in coverage, you’re paying less than a third of the premium.
It’s a much better leverage, regardless of when you die.
Efficiency
For life insurance, efficiency means how well you’re transferring today’s dollars to their final destination.
Life insurance, and its many different types, are all simply financial vehicles to move money you have now to a beneficiary or heir at some point in the future.
However, not all life insurance policies have the same efficiency in creating future value.
Let’s walk through an example:
Peter and his wife, Glenda, have $25,000 earmarked for their children upon their death. However, Glenda discovered they could potentially create a larger benefit by utilizing life insurance. She contacted a few knowledgeable agents and she has two options:
- Buy two life insurance policies, one on Peter and one on Glenda.
- Buy a single life insurance policy that covers both Peter and Glenda but which pays only after both are deceased.
In this scenario, the second option is the better choice, because utilizing a second-to-die life insurance policy, called a survivorship policy, allows the cost of insurance to be spread over two lives, not one, reducing the overall risk of an earlier payout by the insurance company.
The survivorship policy is more efficient than two policies purchased separately.
Understanding the many different types of policies is imperative!
Because of the higher likelihood of buying for permanence, life insurance for senior citizens should aim to meet as many criteria as possible before you apply.
Types of Life Insurance Available to Seniors
When you know the reason you need life insurance, and you understand what kind of value you’re seeking, it’s time to find a policy that meets your needs.
Generally speaking, these are the three kinds of insurance seniors should buy:
- Guaranteed Universal Life
- Survivorship Life
- Guaranteed Acceptance Life
These three have something in common: they are permanent life insurance contracts.
As long as you maintain your premiums, you will have coverage in place.
Even so, each one is strikingly different from the next and will be suitable in different ways. Let’s break them down.
Guaranteed Universal Life for Seniors
If you can qualify based on your age and health, a guaranteed universal life insurance policy (GUL) offers permanent coverage for the lowest cost.
This product meet your benefits needs, and you can customize it for a wide range of budgets.
A guaranteed universal policy gains cash value at first, like a whole life policy, but it uses the accrued value to offset the premium increases that result as time passes.
A whole life insurance policy continues to gain cash value in all policy years, but the value comes from higher premiums you pay.
When buying guaranteed universal, be certain about your guarantees.
Not all policies guarantee coverage regardless of market conditions, interest rates, and other risks which could cause your policy to “implode” due to external factors.
A guaranteed universal policy is excellent in several other ways, including:
- Flexible Premiums – some policies allow some flexibility in paying premiums, so even if you’re late on a payment, you don’t lose your coverage or its guarantees.
- Flexible Benefits – some policies allow you to extend the guarantee to age 90, or all the way to age 121. The longer the guarantee, the higher the premium.
- Flexible Growth – depending on the type of guaranteed universal policy you choose, you might even have the option to attempt more aggressive value growth, though this feature can limit your guarantees.
If you are looking for lifelong coverage at the most affordable rate, and you’re healthy enough to qualify, guaranteed universal life insurance will meet the majority of your needs.
Survivorship Life Insurance (Second-to-Die)
For senior couples, a survivorship life insurance policy is one of the most effective products for more advanced financial planning and planned giving scenarios.
A survivorship policy provides permanent coverage, but it pays only when both insureds have passed away.
This allows a lower level of risk from the carrier to pay out sooner than expected, which results in lower costs for you, the buyer.
However, the policy must be set up properly, with help from financial advisors, estate planning lawyers, accountants or other experts.
The policy might also require a trust, for example, and not the insureds to own the policy.
Guaranteed Acceptance Life Insurance
A guaranteed acceptance life insurance policy should be your last resort.
They are the most expensive type of life insurance on the market today.
So, why include on our list of recommendations?
Two reasons:
- Low Coverage Amounts
- You Can’t Be Turned Down
For many, a small death benefit, like $5,000 to $25,000, is all you need.
For amounts this low, few carriers require much underwriting, if any, and can stay competitive on pricing.
In fact, a lot of carriers won’t offer a fully underwritten option on death benefits below $25,000.
Also, if your health (or even your age) makes you ineligible for a cheaper product, this is your only option.
In addition, these policies also pay out on a modified schedule, meaning they may pay only a small portion, or none at all, until a certain period of time has passed.
For example, here is what a graded payout may look like:
- First 364 Days – No Payout
- Year 2 – 45% Payout
- Year 3 – 75% Payout
- Year 4 and After – Full Payout
Explore all options before opting for a guaranteed acceptance policy.
Wait, What About Term Life Insurance for Seniors?
People often ask why we don’t recommend a level term life policy for seniors.
There are certain scenarios where we may suggest a term policy for someone over 60, but they are not common because a senior seeking coverage almost always needs to solve a long-term financial need.
Term will address only a short-term need.
Here are situations in which a senior may need to consider term life:
- Pre-Retirement Income. If you’re still working but will retire in a few years, you may want a term policy to protect the last few years of your income to make sure your spouse doesn’t lose the opportunity to retire on schedule if you died unexpectedly.
- Mortgage Pay-Off. If you’ve still got a mortgage and you’re confident it’s the last residence you’ll have, a term policy could protect your mortgage so your spouse could pay off the policy if you died.
- Large Medical Bills. Some health conditions can raise large amounts of debt very quickly. In this case, getting approved for term life may be tough, yet it could provide peace of mind to know a surviving spouse wouldn’t be left with a painful reminder in the form of a bill for the rest of his or her life.
Other than these three, there are few scenarios in which a term policy can resolve a short-term obligation.
While a term life insurance policy is cheaper, per thousand, they don’t provide the long-term benefits of permanent insurance.
In addition, the life insurance carriers who offer term coverage to those in the upper age brackets restrict how long the policy can stay in force. A 67-year-old man can’t purchase a 30-year term policy.
A 10-year term is much more likely, so any need beyond 10 years would be unmet unless the primary insured passed away before the policy ended.
What About Whole Life, Then?
In the past, a universal life policy didn’t have the guarantees it does now.
In fact, poorly structured universal policies from the late 1980’s are notorious for their implosions because they were set up in an interest rate environment that no longer exists.
They were set up to take in less premium because more growth was expected.
Universal policies aren’t set up in this way anymore.
Because of the current low interest rate environment, and new regulations, carriers and their agents are more respectful of guideline premiums, or the minimums required to keep the guaranteed death benefit intact.
Whole life is simply becoming an outdated product.
Old, established policies are still great to hold onto, though establishing a new one is less often the best option.
Do You Need to Consider Any Riders?
Riders can be a little confusing, but they are important and provide great benefits, so we need to take a minute to see if a life insurance rider is worth adding to your policy.
When you buy a car, do you buy the base model to save money, or do you like adding upgrades such as power windows, power locks, or heated seats?
This is how a rider works, too.
It’s an upgraded benefit on top of the death benefit.
Life insurance riders for seniors should aim to add accessibility, or provide an additional, non-life insurance type of benefit. Otherwise, it’s probably not worth adding.
Here are benefits seniors might actually use:
- Accelerated Death Benefit Rider
- Critical Illness Rider
- Waiver of Premium Rider
There are hundreds of riders out there, but most are not crafted for seniors.
However, these three are definitely worth looking into. Let’s discuss each one.
Accelerated Death Benefit
Cost: Usually Free!
The accelerated death benefit rider does what the name says. It will accelerate a portion of the death benefit, even when you’re still alive.
You can’t access the benefit at will. To trigger this rider, you will need to submit proof of a terminal illness, a condition which has declared you have 12 to 24 months, or less, to live.
Your accelerated death benefit could pay for:
- Medical Bills. Rather than letting bills continue to increase and gather interest, it might be advantageous to pay them down sooner than later.
- Experimental Treatment. You could attempt an experimental treatment that your medical insurance won’t pay for and you couldn’t otherwise afford. There are cases where a terminal patient has used this benefit and survived many years after their terminal diagnosis.
- Experiences. Sometimes a final family vacation or reunion is a great way to create some long-lasting memories.
Even though it tends to be free, you still must opt in to the rider because some long-term care plans will delay benefits until the insured utilizes this provision.
These long-term plans will require you to spend any assets you have, which might include accessible death benefits, before it activates.
Critical Illness
Cost: $$$
A critical illness rider is especially useful for seniors, as it’s the demographic most affected by critical illnesses.
However, the rider can become cost prohibitive for some.
Often confused with the accelerated death benefit rider, there is a subtle difference: The critical illness rider advances a portion of the death benefit to you, but you don’t have to have a terminal illness.
If you had a stroke or were diagnosed with cancer, for example, you may have higher chances of survival, but hefty medical bills still follow, and you could activate the critical illness rider to help pay.
The main issue with this rider is cost.
In a way, the rider requires insurers to mix life and health insurance together in one policy, which makes it harder for companies to offer a critical illness rider at a competitive price.
Waiver of Premium
Cost: $$
The waiver of premium rider allows you to stop paying your premiums in the event of a disability.
While you’re disabled, the insurance company pays the premiums for you, and you resume the costs once the disability ceases. Age is a factor in the cost of this rider.
Also, your health profile when you apply factors into your eligibility for a waiver of premium rider. You could get approved for your policy yet turned down for this rider.
It’s also not available for all policy types, so ask about its availability if you’re interested.
Should You Use An Agent Or Go Direct To A Carrier?
You won’t always be able to choose whether to deal with an agent or directly with a carrier, but you can always find an independent agent who doesn’t work for a single carrier and can help you find the right policy regardless of carrier.
Here are your choices as you progress through the buying process:
- Independent Agent
- Captive Agent
- Carrier
The independent agent is always your best choice, hands down.
An independent agent (like us) can be licensed in all 50 states, and be appointed with virtually any life insurance company necessary.
Often called brokers, they can match you with pretty much any product from any carrier.
A captive agent is employed by a single company.
Work with a captive agent only if you know for sure the company they represent has the product you need.
While this scenario is rare, it does exist for products offered by some of the major mutual companies.
Working with the carrier means you don’t work with an agent but directly with the insurance company. Most carriers don’t offer this buying path.
Instead, they have call centers with agents or they use independent agents across the country to offer their products for them.
Independent agents arrange most policy purchases, and this makes sense because an independent agent offers choice.
If you go to a captive agent or an individual carrier, you can get only what they offer, and nothing else.
Therefore, we always recommend an independent agent or agency to start. There’s no reason to limit your options to a single company or to spend months researching your options when an independent agent can do that work for you.
A good agent will present all your choices and allow you to choose what’s best.
Ask your agent to present you with options based on price, company rating, and cash value growth. Let them do the leg work for you.
If, for some reason, the independent agent can’t meet your needs, you can always default back to the single agent or carrier as a last resort.
The Application Process (And How To Speed It Up)
When you’ve found what you want and it meets your needs, it’s time to apply.
Here are the steps, in order:
- Application
- Phone Interview
- Database Checks
- Medical Exam
- Medical Record Requests
- Underwriting
- Approval Decision
- Acceptance/Refusal
Application
The application itself will vary based on product type and company choice. Though applications seek most of the same information from you, they may ask questions differently.
The application will always begin with basic contact information, your chosen beneficiary information, and the details of the policy you are applying for (amount, duration, type).
NOTE: A guaranteed acceptance policy may stop here because the application considers age without regard to health or underwriting. No medical exam is needed, and no records are requested. There are no health questions to answer. The application and payment information are all the company needs.
Once the first portion is complete, medical questions are next. The number of questions and the amount of detail required is based largely on the carrier and policy type.
The more questions you can answer “No” to, the better.
The fewer questions you answer, the less the insurance company knows. The less they know, the more you’ll pay because the company considers you a higher risk.
Phone Interview
While not always required, a phone interview may replace or supplement your medical questions.
Sometimes the questions can be asked directly by your agent; however, other situations may require the company to call and ask you directly.
A phone interview tends to take 15 to 20 minutes, and it’s used to clarify or go into greater depth on several health-, occupation-, or criminal-related questions.
If you answered “Yes” somewhere on the application or during your interview, more questions on the topic will be asked.
For example, let’s say you said “Yes” to having diabetes.
Follow-up questions would help the company determine what type, how long you’ve had it, what kind of medication or insulin you take, what your current numbers are, and more.
The company needs to know as much as it can to assess the risk your health condition presents.
An interview also gives you a chance to clarify information. Errors do happen, so this is your chance to let your agent or underwriter know about inaccuracies.
Database Checks
After you have completed, signed, and turned in your application, the insurance company will consult external databases for more information.
These are the databases:
- MIB (Medical Information Bureau)
- Rx (Prescription Database Check)
- MVR (Motor Vehicle Record)
Occasionally, information in these databases tells the insurance company to stop the application process immediately.
Let’s say, for example, an applicant’s motor vehicle records reveal several DUIs and a couple speeding tickets.
Many carriers would discontinue the application right away since this information is consistent with risky behavior.
However, the company is not looking to deny you.
They want to approve you, but you have to fit within an acceptable amount of risk.
If one of these databases reveals too much risk, it’s a way for the company to avoid going through the rest of the process, which can be expensive and time consuming, only to find out they wouldn’t haven’t approved the applicant anyway.
Medical Exam
While the database checks are under way, you’ll be asked to schedule your medical exam (if required). The medical exam involves several vital pieces of information for the insurance company to evaluate.
They include information from:
- Height and Weight (BMI) Measurement
- Blood Pressure Check
- Blood Sample
- Urine Sample
- EKG*
Medical exams are completed by a disinterested, third-party exam company.
The agent or company who helped you complete your application or phone interview can schedule the exam for you, or the exam company will contact you to schedule.
The typical exam lasts about 20 minutes. The examiner measures your height and weight, takes your blood pressure (an average of 3), takes a blood sample, and collects urine for a urinalysis.
Many seniors may be required to complete an on-the-spot EKG if the death benefit amount requires it.
Depending on your health history, an EKG could be requested regardless of standard requirements.
If you chose a simplified issue (no exam) policy, or applied for a graded/guaranteed product, you won’t be required to complete this step.
Medical Records Requests
The insurance company will seek your medical records from your doctor(s). You will rarely need to do anything for this step.
An APS, or attending physician’s statement, will be needed to verify your health.
They may be ordered from your primary care physician, specialists, gynecologist, or any other type of medical professional you’ve seen.
If you visited a hospital recently, they could also request information from there.
You may need to intervene only if your doctor hasn’t sent the files.
Insurers ask physicians’ offices to provide information within a specific time frame, but some offices take longer to respond. Some offices respond to requests once a month.
If you need records faster, you may need to call your doctor to have them expedited, if possible.
This is especially important when you need to be approved in a certain amount of time.
Underwriting
The all-important underwriting process begins only when all information has been obtained from each step above, when required.
No exam, simplified-issue policies move so quickly because they skip all the steps above (database checks may still be run, but happen very quickly).
As the underwriter moves through the files and finds information that needs clarification, they can hold the decision until more information is obtained.
They may need a simple clarification or another attending physician’s statement from a specialist they come across in your records.
If you’ve drafted a cover letter, which we recommend, this is when they’ll read it.
Each company has its own guidelines on how they approve a senior for life insurance, but for the most part, they are similar.
Details matter. One company might look at your BMI and give you a Sub-Standard rate, where it’s good enough for Standard from another company.
Approval Decision
Once every bit of information has been assessed, the underwriter will give a rating and either make an offer, a postponement, or a decline.
If the underwriter makes an offer, it’s on a scale which would typically read like the following, from best to worst:
- Preferred Plus
- Preferred
- Standard Plus
- Standard
- Sub-Standard, Table (1 – 10)
This assumes a non-smoker classification. Smokers will differ slightly, usually only having Select Smoker and Standard Smoker, with the additional Sub-Standard ratings.
All rates above Standard are considered discounted rates, with Preferred Plus being the best life insurance quotes you can get, and Standard is usually what is referred to as the base premium.
Most applicants are approved around Standard.
If you were approved at a Sub-Standard rate, each additional Table is 25 percent more premium than the base premium (Standard). A Table 2 would be 50 percent more, a Table 3 would be 75 percent more, and so on.
If the underwriter postpones your application, it’s different than a full decline.
It simply means you may be accepted at a future point, but based on your current information, you present too much risk or there is an undefined amount of risk for the carrier.
As an example, some carriers won’t approve you until at least 5 years after certain types of cardiovascular disease because of the ongoing risk of re-occurrence.
Another might be a postpone due to a DUI, or other type of infraction, where carriers may want to see up to 10 years pass since dismissal of the incident.
Finally, if the carrier is sure you’re simply too much risk, you will be declined.
In some cases, you can apply to another carrier who will see it differently, though it’s not always the case. At this point, you may need to move towards a graded or guaranteed type of choice, where underwriting is more relaxed.
Acceptance/Refusal
If you are approved, you have several options. Remember, it’s an offer, so there may choices for you to make moving forward.
Here are some:
- Accept – If you’re pleased with your rating, you can accept. You’ll be asked to sign an illustration, showing you see exactly what to expect in the future as years pass, and you’ll be asked to begin making premium payments.
- Reconsideration – If you think you deserve a better rate, you can ask for a reconsideration. However, you have to bring new information to the table, so to speak, or the underwriter’s decision can’t be changed. You can’t simply ask for a reconsideration because you don’t like your rating.
- Refusal – If you simply don’t want the policy, for whatever reason, you can say no. If you’ve paid any premiums up to this point, you’ll be refunded.
There is one other choice, though it’s not as simple. It’s called a policy modification.
Let’s say you were approved, but at a much more expensive rate than you could afford. If you still valued the coverage, though, you could modify the policy details (death benefit amount, or coverage duration) to lower the premium.
If you request a policy modification, you can only decrease benefits, not increase them.
If you did need to increase for some reason, you may be required to submit additional documentation or go through more underwriting procedures.
Sample Life Insurance Rates For Seniors
Sometimes it’s hard to know what to expect, price wise.
A senior life insurance plan, by default, will be more expensive than a younger person’s, because life insurance rates are based largely on age.
The older a person is, the more expensive they will be to insure, per thousand.
Here are just a few sample life insurance prices for seniors based on different policy types.
10 Year Term Life Insurance Rates For Seniors
| 50 | 55 | 60 | 65 | 70 | 75 | |
|---|---|---|---|---|---|---|
| $25,000 | $11.35 | $15.69 | $23.24 | $38.74 | $65.62 | $110.36 |
| $50,000 | $19.44 | $26.64 | $37.80 | $59.40 | $100.80 | $168.30 |
| $75,000 | $26.01 | $36.81 | $53.55 | $85.95 | $148.05 | $249.30 |
| $100,000 | $23.95 | $33.49 | $50.60 | $86.79 | $143.90 | $265.73 |
| $250,000 | $48.78 | $73.19 | $118.14 | $187.83 | $325.37 | $622.93 |
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Your eyes are not deceiving you when you see some of the premiums for $100,000 in coverage being cheaper than $75,000.
There are price breaks as certain levels, and a $100,000 death benefit is one of those, as is the $250,000 mark.
If you find yourself looking for an odd amount, like $90,000, have your agent run the numbers for $100,000 as well, because it might actually be cheaper to get more death benefit.
Remember, for this type of policy, the premium is guaranteed to stay the same for only 120 months.
Universal Life to 90 Rates
| 50 | 55 | 60 | 65 | 70 | 75 | |
|---|---|---|---|---|---|---|
| $25,000 | none | none | none | none | none | none |
| $50,000 | $63.85 | $76.31 | $91.45 | $117.73 | $151.99 | $201.11 |
| $75,000 | $95.78 | $114.46 | $137.17 | $176.59 | $227.98 | $301.67 |
| $100,000 | $106.42 | $127.17 | $152.41 | $196.21 | $253.31 | $335.19 |
| $250,000 | $236.13 | $290.63 | $367.19 | $470.16 | $611.82 | $761.81 |
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If a permanent policy is out of your budget, but you still need more than a 10 year term policy, check out a Term-to-90, or Universal Life to 90 option.
As the name implies, it’s a level death benefit and level premium until age 90, regardless of how old you are currently.
Someone who is 50 or 55 is a lot less likely to need this type of coverage, since duration term would probably be cheaper, but if you are 65 to 75 and need more than 10 years of death benefit, it’s a consideration.
Guaranteed Universal Life Rates (to age 121)
| 50 | 55 | 60 | 65 | 70 | 75 | |
|---|---|---|---|---|---|---|
| $25,000 | $37.64 | $43.77 | $60.92 | $73.37 | $105.99 | $139.29 |
| $50,000 | $75.27 | $87.53 | $118.47 | $158.77 | $216.95 | $278.58 |
| $75,000 | $115.78 | $131.29 | $177.70 | $220.11 | $325.42 | $417.88 |
| $100,000 | $117.08 | $142.58 | $182.42 | $239.42 | $319.33 | $432.75 |
| $250,000 | $263.13 | $325.63 | $422.08 | $559.17 | $750.83 | $1,022.29 |
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You’ll notice a couple points of difference from the UL90 to the UL121.
First, there are more options for smaller death benefits. On a longer timeline, the life insurance company can better price its products because the company knows it will pay out at some point.
The lesser duration bring more variables.
You’ll also note the price increase.
Obviously, the longer duration you elect, the higher the price will be. With guaranteed universal life the company is guaranteed to have to payout, as long as the applicant keeps paying, so they can price accordingly.
This is also helpful for you, the buyer, because you can see exactly how much you’d pay over a period of time and know what to expect for a payout at any age.
Burial Life Insurance For Seniors (Level Policy)
| 50 | 55 | 60 | 65 | 70 | 75 | |
|---|---|---|---|---|---|---|
| $10,000 | $24.03 | $27.75 | $35.79 | $47.66 | $61.18 | $83.39 |
| $20,000 | $45.51 | $52.96 | $69.04 | $92.77 | $119.82 | $164.24 |
| $30,000 | $66.99 | $78.16 | $102.28 | $137.88 | $178.45 | $245.08 |
| $40,000 | $92.25 | $118.81 | $145.99 | $189.52 | $250.32 | $388.50 |
| $50,000 | $114.23 | $147.42 | $181.40 | $235.81 | $311.81 | $493.94 |
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These level benefit plans are permanent plans with a mix of straight and graded whole life options.
In other words, there is still some amount of underwriting involved to get approved for this level of insurance.
The main difference between these and the universal life choices are the lower face amounts, especially below the $25,000 threshold.
If you are relatively healthy, need $25,000 or less of permanent coverage, and don’t want to pay the higher premiums of guaranteed coverage, this is what you’ll want.
Guaranteed Acceptance Life Insurance Rates
| 50 | 55 | 60 | 65 | 70 | 75 | |
|---|---|---|---|---|---|---|
| $5,000 | $19.66 | $23.51 | $28.78 | $34.60 | $44.41 | $62.79 |
| $10,000 | $38.41 | $46.11 | $56.65 | $68.29 | $87.91 | $124.49 |
| $15,000 | $57.15 | $68.70 | $84.52 | $101.98 | $131.40 | $185.74 |
| $20,000 | $75.90 | $91.30 | $112.38 | $135.67 | $174.90 | $246.98 |
| $25,000 | $94.65 | $113.90 | $140.25 | $169.35 | $218.39 | $308.23 |
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Finally, the chart above hosts sample guaranteed acceptance life insurance rates for seniors with plans ranging from $5,000 up to $25,000.
You’d be hard pressed to find a single guaranteed policy over the $25,000 death benefit, but you can get more than one (each from different companies).
As mentioned previously, these policies are last resort.
The premiums are the highest, per thousand, and the death benefit is not fully available in the first few policy years.
However, if you have poor health, this may be your only chance to get coverage.
Having seen the prices from all the different options above, you can see why selecting the right policy from the beginning can weed out a lot of confusing charts of numbers.
Once you narrow down the most suitable coverage option, you can avoid having to pick and choose from such a wide variety of premiums.
*All rates are monthly, based on a male at Standard ratings. Rates shown are based on many different carriers at the time of publishing this page, and are not an offer for life insurance. Final rates subject to underwriting by issuing life insurance company.
Advanced Planning for Seniors Using Life Insurance
Seniors and their advisors can address long-term financial problems by using life insurance as a financial instrument.
Other times, it’s simply a way to create immediate leverage where another financial product can’t.
When we refer to advanced planning using life insurance, we are no longer talking about term life insurance or final expense insurance.
Instead, universal life and whole life become our major focus because of their cash value components and permanent death benefits.
Again, here are the situations where it makes sense:
- Pension Maximization Plans
- Creating A Legacy
- Charitable Giving
- Estate Tax Planning
There are others, but we’ll focus on these four, for now.
Pension Maximization Plans
Pensions are a source of income for many retired seniors. Although they aren’t quite as common as they used to be, some occupations still offer pensions.
Pensions allow you to choose how to withdraw money over time, but once elected, you typically can’t change your plan.
Here are two such options:
- Life Only – this payment election allows the recipient to receive the highest benefit amount per month (or annually, if chosen), but the benefit ends when the recipient dies.
- Survivorship – this payment election offers the recipient and his or her survivor a payment spanning both their lives, but because it will pay out until both pass, the monthly payment is lower than Life Only.
Should you take the higher amount and hope to live a very long time to “get your money’s worth” for both you and your spouse?
Or do you take the lesser amount with the added security of never leaving your surviving spouse without an income?
Enter, pension max with life insurance.
Here’s how it works:
The retiree chooses the Life Only option to receive the highest possible income level, then uses part of that income to pay for a permanent life policy on the pension recipient.
The key to success is the cost of the life insurance.
A pension max plan can work only if the cost of the life insurance is less than the difference of the Life Only election and the Survivorship election.
In addition, the life insurance policy purchased needs to be big enough to offer the surviving spouse and equal or greater income, once annuitized.
Ideally, the couple would then receive a greater amount than the Survivorship election, yet still have the security of a guaranteed income spanning both lives.
Creating A Legacy
Many seniors simply want to pass along their remaining assets to loved ones or friends when they die.
When the assets are liquid, they can be leveraged especially well using a life insurance policy.
There are two key elements to this working:
- In most situations, a life insurance payout is significantly more than a person put in.
- Life insurance payouts are tax free.
When a senior has a particularly large amount of assets to pass down, these become increasingly important, especially the tax element.
For example, money invested in CDs would be treated differently than money received from life insurance, even if it was the same amount, strictly because of taxation.
Money already earmarked for a certain person or establishment may be better utilized within a life insurance plan because it could not only produce more of a benefit, but the taxability could be more favorable to the heir.
Charitable Giving
Throughout their lives, many find a charitable organization, a university, a hospital or other philanthropic group they want to support.
Not only does it aid those groups in their missions, but it can also be tax deductible for the benefactor.
While charities can accept many different forms of aid, monetary gifts are still the most common way to donate.
Since life insurance focuses on leverage, it can be a logical method to arrange a gift.
If you are willing to transfer ownership of a life insurance policy in your name to the charity of your choice, and simultaneously name the charity as the beneficiary, you would not only be eligible for a tax deduction now but also on future payments you make into the policy as premiums.
On the back end, the charity would still receive the death benefit tax free.
You keep a tax deduction, and the charity receives more than the amount you donated because of leverage.
That’s a win-win-win.
Estate Tax Planning
Families with a large estate need special kinds of planning if they want to pass their estate to their heirs in a tax efficient manner.
Taxes under our current laws aren’t assessed to an estate until it reaches nearly $5.5 million in size, so you are exempt from this type of planning up to this point.
But once reached, any value, liquid or not, within an estate can be charged a very high tax rate when the owner of the estate dies.
Again, for the power of leverage and the tax free nature of death benefits from life insurance, there are several ways a life insurance policy becomes a solution to long term efficiency needs.
If the estate is not liquid, for example, the beneficiaries would either need to find the funds to pay the taxes due, or sell off the assets to make the payments.
Instead, life insurance could absolve the issue by creating the liquid cash needed so the assets wouldn’t need to be sold at a discount just to pay taxes.
Estate planning with life insurance requires more hands than your own, and it will require a life insurance agent, tax lawyer or estate planning lawyer, accountant, and potentially more parties.
This is to ensure everything is set up legally and properly to ensure maximum benefits.
In addition, there are situations where the intent is not just a single generation, but multi-generational.
In others, businesses are passed down, not just traditional assets, meaning there are more considerations to be made.
No matter the scenario you find yourself in, if you require some type of advanced financial planning with life insurance, due diligence is a must.
Talk to financial professionals you trust, and educate yourself as much as you can before you make a decision.
Closing Thoughts
There are many, many things to consider when buying life insurance as a senior.
As our lives get more complex, so do our financial plans and insurance needs.
But you are not alone.
We are here to help you understand your options and choose the path which benefits you the most, now and later.
Remember, focus on these things:
- Value
- Product Type
- Company Selection
If you satisfy these few items, you’ll find the process much more linear, and a lot less complex.