Does Term Life Insurance for Seniors Make Sense?

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Term life insurance for seniors over 60 is an affordable option to provide for your loved ones in the event of your untimely death.

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No one can predict how long they will live. Your own mortality may be a subject you don't really want to think about, but it is necessary, especially if you have loved ones who need financial support or who will have to take care of your debts and other expenses after you're gone.

Life insurance can help provide your family with the financial protection they need should something happen to you. You are never too young or too old, for life insurance. However, your age plays a big factor in what type of life insurance is best for you and what your premiums will cost.

There are two main types of life insurance: term life insurance and whole life insurance. Let's look at the best life insurance for seniors over 60.

What is term life insurance?

Term life insurance is a type of policy that helps protect you for a period of time, or term, typically from five to 30 years. If death occurs during the policy's term, your beneficiary or beneficiaries are paid. But if the term life insurance period expires before your death, your money is not returned even if no claim was filed, and continuing coverage through a new policy at your previous rate is not guaranteed.

Term life insurance is often more affordable than whole life insurance because it covers a limited length of time. But, it may not be the best policy if you are looking for lifelong coverage.

Is term life insurance good for seniors?

Term life insurance may be a good option for healthy seniors under age 81 who want to save money on their life insurance premiums. With term life insurance, you can choose coverage for 10, 15, 20, or 30 years. You also may have the option of converting a term life insurance policy into a permanent whole life policy when it comes to the end of the coverage term.

However, if you have existing medical conditions or are over age 80, then you most likely will not qualify for term life insurance coverage. Most term life insurance policies require you to pass a medical exam to be eligible for coverage.

Mutual of Omaha provides a handy life insurance calculator that can help you figure out your life insurance needs based on your income, your savings and investments, and your expenses.

What happens if you never use your term life insurance?

In the event that you never use your term life insurance, and its term expires before your death, then you lose that coverage and the money you spent on it. So, if you die after the policy expires, your beneficiaries don't receive any death benefits. And the money you had invested over the term is gone, unless you have a return-of-premium rider on the policy, which would enable you to recoup what you paid in premiums throughout the policy term.

At what age can you no longer get term life insurance?

You may be able to get term life insurance in your 60s and 70s if you are in good health. However, the term length of coverage may be limited to only about 10 years. Your eligibility for a term life insurance policy can vary depending on the insurance provider. Several insurers won't provide term life insurance to seniors age 75 and older.

If you've been denied term life insurance because of your age and you're worried about your family being able to afford your funeral expenses, another option to consider is final expenses life insurance. Final expenses insurance will help cover your funeral expenses and burial costs.

What factors impact the price of term life insurance?

Age is one of the biggest factors impacting the price of life insurance. Other factors that may increase what you pay for life insurance include:

Term vs. whole: What is the best life insurance for seniors?

While term life insurance may be less expensive, whole life insurance policy may be the better life insurance choice for seniors over 60. There are typically no health exam requirements for whole life insurance coverage and you can apply for coverage up until you are almost 90 years old.

Whole life insurance is typically more expensive than term life insurance. However, if you get a whole life policy when you are in your 30s or 40s and the cost of premiums is lower, that premium will never increase throughout the life of the policy.

What is whole life insurance?

Whole life insurance is a type of permanent life insurance. It provides coverage for the insured's entire life, as long as premiums are paid on time. Whole life insurance has three main elements: a death benefit, cash value, and premiums.

Whole life policies typically last for the life of the policyholder and pay benefits regardless of when death occurs. Whole life insurance also offers stability, with premiums guaranteed not to increase and a benefit guaranteed to be paid to your named beneficiaries when you die.

Some whole life insurance policies can even accumulate potential cash value that grows on a tax-deferred basis. These policies can distribute payouts in the form of a loan for monetary needs that might come up for you or your loved ones while you are still alive. But it’s important to remember that these loans will reduce the policy benefit to be paid when you die.

Universal life insurance

Universal life insurance is permanent, long-term coverage, like whole-life insurance. But with universal life insurance you have more flexibility in adjusting your policy and premiums. However, it may not be the best life insurance for seniors because you'll be required to get a medical exam for coverage and death benefits aren't guaranteed with universal life insurance.

Term life insurance for seniors: the bottom line

Term life insurance may not be the best choice for seniors over 60. While it may save you money on premiums, you may not be eligible for insurance coverage if you are in your 80s or have health issues. Plus, there are no guarantees that the policy will pay your beneficiaries if you die after the policy expires.

Whole life insurance, though it tends to come at a substantially higher cost, may be a better option for seniors over 60 as it promises you lifetime coverage and a guaranteed payout, often with no medical exam required.

Mutual of Omaha offers term life insurance, whole life insurance and universal life insurance coverage. Our trusted agents can work with you to find the best life insurance policy you need at every stage of your life.