Is Life Insurance Worth It For the Elderly?

Written by Kim Wilhelm

Verified!  See guidelines

Verified!  See our editorial guidelines

Last Updated 21 May 2024

Life insurance policies are generally targeted to the younger segment of the population, making seniors feel it’s beyond their reach or not for them. 

But that’s not always the case. 

There are life insurance companies that specialize in life insurance  coverage to senior citizens, too.

 And you can find options that suit your needs and budget if you know where to look and how to choose the right policy.

In this article, we break down various life insurance policy options and their key benefits to help seniors decide which one is right for them.

Life Insurance Policy Options for Seniors

Choosing the right kind of life insurance policy requires considering all the different factors that can impact its premiums as well as your budget and financial goals.
The stage of life you’re at and what you’re looking to get coverage for with the insurance money can (and should) influence your choice. 
However, you should know the available options to determine the best product for your needs. 
In general, there are 4 types of life insurance policies available for seniors: 

Term Life Insurance

Term life insurance, as the name suggests, is for a specific term. 

And while it may seem like an ideal option at an older age, this policy comes with strings attached to it. 

Term life insurance terminates when you outlive your policy period. In other words, it only pays the benefit if you die during its term.

This means if you’ve bought a 10-year term life insurance policy, your family will only get the death benefit if you die within those ten years. If you remain alive for the whole policy term, your insurance coverage will end.

Additionally, the older you are, the less amount of term insurance coverage you will be eligible for.

There are several term life insurance options available for seniors; however, they can all be grouped into three key categories:

Level-Term:

These are the policies that offer the same benefits throughout the term. 

Level-Term with Increasing Premiums:

These are the policies that offer the same benefits throughout the term; however, the monthly premiums increase each 5 years of the policy term. 

Decreasing-Term:

These are term policies where the monthly premium stays the same, but as you age, the death benefit amount reduces until the policy terminates at a certain age. 

Because term insurance generally has lower premiums, it is much harder to qualify for medically. Unfortunately, because of this, many seniors will not be eligible for this type of coverage.

Whole Life Insurance

Whole life insurance policies offer lifelong coverage. 

It pays the benefits whenever the policyholder dies. 

This means you’ll have to continue paying the premiums throughout your life to keep the policy active

Whole life insurance is bought with the intent of protecting your family until you die and it has a fixed monthly premium that never change.

Whole life generally has higher premiums than term, because the protection is available for life.

Whole life insurance policies accumulate cash value over time, which can be made available as cash loans when needed by the policy owner.

However, these loans must be returned within the policyholder’s life. 

Otherwise, it will be deducted from the total coverage amount at the time of payout, which can potentially cause a financial crunch for families depending on the insurance money to cover certain expenses.

Guaranteed Universal Life Insurance

Guaranteed Universal Life Insurance is a cross between term and whole life insurance. It offers certain distinctive benefits as well. 

Similar to term insurance, you can choose the term you want the policy for, and, like whole life insurance, this policy offers guaranteed payouts (as evident from the name). 

What makes guaranteed universal life insurance different is that this type of insurance offers more flexibility. 

The flexibility in guaranteed universal life insurance comes in the form of liberty in choosing the term and paying premiums. 

There are no fixed premiums, and you also have the liberty to choose when you want to pay the premiums. 

This makes guaranteed universal life insurance a great option for people who can’t pay fixed premiums every month or so. 

With this flexibility, it’s important to understand that it may put you at the risk of not funding the policy enough, leading to its nullification. 

Moreover, if you do not make frequent payments in the initial years, the cost to keep the policy adequately funded and alive will increase, which can potentially create a financial burden.

Guaranteed universal life insurance will almost always requires a medical exam.

Final Expense Insurance

The last life insurance option for seniors is final expense insurance! 

Also known as burial insurance or funeral insurance, this is a type of whole-life insurance meant to cover your final (end-of-life) or funeral expenses. 

Final expense insurance comes with a fixed monthly premium and death benefit that remains the same as long as the premiums are paid. 

Since the death benefits are usually smaller, just to cover funeral and other final expenses, the premiums for final expense insurance policies are lower and more affordable for a larger number of people. 

Moreover, getting covered is easy because there’s no medical exam needed. These factors make final expense insurance popular among seniors.

Is Life Insurance for Seniors Worth It?

The answer is yes, but what’s important is to choose the right type of insurance according to your needs, goals, and financial circumstances. 

There are three key factors that seniors need to consider when determining which type of life insurance to buy. 

Do You Want to Leave Money for Your Family?

One of the primary reasons people buy life insurance is to leave money for their loved ones after their death. 

However, not everyone may necessarily need it. 

If you have a good amount of savings or home equity, it may not be worth buying life insurance 

However, if you don’t have any other savings, life insurance is usually a good option - especially when there are chances that your death will leave your family with a financial hardship.

Do You Need Money to Cover Your Final Expenses?

For many people, all they need is enough money to cover their end-of-life and funeral expenses. If this is the case, then you may consider buying a final expense insurance policy. 

The reason for this is because a burial insurance policy will give you and your family the financial peace of mind necessary to make sure your funeral and any other expenses are covered.

Can You Afford the Monthly Premiums?

Compare and buy

final expense

Final Expense Life Insurance Quote Online

While your need for a life insurance policy is a major factor in determining if it’s worth buying, the rates of the policy also play an important factor in whether it’s worth it for you.

Buying life insurance at an older age will require you to pay higher premiums than when you were younger.

This may result in you having to reduce your desired coverage amount­– A smaller policy that you can afford is better than no policy at all.  

Consider all of these factors to know if it’s worth buying life insurance for you.

Final Expense Insurance vs. Life Insurance – Which is Better for the Elderly?

There is no universal answer to it; it can vary from person to person, depending on their life and future needs. 

Traditional life insurance is typically bought at a younger age (40-50 years of age) for larger amounts. It is used to cover everyday life expenses for their family in the event of death.

This could include mortgage, college funds, paycheck protection, funeral expenses, and more. 

Final expense insurance is designed for those later in age who may not qualify for traditional life insurance but still want to protect their family from the burdens of their funeral and other end-of-life expenses.

It is a smaller policy (typically $5,000 to $25,000) but there are many options that allow more seniors to obtain coverage than the other life insurance types.

Click here to read about the guaranteed issue final expense policy available to seniors.

The important question to ask is “what do you want to achieve from a final expense insurance or life insurance policy?” 

If you only want to avoid burdening your family members with your final expenses, final expense insurance would be the better option.

The Bottom Line

Whether you want full coverage or just enough so your family can take care of your funeral expenses, there are affordable options for both. 

A detailed consultation with a reliable insurance expert can help you find answers to all of the questions you may have about life insurance. 

It can help determine whether you should buy life insurance and, if you should, which one would be the right choice.

Final Expense Direct can help you determine which life insurance product is best for your specific needs. 

Call us now to speak with a professional, or schedule a call when you’re available.

INSTANT FINAL EXPENSE QUOTES

  • Get quotes FAST
  • More affordable than you think
  • Compare quotes from top companies
  • Know what you qualify for before you buy!
By pressing "Get Quotes Now" you agree to our privacy policy and consent to have Final Expense Direct contact you by email, phone call, text/SMS message at the phone number & email you provide. You understand that any calls, texts, SMS messages may be made using automated dialing technology. Consent isn’t a condition to purchase our products.