Whole life insurance can be a good option for seniors because the guaranteed death benefit ensures that your loved ones will receive a generally tax-free gift when you pass away. In many cases, these policies also come with some “living benefits” that can come in handy if you experience health issues as you age.
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Whole life insurance for seniors
Whole life insurance can ensure that your family is financially secure after you are gone. Even if you are already at retirement age or older, there are options for you.
Can you get guaranteed whole life insurance for seniors?
As you enter retirement, you may find yourself thinking more about the future of your family. Whether you already have coverage in place or you’re shopping for your first policy, whole life insurance is available for people over 60, and it can give you the peace of mind that comes with knowing that your family will not be left with bills after you pass. It can also be an important addition to what you already have in place.
While many of the policies that are available to seniors do not grant the same amount of coverage as the fully underwritten policies you can purchase when you are younger, they still offer significant benefits. The guarantees of life insurance are based solely on the claims-paying ability of the issuer. Guarantees remain in place as long as all premiums are paid. It probably will not be possible to purchase the amount of life insurance you could have purchased at age 45. But modest policies are available to almost anyone.
Related: Shop for whole life policies
Will I need a medical exam?
That depends on the type of coverage you want. Some policies offer limited coverage without medical underwriting, but these may not be the best solution. If you can qualify for a policy that includes a medical exam, you will have more options and may be able to get a higher amount of protection.
How much coverage can you get?
While policy amounts range widely, they typically offer anywhere from $10,000 to $50,000 in coverage. Some companies have a minimum amount of coverage that they offer, and most will require a medical exam for higher amounts.
Whole life insurance rates for seniors
The life insurance benefit for senior policies tends to be smaller, therefore the amount of the premium will correspond to the coverage., New York Life agent can review coverage options to determine if there are rates that will fit with your budget.
Can I outlive my insurance?
While it is unlikely, even "permanent" life insurance policies can expire if you reach a certain age. It’s called maturing, and depending on your policy, it could happen at age 95, 100, or even 121. When your coverage matures, you receive all of the cash value (usually equal to the coverage amount) the policy has built up, and the policy comes to an end. Since you’ve already received the full value, there isn’t an additional life insurance benefit when you pass. Be sure to consult an agent to see when your policy matures if you are worried about outliving it.
Why should I consider whole life insurance for seniors?
As you enter your golden years, you may no longer have a need for a large amount of life insurance. Your kids are likely grown and independent, and your spouse will be relying on Social Security and retirement savings rather than relying on your income. Life insurance is still important, though. Smaller whole life policies for seniors can help your family with several common end-of-life costs. Here are a few reasons you should consider such a policy:
Term may be unavailable or too expensive
As you get older, the cost of a new life insurance policy goes up significantly. Because health risks increase as you age, term life insurance may become unaffordable. Some companies do not sell term life to people over a certain age. This often makes smaller whole life insurance policies for seniors a better option.
Related: Compare whole life and term life benefits
Cover funeral expenses
The average funeral today costs $8,000 to $10,000 or more. A small whole life policy, often called final expense insurance, can ensure that your family does not have to worry about how to cover these costs during a time of mourning.
Pay off debts or a mortgage
It’s not uncommon for family members to need to sell off assets, like a cherished family home, because they cannot afford the additional cost of a mortgage. Putting a life insurance policy in place to pay off a mortgage or other debts can help your family tremendously.
Prepare for medical bills
It’s an unfortunate truth that end-of-life medical expenses can be particularly high, and that can affect how much seniors are able to leave to their heirs. This can cause extra stress and be a significant financial burden during a difficult time. A whole life insurance policy for seniors can give you the peace of mind that comes from knowing your family can take care of any medical bills you leave behind. A New York Life agent will be happy to go over all your options.
Do my whole life options change with my age?
As a general rule, your life insurance options become more limited as you age.
People in their fifties will have access to a wide variety of whole life policies. Those who are in their sixties, seventies, or eighties may find that that they have fewer choices, or that the amount of coverage they are eligible to receive is lower.
Other options to protect your future
Whole life insurance is not the only way to ensure a healthy retirement and make sure that your family is taken care of when you pass. New York Life offers a full range of products that, when combined smartly, can create a financial safety net throughout your golden years. Consult an agent for more information.
Immediate income annuities
Annuities are one way to guarantee that you won’t outlive your retirement savings. In exchange for a lump sum (often from a 401(k) or another retirement savings vehicle), you can get guaranteed income for life, no matter how long you live. You can start receiving payments immediately and enjoy a predictable income throughout retirement.
Proper estate planning
Regardless of your level of wealth, everyone should have a well-thought-out will and estate plan. Making it clear how you would like your assets and savings split among your beneficiaries will help avoid complications and delays, and if you have enough assets for inheritance taxes to be a concern, smart planning can significantly reduce the tax burden for your family after you pass.
If you’re already at retirement age and you’d like to explore whole life insurance options, our agents can help you find something that you can fit into your budget and that delivers the peace of mind you’re looking for. Let us help you make sure your family is taken care of.
Frequently asked questions
While both term and whole life insurance provide dependable coverage, term policies are often more difficult to obtain later in life, and there’s always a chance you could outlive your coverage. With whole life insurance, however, your coverage is guaranteed to last the rest of your life (or until the policy matures and you receive its full cash value), so you can be sure that your final wishes will be carried out.
Seniors tend to need less coverage than young or middle-age adults since most of their financial responsibilities, such as raising kids and paying for college, are now behind them. Even so, life insurance can still play an important role in helping with final expenses, paying off medical costs, and distributing money to your loved ones in a tax-efficient way. A New York Life agent can help determine how much coverage you need.
Since the cost of whole life insurance is largely determined by your age and health, it is best to purchase coverage as early as possible. If you are a senior, however, and do not need a large amount of coverage, you may still be able to find a whole life policy that fits within your budget.
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Want to learn more about life insurance?
A New York Life financial professional can help determine what’s right for you.
Neither New York Life Insurance Company (NY, NY), nor its agents, provides tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.
Investments are offered through NYLIFE Securities LLC (member FINRA/SIPC), a Licensed Insurance Agency and a New York Life company.
New York Life Insurance Company is the issuer of New York Life Whole Life. In Oregon, the Whole Life policy form number is ICC18217-50P (4/18).