The best life insurance for seniors is one that will stay in effect until death at any age. To get a term policy as a senior is only advisable if the senior person has a short term need, such as wanting the life insurance to pay off a mortgage in case of death. Permanent policies (whole life or universal life guaranteed not to lapse to age 100+) are needed for final expense coverage. If a senior person gets term life insurance and then outlives the term, it can be very difficult o qualify for a new policy then.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Which type of life insurance is best for seniors? It's going to depend on their need, just as it would for anyone. If their need is short term, a term policy fits well. If their need is lifetime, with no real idea of what lifetime means in their case, then either guaranteed universal life or whole life may be a better choice.
Simply put, if you "know" when the need ends, term is an excellent solution. When you don't GUL or WL are better choices.
There are three basic planning goals for life insurance:
Indemnification, Income and Inheritance.
Indemnification – At minimum, seniors have final expense liabilities that they generally don’t desire to pass on to their children. Covering those expenses with a final expense life insurance product is a great alternative with a company that offers benevolent geriatric underwriting. Life insurance underwriting is extremely important as you become older, especially if you need more coverage than final expense. A good life insurance company that has sizable retention and death benefit break points can really help keep the price tag down. Retention is the risk the life insurance company is willing to take on without sharing the risk with other life insurance companies. The bigger the retention, the more wiggle room to negotiate the underwriting offer. And death benefit break points can reduce the cost of insurance as you buy more coverage. Break points generally start at $250,000, then $500,000, $1,000,000 and $3,000,000. Guaranteed universal life may be the best policy choice.
Income – Life insurance has the potential to generate tax advantaged income and, if properly designed, may generate tax free income as long as the policy is issued as a non-modified endowment contract and is kept in force for the life of the insured. Some seniors use life insurance tax free income in tandem with their Social Security benefits and defer their qualified plan distributions until age 70½. It’s a good planning strategy. Life insurance policies with the least expense loads are the most desirable. Indexed universal life may be the best policy choice.
Inheritance – Many seniors desire to make a difference with their children, grandchildren and charities. A survivorship policy for married couples is the best solution because in leverages two lives on one contract and pays the death claim at the death of the second insured. Survivorship guaranteed universal life may be the best policy choice for married couples and guaranteed universal life may be the best policy choice for single seniors.
We spreadsheet the life insurance companies based on underwriting, product provisions and price, assisting seniors in the decision making process.
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Simply put, if you "know" when the need ends, term is an excellent solution. When you don't GUL or WL are better choices.
Indemnification, Income and Inheritance.
Indemnification – At minimum, seniors have final expense liabilities that they generally don’t desire to pass on to their children. Covering those expenses with a final expense life insurance product is a great alternative with a company that offers benevolent geriatric underwriting. Life insurance underwriting is extremely important as you become older, especially if you need more coverage than final expense. A good life insurance company that has sizable retention and death benefit break points can really help keep the price tag down. Retention is the risk the life insurance company is willing to take on without sharing the risk with other life insurance companies. The bigger the retention, the more wiggle room to negotiate the underwriting offer. And death benefit break points can reduce the cost of insurance as you buy more coverage. Break points generally start at $250,000, then $500,000, $1,000,000 and $3,000,000. Guaranteed universal life may be the best policy choice.
Income – Life insurance has the potential to generate tax advantaged income and, if properly designed, may generate tax free income as long as the policy is issued as a non-modified endowment contract and is kept in force for the life of the insured. Some seniors use life insurance tax free income in tandem with their Social Security benefits and defer their qualified plan distributions until age 70½. It’s a good planning strategy. Life insurance policies with the least expense loads are the most desirable. Indexed universal life may be the best policy choice.
Inheritance – Many seniors desire to make a difference with their children, grandchildren and charities. A survivorship policy for married couples is the best solution because in leverages two lives on one contract and pays the death claim at the death of the second insured. Survivorship guaranteed universal life may be the best policy choice for married couples and guaranteed universal life may be the best policy choice for single seniors.
We spreadsheet the life insurance companies based on underwriting, product provisions and price, assisting seniors in the decision making process.