If you’re reading this article, it’s likely that you’re searching for the best life insurance coverage for yourself or a loved one. Whether you’re looking for coverage for your spouse, parents, or even for yourself, you’ve come to the right place. This guide is designed to help you navigate the various life insurance options available for seniors over 65, focusing on burial insurance, income replacement, and other critical needs.

Why Seniors Over 65 Purchase Life Insurance

1. Final Expense (Burial or Cremation)

The primary reason many seniors over 65 purchase life insurance is to cover funeral and cremation expenses, also known as final expenses. The cost of a funeral can be quite substantial, with the average burial costing around $10,000 to $12,000, and cremations costing between $5,000 and $7,000. These costs are expected to rise over time. Having a life insurance policy can help cover these expenses, ensuring that your family isn’t burdened with significant financial stress during a difficult time.

2. Income Replacement

Another important reason for seniors to purchase life insurance is income replacement. If you and your spouse rely on a combined income to maintain your lifestyle, the death of one spouse can significantly impact the surviving spouse’s financial situation. A life insurance policy can provide the necessary funds to help the surviving spouse maintain their lifestyle, manage household expenses, and make necessary adjustments.

3. A Gift of Love

Life insurance can also serve as a thoughtful gift of love. Many seniors purchase policies to leave something behind for their children or grandchildren, providing them with financial support and a sense of security.

4. Mortgage Payment

If you own a home with an outstanding mortgage, life insurance can help ensure that your family can continue to make mortgage payments even after your death. This prevents the risk of losing the home and allows your family time to make necessary arrangements.

5. Payment for Existing Loans

Life insurance can also be used to pay off existing loans, such as business loans or personal debts. This ensures that your financial obligations are met, and your family isn’t left with the burden of unpaid debts.

Stories from the Field

Over the years, I’ve worked with many clients who were overcharged for their life insurance policies. One particular story highlights the importance of having a policy that serves its purpose effectively.

In 2014, I met a gentleman who needed a small burial plan. After we finalized his policy, he asked me to speak with his mother, Mrs. Sanders, who was 81 years old and in need of better coverage. Mrs. Sanders had a life insurance policy that she had been paying for 20 years. Unfortunately, unexpected rate hikes had increased her premium from $50 to $300 per month, and the policy was set to cancel when she turned 90. Due to her recent heart problems, she couldn’t find an affordable policy with immediate coverage.

This situation underscores the importance of choosing a life insurance policy that remains affordable and effective throughout its term. It’s crucial to find coverage that fits your budget and meets your long-term needs.

How to Pick the Best Life Insurance Option

Determine Your Budget

The first step in selecting the right life insurance policy is to determine your budget. You need a policy that you can afford to keep, even during financial difficulties. Dropping a policy due to high premiums is a waste of time and money.

Define Your Goals

Understanding why you’re buying life insurance is crucial. Are you looking to cover final expenses, replace income, or provide a gift of love? Your goals will determine the type of coverage you need.

Evaluate the Quality of Coverage

Ensure that the coverage you choose is comprehensive and meets your needs. Look for policies that cover natural and accidental deaths and consider the length of coverage you need.

Life Insurance Options for Seniors Over 65

Whole Life Insurance

Whole life insurance provides permanent coverage with fixed premiums and a guaranteed death benefit. There are two main types of whole life insurance: fully underwritten and guaranteed acceptance.

• Fully Underwritten Whole Life Insurance: This type requires a thorough medical examination and offers lower premiums if you’re in good health.

• Guaranteed Acceptance Whole Life Insurance: This type doesn’t require a medical exam but comes with higher premiums and a two-year waiting period for natural death coverage.

Term Life Insurance

Term life insurance provides coverage for a specific period (10, 15, or 20 years). It’s typically more affordable than whole life insurance and offers higher coverage amounts. However, once the term ends, the policy either expires or the premiums increase significantly.

Guaranteed Universal Life Insurance

Guaranteed universal life insurance is a hybrid between whole and term life insurance. It offers permanent coverage with fixed premiums and doesn’t cancel due to age or health. This type of policy is ideal if you want a permanent solution at a lower cost than traditional whole life insurance.

Sample Rates and Coverage Options

For a 65-year-old non-smoking female:

• $10,000 Whole Life Insurance: Premiums range from mid $30 to upper $40 per month.

• $100,000 Term Life Insurance (10-year term): Premiums range from mid $30 to low $50 per month.

• Guaranteed Universal Life Insurance ($25,000 coverage): Premiums range from $100 to $130 per month.

For a 65-year-old non-smoking male:

• $10,000 Whole Life Insurance: Premiums range from low $40 to low $50 per month.

• $100,000 Term Life Insurance (10-year term): Premiums range from low $50 to lower $70 per month.

• Guaranteed Universal Life Insurance ($25,000 coverage): Premiums range from $100 to $130 per month.

Conclusion

Choosing the right life insurance policy for seniors over 65 involves understanding your goals, determining your budget, and evaluating the quality of coverage. Whether you opt for whole life insurance, term life insurance, or guaranteed universal life insurance, the key is to find a policy that meets your needs and provides financial security for your loved ones. Working with an independent life insurance agent can help you navigate the options and find the best coverage for your situation.