As people get older, they realize the importance of leaving a legacy and providing for their loved ones. Life insurance can be an excellent tool for ensuring beneficiaries are financially stable when the policyholder passes away. To find the right life insurance quote for seniors, it's important to understand what affects the cost of premiums and compare different plans. Here's how life insurance works and some types of policies that may be available to seniors.

How does life insurance for seniors work?

Life insurance for seniors provides loved ones with financial security when the policyholder passes away by paying out a sum of money called a death benefit. Some policies also come with a cash value growth component that will accumulate over time. Once the policyholder has built up enough cash value, they can withdraw from it, borrow from it, or surrender the policy to receive the full amount minus surrender charges. With any life insurance plan, policyholders have to pay monthly premiums to maintain their coverage.

Life insurance premiums for seniors can depend on many other factors, such as:

• Insurer: Each insurer will offer different premiums.
• Policy terms: A higher death benefit and adding riders can increase costs.
• Gender: Men tend to pay slightly higher premiums than women, since women often live longer.
• Age: Life insurance tends to get more expensive with age, since an older policyholder is more likely to pass away while the policy is active.
• Family health history: Insurers consider the health history of both the policyholder and their family when calculating premiums.
• Smoker vs. nonsmoker: Smokers pay more for life insurance than nonsmokers, all else held equal.
• Hobbies and lifestyle: Hobbies like skydiving, rock-climbing, and car racing may be considered risky, leading to higher premiums.

Types of life insurance for seniors

Here are two main types of life insurance policies that are available to seniors:

Final expense insurance

Final expense insurance is a small whole life insurance policy designed to help a senior's loved ones cover end-of-life costs, such as outstanding medical bills and funeral expenses. This life insurance policy typically comes with a smaller death benefit and lower premiums than standard whole life insurance policies. Final expense insurance also provides a cash value growth component that builds with each payment and grows at a fixed rate.

Final expense insurance policies generally don't require a medical exam, making them an excellent option for seniors who might not qualify for other types of permanent life insurance policies.

Term life insurance

Term life insurance provides policyholders with coverage for a defined time period, usually from 10 to 30 years. Since these plans don't offer lifelong coverage, premiums tend to be much more affordable.

Term life policies offer higher death benefits than final expense insurance, but coverage ends when the policy term ends. This means seniors may have to get a new policy to maintain coverage.

The bottom line

Seniors have several options for getting life insurance at a rate they can afford. Final expense insurance offers guaranteed lifetime coverage for end-of-life costs, low premiums, and a cash value component. And term insurance lasts a limited time but offers a higher death benefit for relatively affordable premiums. Seniors should take their time to evaluate each policy, then compare different insurers to find a life insurance quote that fits their needs.

Contact: michael.bertini@iquanti.com