The 7 Best Life Insurance for Seniors in 2020

Insurance policies designed to help maximize your golden years

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Life insurance plays a different role in every stage of life. Younger adults who purchase life insurance typically have dependents in mind who would need continued financial support in the event that something happened to them. Later in life, seniors may look into life insurance for an entirely different set of reasons, which include covering funeral expenses and outstanding debt, such as potential medical bills from a terminal illness. An average funeral can cost $8,000 to $10,000; life insurance is a good way to ensure that this financial burden doesn’t fall on surviving family members.

While it’s true that life insurance gets more expensive as you age, life insurance for seniors might cost less than you think. Since there are fewer term life insurance options for older adults, most policies for seniors fall into the permanent life insurance category. These policies never expire as long as premiums are paid.

To choose the best life insurance for seniors, we looked at policies from 25 different insurers and compared key areas including price, customer service, benefits, and limitations. In the end, we chose insurance companies that provide excellent coverage to seniors.

The 7 Best Life Insurance Companies for Seniors for 2020

Best Overall: Mutual of Omaha

Mutual of Omaha

Mutual of Omaha

Pros
  • Excellent customer service ratings

  • Competitive pricing

  • Wide range of policies

  • Get a policy up to age 85

Cons
  • Medical exam required for some policies

  • Some policies must be purchased through an agent

  • Limited riders available

Our top pick for life insurance for seniors, Mutual of Omaha, offers term, whole, and universal life insurance with flexible policy provisions. Term life insurance policies are issued up to age 80 and can be renewed yearly until age 94 with coverage starting at $100,000. Whole life policies are available to applicants up to age 85 with coverage options from $2,000 up to $25,000. The whole life policies don’t require a medical exam or any health-related information to begin coverage.

Mutual of Omaha is fairly competitive in its pricing. Premiums on term life insurance aren’t the lowest available, but they’re not overly expensive, either; an average 65-year-old male would pay around $119 per month for a 10-year policy with $250,000 in coverage. However, the provider offers some of the best prices on the market with its guaranteed whole life policies. A $10,000 policy, for example, costs just $66 per month for a 65-year-old male, and $166 for an 80-year-old male, significantly lower than most competitors.

Customer service ratings from various agencies list Mutual of Omaha at or near the top. J.D. Power lists the provider third out of 24, and AM Best has issued a Superior rating. Great service includes a comprehensive website with easy-to-use tools for choosing a policy and filing claims, as well as phone support and the option to meet with local agents.

Why We Chose It: Mutual of Omaha is the friendliest to seniors, with a range of different policies available to applicants as old as age 85. The company is at the top of its class in customer service, offering support online, over the phone, and in-person with local agents. Mutual of Omaha's winning combination of pricing, benefits, and service makes them best overall in our review.

Best Final Expense Insurance: AIG

AIG

AIG

Pros
  • Coverage options from $5,000 to $25,000

  • Guaranteed acceptance up to age 85

  • Chronic and terminal illness accelerated death benefits included at no additional cost

Cons
  • Limited benefits for first two years

  • Living benefits capped at 50% of death benefit amount

  • Negative customer service reviews

Final expense insurance is a term for whole life insurance policies with lower coverage that are geared toward helping pay for funerals and other end-of-life costs. AIG’s guaranteed whole life insurance policies fit the bill for this purpose, with coverage available in amounts between $5,000 and $25,000.

Acceptance is guaranteed for anyone up to age 85 with no medical exams required; this puts AIG ahead of the pack, as many other providers have an age cutoff much sooner than age 85. Pricing is on the lower end of the scale, especially for older applicants; an average 70-year-old male would pay just $98 per month for $25,000 in final expense coverage.

In addition to providing peace of mind for covering funeral costs, AIG’s policies give an additional sense of security by providing access to the policy benefits in case of a chronic or terminal illness. While many insurers charge additional fees for living benefits, AIG offers this rider at no additional cost. Depending on the illness, up to 50% of the total policy value can be used toward medical care, assistance, or any other costs.

The main drawback to AIG is its poor customer service ratings. In fact, the provider comes in dead last on the J.D. Power 2019 U.S. Life Insurance Study.

Why We Chose It: AIG makes final expense insurance available at a reasonable price to any applicant up to age 85, years after most competitors stop offering coverage. No medical exam is required, and living benefits are included free of charge, putting AIG at the top for best final expense insurance.

Best Term Life Insurance: Banner

Banner Life

Banner Life

Pros
  • Extremely competitive pricing

  • Coverage available through age 90

  • Few customer complaints

Cons
  • Must be 75 or younger to sign up

  • Limited policy options

The Banner Life Insurance Company has been in business for 180 years and maintains a positive record among rating agencies. The National Association of Insurance Commissioners (NAIC) reported just one complaint filed against the company in 2019. The insurer also holds a Superior financial stability rating from AM Best.

Operating under the Legal & General brand name, Banner offers term, final expense, and universal life insurance. However, the scope of policies available is more limited than some competitors, and consumers may be frustrated by the lack of clear policy information on the provider’s website.

Still, for seniors looking for the best price on term life insurance, Banner is the clear winner. A 65-year-old man in good health would pay just $53 per month for a 10-year policy with $100,000 in coverage. Increase this to a 20-year term with $500,000 in coverage and the price jumps to $385 monthly, which is still significantly lower than any competing quote we could find. While you must be 75 or younger to sign up, coverage can extend until age 90 depending on which policy term you choose.

Why We Chose It: Term life insurance policies get more expensive as the applicant grows older, so it’s hard to find an affordable policy for seniors over 65. Banner provides the most affordable options on the market with some policies offering coverage up to age 90. For term life coverage, Banner is our top pick in this review.

Best Whole Life Policy: MassMutual

MassMutual

MassMutual

Pros
  • Unique convertible policy

  • Comprehensive online tools

  • Best for younger, healthier seniors

Cons
  • Medical exam required within 90 days

  • Online application not available for anyone 65 or older

  • No living benefits for seniors

MassMutual was founded in 1851 and provides insurance and financial services nationwide. The company maintains an A++ (Superior) AM Best rating, the highest possible rating for an insurance carrier, and excels at both whole life and term policies. For this review, though, it is the leader in whole life coverage for seniors.

MassMutual has a unique convertible policy that begins as term life insurance but can be switched to a whole life policy. This insurance plan, called Direct Term, can be purchased online by applicants up to age 64 and is convertible beyond the issue age. Other whole life insurance policies for death benefits over $25,000 for seniors are available by speaking with a MassMutual agent. A medical exam is required within 90 days to sign up for a MassMutual whole life policy. Guaranteed issue policies are not offered and no living benefits are currently available.

While MassMutual’s whole life policies only make financial sense if you anticipate living long enough to pay the premiums for several years, they do have several benefits. For example, you can borrow against the cash value of the policy, your beneficiaries will receive a guaranteed death benefit no matter how long you live, and you may even earn dividends in the meantime.

Why We Chose It: MassMutual’s whole life policies have higher limits than traditional guaranteed whole life insurance geared toward seniors. If you need a policy with a face value significantly greater than $25,000 that won’t run out at the end of its term, MassMutual has the solution and is the clear winner for best whole life insurance.

Best for Grandchildren: Gerber

Gerber

Gerber

Pros
  • Premiums will never go up

  • Save 10% by setting up automatic payments

  • Value doubles once the child reaches age 18

Cons
  • Maximum death benefit of $100,000

  • Lower return than other long-term investment options

  • Below-average customer experience

Seniors with grandchildren may wish to contribute to their financial future by purchasing a life insurance policy in the grandchild's name. The Gerber Grow Up Plan was created for this exact purpose. Premiums are started when the child is young, and the policy face value automatically doubles at age 18. When the child turns 21, he or she automatically becomes the policy owner and can choose to either cash in the full value or continue coverage for life.

Premiums on a policy for your grandchildren will be much cheaper than purchasing life insurance for seniors. What's more, there's no guarantee they'll be eligible for life insurance as adults, so this plan starts grandchildren off on a guaranteed path to important life insurance protection.

You can expect to pay anywhere from $3.27 per month for a $5,000 policy to $31.40 per month for a $50,000 policy as long as you sign up for coverage before your grandchild turns one. Sign up for automatic payments to get a 10% discount on premiums.

While life insurance for grandchildren sounds like a thoughtful gift, it's important to note that there may be better investment options based on your intentions. For example, if your goal is to start a college savings fund, there are better options such as mutual funds that grow at exponentially better rates. However, starting a child's life insurance policy ensures they have some protection just in case they develop health issues at an early age.

Why We Chose It: Gerber’s life insurance plan for grandchildren costs just pennies per day in exchange for relatively high benefits in case of premature death. When the child turns 18, the policy’s face value instantly doubles, and your grandchild has the option to receive the cash value as a lump sum payment if he or she chooses.

Best for Seniors Over 80: Transamerica

Transamerica

Transamerica

Pros
  • Policies issued up to age 85

  • Many different policy types

  • Low premiums for older seniors

Cons
  • Limited website functionality

  • Only available through an agent

  • Below-average customer service ratings

Transamerica was founded in 1928 in San Francisco, California, and maintains an A rating with AM Best. Where most life insurance companies won’t even issue policies to seniors over 80, Transamerica will allow seniors up to 85 to sign up for coverage through both term and whole life insurance policies at reasonable rates.

Most of Transamerica’s final expense life insurance policies can be issued up to age 85 with higher death benefit limits than most competitors. You could be eligible for up to $40,000 in coverage from age 56 to 65, $30,000 from 66 to 75, and $25,000 from 76 to 85. The majority of the policies start offering full benefits on day one; other insurers may have a delayed benefit period of up to two years.

Transamerica is also one of the few life insurance companies that offers term policies to seniors over 80. We estimate that an average 80-year-old man would pay $376 each month for $100,000 in coverage and $1,467 for $500,000 in coverage.

One downside of Transamerica is that website functionality is extremely limited. You’ll have to call an agent to get a quote on most policies. The provider also receives customer service ratings from J.D. Power that fall significantly below average.

Why We Chose It: Seniors over 80 may find that their life insurance options are extremely limited, but Transamerica offers nearly all policy types to applicants as old as 85 without breaking the bank. In our review, Transamerica stands apart for seniors over age 80.

Best Living Benefits: Prudential

Prudential

Prudential

Pros
  • Living benefits pay up to 95% of full death benefit

  • Wide range of policies available

  • Competitive pricing

Cons
  • Living benefits are not available in all states

  • Does not offer whole life insurance

  • High number of customer complaints

Prudential was founded in 1875 in Newark, New Jersey, and maintains an A+ rating from AM Best. Prudential has 16 life insurance products that include various term and universal life types. One advantage of life insurance for seniors is that many policies include accelerated death benefits, also known as living benefits.

Prudential offers an impressive range of living benefits with three serious illness riders and three disability riders, available with both term and whole life insurance policies. In most cases, policyholders can qualify if they have been in a nursing home for at least six months and aren’t expected to leave or if they’ve been diagnosed with a terminal illness with less than six months to live.

While most competitors limit living benefits to around 50% of the total policy value, Prudential’s riders allow for up to 95% of total benefits to be accessed depending on the conditions of the illness. The caveat: living benefits must be added when you purchase the policy, and only those up to age 75 are eligible.

We estimate that a 75-year-old man will pay $405 per month for $250,000 in a 10-year term policy that has a living benefits rider attached.

Why We Chose It: Prudential offers six types of living benefits that allow the insured to receive up to 95% of the policy value in case of serious illness.

What Is Life Insurance for Seniors?

Life insurance for seniors is the same type of life insurance available at any age, but it’s often priced and marketed differently. This is because seniors have unique needs and financial situations. Term life insurance may be limited for seniors depending on their age and life expectancy, and premiums are typically very high. In this age group, the more common type of policy is permanent life insurance, which is usually sold to seniors as final expense or burial insurance. This low-benefit whole life insurance can help pay for final costs such as funeral expenses and certain final medical costs.

What Is Guaranteed Issue Life Insurance?

Guaranteed issue life insurance is a type of whole life insurance that doesn’t require a medical exam. This type of insurance is especially popular among seniors, who are more likely to have health conditions than younger adults. However, keep in mind that some insurers may ask limited health screening questions on your life insurance application, such as your weight and whether or not you smoke. Your answers to these questions might not disqualify you from coverage, but they could raise your premiums.

What Does Life Insurance for Seniors Exclude?

As with all life insurance policies, there are a few exclusions seniors should be aware of. Suicide is typically not covered within a certain amount of time from the policy start date, and some specific causes of death like private plane crashes could prevent a payout as well. Some policies for seniors may delay benefits entirely for the first two years, most often guaranteed whole life policies. Of course, if you withhold information such as preexisting health conditions on your insurance forms, there’s a good chance your beneficiaries will be denied compensation.

What Are the Expected Costs of Life Insurance for Seniors?

Life insurance costs for seniors depend on age, coverage amount, term, and sometimes health details. On average, we found that a 65-year-old male could expect to pay anywhere from $60 to $85 per month for term life insurance with $100,000 in coverage and a 10-year term length. Guaranteed whole life insurance policies with the same profile ranged from $65 to $105 monthly for $10,000 in coverage.

What Is the Cheapest Life Insurance for Seniors?

The best way for seniors to get cheap life insurance is to only get the coverage they absolutely need. Whole life insurance policies with high coverage amounts are much more expensive than final expense policies and tend to be more practical. On the other hand, term life insurance policies may save money for those who need higher coverage levels, but may not need it forever. Seniors in good health may also be able to get cheaper life insurance by passing a medical exam.

How We Chose Life Insurance Companies for Seniors

To choose the best life insurance companies for seniors, we evaluated policies from 25 different insurance companies using several criteria. First, we looked at policy premiums and coverage options available to seniors, including policy riders that offer additional personalized coverage. We also considered age restrictions for applicants and any other limitations that might affect seniors’ chances of being approved, such as medical exam requirements.

We read through customer reviews, walked through the process of getting a quote, and looked at available support options to evaluate the overall customer experience. Finally, we considered the insurance company’s financial stability rating, which gives a good indication of the insurer’s ability to pay out claims for decades to come.

Article Sources

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  3. NAIC. "Liberty Mut Ins Co National Complaint Index Report." Accessed May 20, 2020.