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How to get life insurance as an older adult

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Andrew HurstSenior Editor & Licensed Insurance ExpertAndrew Hurst is a former senior editor at Policygenius who has spent his entire career writing about life, disability, home, auto, and health insurance. His work has been featured in The New York Times, The Wall Street Journal, the Washington Post, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, and Property Casualty 360.

Edited

Jennifer GimbelJennifer GimbelSenior Managing Editor & Home Insurance ExpertJennifer Gimbel is a senior managing editor at Policygenius, where she oversees all of our insurance coverage. Previously, she was the managing editor at Finder.com and a content strategist at Babble.com.

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We break down a few important details that older adults in particular should be aware of before buying life insurance.

One of the worst mistakes that older adults make when it comes to getting life insurance is assuming that they won’t be able to find coverage due to their age.

While it’s true that at this stage in your life you need to pay closer attention to a few factors that can affect your coverage, the actual process of buying life insurance for you should be mostly the same as for someone younger.

Life insurance terms you should know

  • Beneficiaries: The people you name on your life insurance policy to receive the lump sum of money — also known as the death benefit — when you die.

  • Cash value: The portion of a permanent life insurance policy’s monetary value that grows tax-deferred over the life of the policy.

  • Death benefit: The amount of money the life insurance company will pay your beneficiaries when you die.

  • Face amount: The dollar amount, or death benefit, your beneficiaries receive if you die while your life insurance policy is active.

  • Insured: The person who is covered by the insurance policy.

  • Policy: The legal document that includes the terms and conditions of your life insurance contract.

  • Policyholder: The person who owns an insurance policy. Usually, this is the same person as the insured.

  • Permanent life insurance: A type of life insurance that lasts for the rest of your life and usually includes a cash value account.

  • Premium: The amount you pay your insurance company to keep your coverage active. Premiums are typically paid monthly or annually.

  • Riders: Add-ons to a life insurance policy that provide more robust coverage, sometimes for an extra cost.

  • Term life insurance: A life insurance policy that lasts for a set number of years before it expires. If you die before the term is up, your beneficiaries receive a death benefit.

  • Underwriting: The process where an insurance company evaluates the risk of insuring you and determines your final rate.

What older adults should consider before buying life insurance

Before you buy life insurance, make sure you understand:

How much life insurance you really need

As an older adult who’s likely closer to retirement and has less debt than someone younger, you may need only enough life insurance to pay for your funeral, or to pay off some debt. Find a policy that lines up with your financial obligations so you don’t spend money on more coverage than you need.

How your health affects what coverage you can get

Many insurance companies will require you to regularly see a primary care doctor, especially as you continue to get older. If you’re older than 70 and you haven’t regularly seen a doctor, it will be a lot harder for you to find an insurer that will offer you the coverage you need.

Who will receive money from your policy

Be sure that the people you choose to receive a death benefit, your beneficiaries, are accurate and that you name a backup beneficiary to get your death benefit if your primary beneficiary dies. You may also have to name a trust if you want a minor child (like a grandchild) to be a beneficiary.

How your death benefits will pay out

Some types of life insurance have what’s called graded death benefits. This means that if you die soon after getting your policy (usually within the first two years), your family will only receive part of your death benefit — often tied to how much money they’ve paid in premiums.

Do you need to prepare to pay taxes on your life insurance?

If you’re concerned that your family won’t be able to afford the taxes on their life insurance payout when you die, don’t worry: Most of the time life insurance payouts aren’t taxable. 

Your beneficiaries may need to worry about paying taxes on the death benefit if you have a plan through work, high net worth, you take out a loan with your policy, or if your family receives payouts from the policy over time instead of all at once.

Ready to shop for life insurance for seniors?

6 steps for buying life insurance as an older adult

Once you have an idea of how much coverage you need, follow these steps to get life insurance:

  1. Choose the type of policy to get You’ll choose between term and permanent life insurance based on the amount of coverage you need.

  2. Compare companies and quotes Policygenius can help you get free life insurance quotes from top companies, that way you can find the coverage you need without paying more than you have to.

  3. Complete the application process Prepare to answer questions about yourself and your medical history, then decide your policy’s beneficiary. You may also need to verify your identity, income, and address.

  4. Get a medical exam Take a short medical exam that’s similar to a physical, as long as your insurance company requires it.

  5. Wait to hear back about a decision You may have to wait between four and six weeks for the insurance company to approve or deny your application.

  6. Review and buy your policy If approved, sign the policy documents that your insurance company sends to you and make your first payment to start your coverage.

Can I just get life insurance from Medicare?

No, Medicare is a health insurance program that covers certain medical-related expenses; it doesn’t provide any life insurance coverage. You may qualify for a death benefit (called a survivor benefit) if a loved one collected Social Security, though.

All about life insurance for older adults

Author

Senior Editor & Licensed Insurance Expert

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Andrew Hurst is a former senior editor at Policygenius who has spent his entire career writing about life, disability, home, auto, and health insurance. His work has been featured in The New York Times, The Wall Street Journal, the Washington Post, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, and Property Casualty 360.

Editor

Senior Managing Editor & Home Insurance Expert

gray linkedin icon link

Jennifer Gimbel is a senior managing editor at Policygenius, where she oversees all of our insurance coverage. Previously, she was the managing editor at Finder.com and a content strategist at Babble.com.

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