Best Life Insurance For Seniors 2023
There are several options for life insurance for seniors, and the best option for you will depend on your individual needs and circumstances. Some factors to consider when choosing a life insurance policy for seniors include the amount of coverage you need, the type of policy you want (e.g., term or permanent), and your budget. Here are a few options to consider:
- Term life insurance:
- Permanent life insurance:
- Guaranteed acceptance life insurance
Best Life Insurance Companies For Seniors
- Guardian Life: Best for payment flexibility.
- MassMutual: Best for elderly applicants.
- Northwestern Mutual: Best for the potential to earn dividends.
- New York Life: Best coverage range.
- State Farm: Best for customer satisfaction.
- USAA: Best for coverage flexibility.
Term life insurance for seniors
Term life insurance is a type of policy that provides coverage for a specific period of time, such as 10, 20, or 30 years. It is generally less expensive than permanent life insurance and is a good option for seniors who want to provide financial protection for a specific period of time, such as during their working years or until their children are financially independent.
There are several factors to consider when shopping for term life insurance as a senior. These include:
- The length of the term: Choose a term that meets your coverage needs. If you only need coverage until your children are financially independent, for example, a 20-year term may be sufficient.
- The amount of coverage: Consider how much your loved ones would need to cover expenses such as funeral costs, outstanding debts, and future expenses like college tuition.
- Your health: Your health can affect your premiums, so it’s important to be honest about any pre-existing health conditions when applying for coverage.
- Your budget: Term life insurance is generally more affordable than permanent life insurance, but premiums can still vary significantly from one insurer to another. It’s a good idea to compare quotes from multiple insurers to find the best fit for your budget.
Permanent Life Insurance For Seniors
Permanent life insurance is a type of policy that provides coverage for the rest of your life and often includes a savings component. There are several types of permanent life insurance, including whole life, universal life, and variable life.
Whole life insurance is a type of permanent policy that provides coverage for your entire life and includes a savings component, known as the “cash value.” The premiums are fixed, and the policy accumulates cash value over time, which you can borrow against or withdraw for any reason.
Universal life insurance is a type of policy that combines the protection of term life insurance with a savings component that grows on a tax-deferred basis. The premiums and death benefit are flexible, and you can adjust them as needed to fit your changing needs and circumstances.
Variable life insurance is a type of policy that combines the protection of term life insurance with a savings component that is invested in the stock market. The policy’s cash value and death benefit can vary depending on the performance of the investments.
Permanent life insurance is generally more expensive than term life insurance, but it can provide financial security for your loved ones and can also be used as a financial planning tool. It’s a good idea to consult with a financial advisor or insurance agent to help you determine if permanent life insurance is the right choice for you.
Guaranteed Acceptance Life Insurance
Guaranteed acceptance life insurance is a type of policy that is designed for seniors who may have health conditions that would make it difficult to qualify for traditional life insurance. It typically requires no medical exam and is guaranteed to be accepted, but the coverage is usually limited and the premiums are higher than for other types of life insurance.
Guaranteed acceptance life insurance is a good option for seniors who have been declined for coverage due to health issues or who are unable to qualify for a traditional policy due to their age. It can provide financial protection for your loved ones in the event of your death and can help cover expenses such as funeral costs and outstanding debts.
However, it’s important to keep in mind that guaranteed acceptance life insurance usually has lower coverage limits than traditional policies and the premiums are typically higher. It may not provide enough coverage to meet all of your loved ones’ financial needs, so it’s a good idea to consider all of your options before deciding on a policy.
BEST OVERALL New York Life
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- AM Best Rating: AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations.A++
- Accepts Credit Cards: No
Pros
- Policies available to 90-year-old applicants
- A++ AM Best rating
- Long history of dividend payments
- Few customer complaints
- Broad selection of riders
Cons
- Must talk to an agent to get a quote and apply
- Limited policy information online
New York life ranks as having the overall best senior life insurance for a number of reasons. It’s one of very few companies we reviewed that issues policies to applicants up to age 90 (most companies cap applicant age at 85). And considering that it’s more than 170 years old itself, the company has weathered many financial storms, including multiple recessions and the Great Depression. Its strong financial position has earned it an A++ rating (the highest available) from AM Best.1 An A++ rating means AM Best believes the company has a superior ability to meet its ongoing insurance obligations.
The company receives few complaints, according to the National Association of Insurance Commissioners (NAIC).2 Plus, whole life policyholders are eligible for life insurance dividend payments, and have been receiving them every year since 1854, the longest record for consistent dividend payments of all companies we reviewed.
New York Life also offers an array of riders with which to customize your policy, including a disability income rider, which only one of our other top senior companies offer. The downside is that you’ll need to provide your phone number and other personal information to get detailed policy information and a quote. Not surprisingly, there’s no online application option either.
BEST FOR FINANCIAL STABILITY Guardian
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- AM Best Rating: AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations.A++
- Accepts Credit Cards: No
Pros
- A++ AM Best rating
- Very few customer complaints
- Policies available to 90-year-old applicants
- Pays dividends on whole life policies
Cons
- Can’t apply without an agent
- Hard to find policy-specific information online
In business since 1860, Guardian Life received an A++ rating from AM Best for financial stability.3 Fewer than 10% of the companies we reviewed received this rating; New York Life is the only other one on this list. Also like New York Life, 90-year-old applicants to Guardian are eligible to apply for coverage, and whole life insurance policyholders are eligible for dividends.
Guardian also has a very low incidence of customer complaints, according to the NAIC. Based on three years of complaints, Guardian received an exceptionally low number for a company of its size.4 In fact, it had the 6th-lowest number of complaints (based on its size) out of the 91 companies we reviewed.
And while you can find copious educational material on the company’s website, finding policy-specific information is difficult to impossible. You’ll need to reach out to an agent for that. You’ll also need to contact an agent to apply.
BEST FOR FEWEST COMPLAINTS: Pacific Life Insurance
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- AM Best Rating: AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations.A+
- Accepts Credit Cards: No
Pros
- Very few customer complaints
- Policies available to 90-year-old applicants
- Term coverage available to 70-year-old applicants
- Many accelerated death benefits and riders available
Cons
- No online quote or application on the website
Pacific Life had the second-fewest number of complaints relative to its size of all 91 insurance companies we reviewed.5 The company is especially good for seniors because it offers senior life insurance in the form of term coverage for applicants up to 70 years of age and permanent coverage for those up to 90 years old. Only six other companies of the 91 we considered offer coverage to 90-year-old applicants.
Additionally, Pacific Life offers a whole suite of accelerated death benefits, many at no additional cost, including riders for chronic and terminal illnesses and long-term care. (Many insurance companies charge extra for some or all of these riders.) Like some other insurance companies on this list, the online offerings at Pacific Life are limited. You can’t get a quote or apply without calling the company or applying through a third party agent or broker.
BEST TERM FOR SENIORS: John Hancock Life Insurance
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- AM Best Rating: AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations.A+
- Accepts Credit Cards: No
Pros
- High maximum age for term insurance applicants
- Offers insurance for diabetics
- Optional critical illness rider doesn’t reduce the policy’s death benefit
- Wellness program
Cons
- Most accelerated benefit riders cost extra
- No online quote, application, or live chat for applicants
John Hancock offers the most compelling term life insurance offerings of our top-ranked companies for seniors. It issues term policies to applicants up to age 80, while many competitors have cutoffs at age 75 or younger. Its maximum issue age for other types of insurance is also high, at 90.
In addition, we like that John Hancock offers a critical illness rider that isn’t an accelerated benefit, so the death benefit doesn’t get reduced if the rider is used. That’s uncommon. The company also caught our eye for its insurance for diabetics as well as its Vitality rewards. Vitality provides incentives for policyholders to live a healthy lifestyle, including potential discounts on senior life insurance premiums.
John Hancock’s main weaknesses are that accelerated death benefit riders cost extra, and, like others on this list, it doesn’t allow you to get a quote or apply online without an agent.
Compare the Best Life Insurance for Seniors in 2023
| Overall Rating | Best For |
AM Best Rating AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations.
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*Quotes above are examples of what a 40-year-old in excellent health might pay for a 30-year $250,000 policy. Get life insurance quotes from multiple companies to find your best rate.
Final Verdict
The best senior life insurance company for you will be determined by what type of coverage you’re looking for and your personal preferences. If you want a rock-solid company with a long history of financial stability, look to New York Life and Guardian. They have the added benefit of being the only two companies on this list that pay dividends.
And while both of those companies have a low incidence of customer complaints, the company with the fewest complaints is Pacific Life, which also offers coverage to 90-year-old applicants (as do Guardian and New York Life).
For term policies, consider John Hancock, especially if you’re an older applicant. You’ll need to talk to an agent, but can apply for a 10-year term policy if you’re 80 years old. This is not the case with any other carriers on this list.
What Is Senior Life Insurance?
Senior life insurance is regular life insurance that seniors are eligible for. Senior life insurance usually refers to final expense insurance, which is also called burial insurance or funeral insurance. These policies often limit the death benefit to $25,000 and require few or no health questions and no medical exam, making them easy to qualify for.
What Is the Average Cost of Life Insurance for Seniors?
Senior life insurance is more expensive than life insurance for younger individuals. A 60-year-old might pay between $100 and $200 per month for $25,000 worth of guaranteed issue whole life insurance coverage, while a 70-year-old might pay $160 to over $300 per month for the same coverage. Life insurance gets progressively more expensive as you get older.
Term or Whole Life Insurance for Seniors?
Whether you purchase term or whole life insurance as a senior depends on how much coverage you need, for how long, and what you can afford. A term policy may be a good idea if you only need coverage for a limited amount of time, such as the last few years of making your mortgage payments. But if you want to provide for loved ones whenever you pass, get permanent whole life insurance or a burial insurance policy.
How Does a Graded Death Benefit Work?
A policy with a graded death benefit has a waiting period, usually two or three years. If the policyholder dies from natural causes within the waiting period, the beneficiaries don’t get the full death benefit. Instead, the insurance company provides a return of premium plus a small percent. A graded death benefit is a feature of some burial insurance and final expense insurance policies.
For example, if the insured person dies during the first two years of coverage, the policy might pay a return of premiums plus 10%. After the graded death benefit period, or for accidental death at any time, the policy would pay the full death benefit.
The reason insurance companies have graded death benefits is so they can afford to offer coverage to high-risk applicants at affordable premiums. Otherwise, insurers would need to charge much larger premiums to cover their costs or they’d simply deny coverage. This is because life insurance premiums are based on when the insured person is most likely to die—and the highest risk applicants (the type that guaranteed issue policies are designed for) are most likely to die sooner rather than later. A graded death benefit helps the company soften this risk so that it can offer affordable coverage.
It’s important to compare graded death benefit periods and payouts between companies if you’re buying a permanent life insurance policy that doesn’t ask health questions or require a medical exam.
How To Choose the Right Life Insurance Company
The best life insurance companies offer the type of policy you need at a price you can afford and meet the following criteria:
- An A or above rating from AM Best: AM Best gives A ratings and above to companies it considers to have an “excellent” (A-, A) or “superior” (A+, A++) ability to meet their ongoing insurance obligations.6 All companies in our best life insurance for seniors list have at least an A+ rating.
- Few customer complaints: You can see how many complaints a life insurance company has received using the NAIC’s Consumer Insurance Search tool. Look at the insurance company’s “complaint index” for life insurance. An index greater than 1.0 means the company received more complaints than expected for its size, an index less than 1.0 means it received fewer.
- The policy features you want: Some companies automatically include value-added benefits or riders in their coverage, while other companies charge extra for you to add them. This is particularly the case with accelerated death benefit riders like chronic, critical, and terminal illness riders. Make a note of which companies and policies offer the best living benefits.
- A manageable application process: Once you’ve determined which companies you like, it’s time to get life insurance quotes and apply for coverage. It’s likely you’ll talk to an agent, which can give insight into how transparent or accessible service may be in the future, so pay attention to the agent’s behavior in your communications with them.
Low-coverage no-exam policies, like guaranteed issue and final expense, are best suited for people dealing with health issues. If you’re in good health, you could pay a much smaller premium or get a higher death benefit amount by undergoing a medical exam during the application.
How We Chose the Best Life Insurance Companies
In order to compile our list of the best life insurance companies for seniors, we developed a comprehensive life insurance methodology. We started off by researching what consumers want from life insurance companies, and for that, we looked to third-party consumer studies, including J.D. Power’s 2021 U.S. Life Insurance New Business Study and the 2021 Insurance Barometer Study, by Life Happens and LIMRA.
With those findings in mind, we gathered more than 50 data points on 91 life insurance companies, including ratings for financial strength, customer satisfaction, and customer complaints, as well as information about years in business, online tools, no-exam options, policy types and features, maximum issue age, and available riders.
Our review process gave preference to companies with superior financial stability, few customer complaints, and a high maximum issue age for policies. In particular, we valued the availability of accelerated death benefit riders and whether they’re included in policies free of charge. Companies received ratings boosts if they provide educational materials, accept credit cards, and make large coverage amounts available. We ranked each company according to the following categories and weights.
- 30%: Maximum issue age
- 24.5%: Financial stability
- 24.5%: Consumer complaints and customer service features
- 16%: Policy features and riders
- 5%: Maximum coverage amount
To finalize our list, we considered third-party customer satisfaction ratings, and compared individual offerings between top companies by delving deeper into product specifics and the application process. We used this research to determine the best life insurance for seniors.