Investopedia’s research highlights Nationwide as the leading life insurance provider for seniors, primarily due to its strong customer satisfaction ratings and an extensive range of policy options. While securing life insurance can be more challenging for older adults, it remains a viable option for covering final expenses or providing a financial legacy for loved ones, even with existing health concerns or age-related limitations.
Investopedia evaluated 45 life insurance companies, assessing factors such as application ease, coverage availability for various health conditions, and the types of policies offered. The analysis resulted in the following top picks:
- Best Overall: Nationwide
- Best Final Expense Insurance: Lafayette
- Best Whole Life Insurance: MassMutual
- Best Term Life Insurance: SBLI
- Cheapest Term Insurance: Thrivent
Best Life Insurance Companies for Seniors
Our Top Picks:
- Nationwide
- Lafayette
- MassMutual
- SBLI
- Thrivent
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Why Should Seniors Consider Getting Life Insurance?
Life insurance can be a valuable tool for seniors seeking to leave a financial legacy for their heirs or to help cover debts and final expenses like medical bills and funeral costs. Seniors can also choose from various riders, which are add-ons that provide extra benefits at an additional cost. For example, a critical illness rider can enable you to access the death benefit while still alive if diagnosed with a qualifying condition.
However, seniors should carefully consider whether purchasing a new life insurance policy is the right decision for them. Because the risk of mortality increases with age, premiums tend to be higher for seniors. Furthermore, seniors may not have dependents who rely on their income, which may make a new policy less necessary.
Types of Life Insurance for Seniors
Term Life Insurance
Term life insurance provides coverage for a specific period, commonly between 10 and 30 years. The death benefit is paid to the beneficiaries only if the policyholder passes away during the coverage term. If the term ends, the beneficiaries do not receive the death benefit. Term life insurance is typically less expensive than permanent life insurance because it offers temporary coverage and a death benefit that is only guaranteed for the policy’s duration. Some policies offer a conversion rider that allows policyholders to switch to a permanent life policy without an additional medical examination.
Permanent Life Insurance
Permanent life insurance offers lifelong coverage, ensuring the beneficiaries receive a death benefit as long as premiums are maintained. It includes a savings component known as cash value, which policyholders can access while alive through borrowing or withdrawals. There are two main types of permanent life insurance: whole life and universal life.
- Whole life insurance typically has fixed premiums, a fixed death benefit, and a fixed interest rate on the cash value.
- Universal life insurance offers more flexibility, with adjustable premiums and death benefits. The interest rate on the cash value also varies, although it usually has a minimum rate.
Final Expense Insurance
Final expense insurance is a type of permanent life insurance designed to help beneficiaries cover burial, medical, and funeral costs. These policies often offer lower coverage amounts with more affordable premiums than traditional permanent life insurance policies. Payouts range from $2,000 to $50,000. Due to the lower payouts, these policies often have simpler underwriting processes. Some are guaranteed-issue policies, meaning they don’t require medical exams or questionnaires. However, these usually have a waiting period, often of two or three years. If a policyholder dies during this period, the beneficiaries don’t receive the death benefit, though they may receive the premiums paid, plus interest.
Pros & Cons of Life Insurance for Seniors
Pros:
- Provides a financial legacy
- Can be used to pay off debts by beneficiaries
Cons:
- Higher premiums
- May not be eligible for all types of insurance
- Lower coverage amounts may be the only option
Pros Explained:
- Financial legacy: Life insurance can ensure financial support for family and friends after your passing.
- Pay off debts: Proceeds can assist beneficiaries in covering financial obligations such as a mortgage or other debts.
Cons Explained:
- Higher premiums: Premiums increase as you age due to higher mortality risk.
- Limited eligibility: Age limits may restrict access to specific policy types.
- Lower coverage amounts: Final expense insurance usually has lower payouts.
Methodology
Investopedia’s selection of the best life insurance companies for seniors is based on a comprehensive evaluation of 45 providers. The methodology incorporates data from surveys, financial strength, customer satisfaction, and policy options. Key assessment areas include application and underwriting, final expense policy features, permanent and term policy features, riders, customer satisfaction, financial strength, and cost.
