Life insurance is a form of financial protection that pays money to your spouse, children, or organizations after you die — these are your policy’s beneficiaries. If they receive a death benefit, your beneficiaries may use their payment however they want.
If you’re not sure whether you need life insurance or not, we can help. Our brokers can answer your questions, find a policy that works well with your goals and coverage needs, and compare quotes so you get the coverage you need at the lowest possible price — all for free.
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.
Does life insurance still make sense for older adults?
Life insurance does still make sense for some older adults. At this stage in your life, it may make sense for you if you want to:
Avoid passing any debt along to your loved ones after dying.
Pass along a large benefit to your loved ones that they can live off of.
Set up a buffer against estate taxes and protect your family’s high net worth.
Collect just enough money to pay for your funeral and burial services.
Life insurance may also make sense if you are saving up for retirement, especially if you have more debt than savings. If you die, your spouse or partner may be able to rely on your policy’s death benefit to cover their expenses without depleting their retirement savings.
What types of life insurance can older adults get?
There are two main types of life insurance that most healthy older adults can choose from:
Term life insurance: Term life insurance lasts for a set number of years (usually between 10 and 30). Your beneficiaries may receive a death benefit if you die while your policy is active — but not after it ends.
Permanent life insurance: Permanent life insurance is meant to last for your entire life, as long as you keep up with premiums. There are many types of permanent life insurance, and your death benefit (and the cash value component these policies often have) depends on the type of coverage you buy.
Most other types of life insurance offer either term or permanent coverage. Understanding the basic differences between term and permanent life insurance can make it easier to decide which you need.
Read more about what kind of life insurance coverage older adults may need
How much life insurance do older adults need?
Older adults likely don’t need as much life insurance as younger people do, but there’s not an exact amount of coverage that’s right for everybody.
One way to estimate the amount of life insurance you need is to add up the debt you have, along with your day-to-day expenses. Subtract the value of your assets from this number — that includes your savings and retirement accounts, not the value of your home and other illiquid assets.
What's left is close to the amount of life insurance you may need.
When can you no longer get life insurance?
As long as you’re in good health and haven’t had any age-related medical emergencies, it may still be possible to get life insurance in your 60s, 70s, or 80s depending on the coverage you want.
It’s difficult to get term life insurance once you’re in your 80s (though you may be able to renew a current policy). At this age, you may have better luck getting permanent coverage — some life insurance companies will offer you coverage until you’re 85.
Is it possible to get life insurance without a medical exam?
Yes, it’s possible to get life insurance without taking a medical exam. Neither guaranteed issue nor simplified life insurance require medical exams — though simplified life insurance requires you to fill out a medical questionnaire.
Both of these types of life insurance pay small benefits (usually up to around $50,000) that you’d use mainly to cover end-of-life expenses, like a funeral and burial.
