Should Older Adults Buy Life Insurance?


One of the main benefits of life insurance is ensuring that your dependents would be provided for in the event of your death. So if you’re an empty nester who doesn’t already have a life insurance policy, you may feel life insurance isn’t essential, especially if you own your home and have enough savings to cover retirement and end-of-life expenses. Still, life insurance for seniors can have some benefits:

1. It can also cover long-term care

Some combination life insurance policies fold in long-term care insurance. They can be quite expensive—upwards of $75,000 for a one-time premium payment—but may provide up to six times that in benefits were you to need long-term care, which can easily top $50,000 a year. If you end up not needing the long-term care benefit, your beneficiary would still get a death benefit.

2. It can help pay ongoing bills

Whether it’s rent, mortgage, or property taxes, life insurance can ensure that your surviving spouse won’t be saddled with bills they can’t pay.                                                                                                  

3. It can pay one-time expenses

Even if you have robust assets and are financially comfortable, it may take a while for your heirs to receive any funds from your estate as your will goes through probate. Since life insurance is paid in a one-time sum and isn’t subject to probate, that money can be there to settle bills relating to end-of-life and funeral expenses, so your own assets won’t have to be touched.

4. It can bridge the gap before Social Security benefits are paid

Social Security survivor benefits for your spouse or other family members may take a few months to process. Life insurance can provide necessary funds during that time.

Should you buy life insurance?

While there is no age cutoff for life insurance, the downside of purchasing a life insurance policy as an older adult is that your options may be limited, depending on your age or health. While term and universal life insurance policies are available at any age, term life insurance policies, in particular, can be challenging to get as a senior. For example, a 75-year-old would be unlikely to get a policy beyond a 10-year term. And some universal life insurance applications may be denied due to health factors, and premiums can be quite expensive.

Bottom line: As with so many things in life, there’s no such thing as too late. Having a life insurance policy in your golden years can protect your loved ones and your financial legacy. Of course, sometimes a life insurance policy does not make sense. Speaking with a financial advisor about your full financial situation and talking through some possible scenarios, including how funeral expenses would be paid and how your spouse would pay living expenses after your death, can help you find the best strategy for you.

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