The Best Life Insurance for Seniors
Your golden years deserve golden coverage
The best life insurance for seniors is whatever makes the most sense for their unique situation. Sound vague? It has to be. Depending on their age, health, and goals, a term policy may be just as viable as a permanent one. But for most seniors, a Guaranteed Universal Life (GUL) policy is a reliable option, and could even end up having cheaper premiums. To find the best, we consulted with two senior life insurance experts, then found providers that include a wide range of death benefit amounts, terms up to 120 years of age, and an accelerated death benefit rider.
North American Company for Life and Health Insurance
We liked that policies start as low as $25K, and that a flexible death benefit rider means you can access funds for strokes, heart attacks, and more — not just terminal illness. However, a medical exam is required of all customers.
Chances are, your need for life insurance at age 55 is for entirely different reasons than at age 35. Likewise, what you pick as your policy will be different: Your best option might be a term policy, a permanent policy designed to only cover final expenses (aka “burial insurance”), or maybe a permanent policy with a larger amount to go to your beneficiaries.
We’ve already walked through what makes the best term life insurance, and burial insurance under $25,000 is a relatively straightforward product that we’ll address later. But if you want a larger benefit that will pay out no matter when you die, your best bet is very likely Guaranteed Universal Life (GUL) insurance. Our favorite GUL policy comes from North American Company for Life and Health Insurance, which offers limits as low as $25,000 for individuals up to age 80, and an accelerated death benefit rider that is flexible enough to include heart attacks, strokes, and memory loss (as opposed to just terminal illnesses). But as with all insurance, shopping around to find the best policy at the best price for you is important — and you’ll need to compare quotes.
Why We Picked GUL
“Burial insurance” doesn’t actually exist. It's just a term for any policy that’s meant only to cover funeral/burial costs. The most common form of burial insurance is “simplified issue” whole life, so called because it doesn’t require a medical exam. But GUL policies can also be as low as $25,000 — small enough to function as a cheaper alternative to these, since they offer the chance to prove your health via medical exam and thus lower your rates.
There’s no single type of life insurance that’s best for all seniors, but we chose to focus on GUL because it’s the best guaranteed value out there: It combines the permanent coverage of whole life insurance with the lower cost of term. Think of GUL as term life insurance that covers you through age 90, 95, or even 121 — the rest of your life. Another reason we like GUL policies: The premiums don’t change from year to year.
Unlike traditional whole life, GUL doesn’t accrue much cash value (if any) within the policy, limiting your ability to borrow from it during your lifetime. That might sound like a bad thing, but it also makes GUL insurance much cheaper, since you’re not also paying to fund the cash value. And while traditional whole life policies are still popular (the American Council of Life Insurers estimates that they make up 64 percent of all policies purchased in the US), that owes more to public unawareness of alternatives than to the actual quality of the product.
“Most people are unaware that there are better value alternatives to traditional whole life, such as guaranteed universal life.”
How We Found the Best Life Insurance for Seniors
Once we landed on GUL as the best option for the most seniors, we used A.M. Best’s Rating Services tool to make a list of 49 top-rated life insurance companies. We then checked each to see whether each one offered guaranteed universal life insurance (it turns out many don’t, including some of the big names from our review on best term life insurance policies, like TIAA, Amica, Transamerica, and State Farm). For the ones that did, we looked for the following criteria:
Why we didn’t factor in price. Life insurance is priced for everyone individually. The biggest factors are age and current health, but your heredity, driving record, and credit score also have an impact. There’s no shortcut for finding the best policy for the best price tailored to your specific insurance profile — you’re going to have to shop around no matter what.
Financial stability. An insurance company is only as good as its ability to pay on a claim. Our top picks all get excellent financial strength marks from the major independent ratings agencies: A.M. Best, Moody’s, and Standard & Poor’s.
Nationwide availability. In the interest of recommending to a wide audience, we only considered companies that write guaranteed universal life insurance in at least 40 states, with no special eligibility requirements.
Death benefits as low as $50,000. Not everyone needs — or can afford — a high death benefit. If all you want is to cover your funeral or an outstanding loan, even $100K of coverage can be overkill. We only considered companies that offer GUL death benefits of $50K or less (the lowest we found was $25K).
Issued through at least age 80. The Centers for Disease Control and Prevention pegs today’s average life expectancy at 81.2 years for women and 76.4 years for men. You may live well beyond that, but those numbers still affect your options for life insurance, because insurers charge more for people who are statistically closer to death — if they’ll insure them at all. Most companies who issue GUL will do so through age 85 as long as you submit to a physical exam with blood and urine testing. But we wanted to provide options for seniors who don’t choose to go through a medical exam — and in those cases, most companies will only issue GUL through age 80.
Guaranteed coverage through age 120. GUL functions like term insurance in that it technically expires when you reach a certain age; it’s just that you’re not expected to get there. Most insurers allow you to have your GUL policy extend through age 90, 95, or all the way to 120. While a policy that lasts to 95 will cost less than one that lasts to 120, it won’t be worth anything if you outlive it. We therefore required companies to offer GUL coverage through age 120 to truly “guarantee” the death benefit.
Accelerated death benefit for terminal illness. Typically present in the form of a rider (for which you have to qualify via medical exam), this provision allows you to access a portion of your death benefit early if you’re diagnosed with a terminal illness. It can help cover palliative treatments and other end-of-life care, granting a measure of comfort in a difficult hour. Pretty much all insurers offer this rider free of charge if you’re in decent health at the time of purchase, but they vary in the percentage they’ll allow you to access early.
Our Picks for Best Life Insurance for Seniors
Best Overall - North American Company for Life and Health Insurance
North American Company for Life and Health Insurance may not have a flashy name, but its Custom Guarantee GUL policy checks all the important boxes and then some. It’s available in death benefit amounts as low as $25,000 — that low a level is rare — and to seniors through age 85. Its accelerated death benefit rider can also be used in response to illnesses that aren’t necessarily terminal, such as heart attacks, strokes, and memory loss. To top it off, the company has the best financial strength ratings of any of our top three picks, including an A+ from both A.M. Best and Standard & Poor’s.
However, it’s important to note that North American does require a medical exam to issue the policy, something many seniors won’t want to go through. It can help lower your rates if you’re fairly healthy, but can also keep you from being approved if you’re not.
Best with No Medical Exam - American National
If you’re in decent health, undergoing a medical exam during your life insurance application is a good idea, since it’s likely to help lower your premiums. But many seniors don’t want to deal with the hassle of an exam, and if you’ve had a recent setback, it could also be the reason you’re denied coverage. American National’s GUL policy is very similar to North American’s, with one key difference: Coverage amounts from $25,000–$250,000 can qualify for no medical exam underwriting (if you want more death benefit, though, the exam is a must). Skipping the medical exam doesn’t necessarily mean you’ll be approved, as there’s still a health questionnaire to fill out. It will also result in higher premiums as compensation for the company effectively “taking your word for it” that you’re likely to live awhile and keep paying premiums — but at least you’ll be covered.
American National also stands out for allowing up to 100 percent of the death benefit to be “accelerated” in the case of a terminal illness (North American maxes out at 75 percent). While it’s rated practically the same as North American for financial strength (which is to say excellent), there is one drawback to American National’s Signature GUL policy: It’s only available through age 80.
Best for $50,000+ Coverage - Mutual of Omaha
If you’re looking to leave behind more than just funeral expenses, Mutual of Omaha is a great option for higher death benefit amounts. The company has exemplary financial strength and will issue its GUL policy to seniors up to age 85. Its accelerated benefit rider allows up to 80 percent of the death benefit to be accessed early, and like American National, Mutual of Omaha also grants the option to bypass a medical exam for death benefits up to $250,000.
Did You Know?
Buying sooner is cheaper and safer.
No matter what, the older you get, the more expensive life insurance is. If you know you want it, don’t wait — and rest assured that your dependents are protected.
GUL’s dependability sets it apart from other types of universal life insurance.
Universal life is a type of permanent life insurance and GUL is a subtype of that. We prefer GUL because the premiums for GUL always stay the same, making it easy to budget to keep your coverage active. While other types of universal life have the potential to be cheaper than GUL, their premiums are tied to other factors like interest rates or the stock market, so they could also wind up being more expensive. With non-guaranteed universal life, a market downturn or low interest rate climate (like today’s) could result in your premiums going up without warning, and you might not be able to keep your coverage in force.
"A guaranteed level premium is particularly valuable today, because the sustained period of low interest rates has made rate hikes more likely."
Beware of low-cost life insurance offers that sound too good to be true.
Maybe you’ve seen ads on TV for life insurance starting at $1 per month and thought, “What do I have to lose?” Unfortunately, it may be more than you think. Many AARP-sponsored whole life policies raise rates every five years. If you’re still living, these can eat away at your savings to the point where you have to cancel the policy with nothing to show for it. If you get an unsolicited policy brochure in the mail, or request information from TV, make sure you read the fine print carefully to see how much the policy will cost over your projected lifetime, not just the first few years.
“Simplified issue” and “guaranteed issue” policies have extra built-in costs.
Insurance companies often market products as “guaranteed issue” or “simplified issue” because they don’t require a medical exam. No one loves getting poked and prodded, but there’s a trade-off in the form of higher premiums, since the company is taking on more risk given less information about your health. If you’re fairly healthy and don’t mind undergoing an exam (which can usually be conducted in your home), it will save you significantly on premiums.
Death benefits under $25,000 are typically “simplified issue” only.
If you simply want so-called “burial insurance,” you’re probably looking at death benefits of under $25,000. But you may not know that under this threshold, most companies only offer “simplified issue” policies (which, because of those built-in extra costs, are more expensive per dollar of coverage). While the median price of a funeral in the US today is about $7,200, it can often run significantly higher. Be sure to shop around and compare GUL policies of $25,000 or more that will let you take a medical exam and potentially lower your rates.
"If you're in reasonable health, a GUL policy of $25,000–$50,000 can be a cost-effective alternative to traditional burial insurance."
If you’re under age 70, term might still be your best option.
We’ve dedicated this review to permanent insurance, but if you haven’t retired yet and still have a temporary need for coverage, term could be your best bet. There are a few extra factors to consider when buying term insurance as a senior. First, if you’re 70 or older, term lengths longer than 15 years generally aren’t available. Also, all life insurance gets more expensive the older you get, so if you’re older than 70, it’s worth comparing the cost of a GUL policy too — you might be surprised how close it is to term. In general though, the same rules apply for seniors buying term as for new parents: Look for highly rated, flexible coverage with level premiums, and shop around for the best price.