How Much Life Insurance Do Seniors Need?

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  • Post last modified:October 2, 2019

Life insurance is something that most seniors purchase to help their loved ones avoid any financial hardships they might leave after they pass away.

According to life insurance statistics in the United States, the reason why most people purchase life insurance is to cover their final expenses or provide a source of income for their loved ones after the event of their death.

So, the right life insurance option depends solely on what your needs are. There are many types of life insurance policies you can choose from, and in this article, we will be talking about how to decide how much life insurance you need.

How Necessary It is for Seniors to Have a Policy?

Culturally, people believe that becoming a senior means experiencing a wonderful era in life, but it is actually a struggle to live.

The majority of senior citizens depend on fixed incomes, are semi-retired, retired, or still working. Over five million American workers are over 65 of age and are working full-time.

So, seniors, in this case, should prioritize what bills they should pay over others like medicine, food, mortgage, car loan, etc. If you depend on a fixed income, and at the same time you don’t have as much energy as a younger person, something has to support.

That being said, should seniors have life insurance coverage that can protect their loved ones after their death? The answer is simply yes. Many experts recommend purchasing life insurance coverage. But keep in mind that the older you are, the more expensive your policy would be.    

Reasons Why Seniors Need Life Insurance

Before you purchase any policy, contemplate the idea for a minute. And you may be surprised over discovering the reasons for having life insurance coverage this late.

Consider the following reasons for getting life insurance for seniors.

Coverage for Your Current Income

For some senior citizens, retirement is not a choice because life circumstances and the passion for work keep them in the workplace. If you plan to continue working, life insurance can help you protect your savings and place your income upon your demise. Your beneficiary can then benefit from such coverage, meaning that you will not keep worrying when the time of your death comes.

Helps You Paying Funeral Expenses

Since the average funeral cost is $10,000, it falls among the highest 5 life expenses. Without a policy to cover these costs, your loved ones will be left with bills and the burdens that come along with them. A life insurance plan can eradicate such a burden by providing them with the funds they need.

Covers Personal Debts

It’s no surprise that life insurance has no limits on how the funds are to be spent. Thus, your family can use those funds for several purposes: to pay for medical bills, taxes imposed on estates, balances of credit cards, etc.

Life insurance provides another source of income for your family without the need to sell some of their assets.

Pay Loan Debt

If you have significant loans, a life insurance policy can be in order. Such a payout can help your family get rid of this burden after you pass away. It’s worth mentioning, by the way, that a plan that outlasts the loan is not recommended.

Helps You with Your Business

Life insurance coverage can help protect your partners and employees in your business when you pass away. The payout left to your beneficiary can be used in offsetting the loss of your role in the business. In this case, the business you spent your life building is protected through your demise.

It Provides Peace of Mind

Because the world is an unstable place, buying a life insurance policy provides you and your loved ones with the sought-after peace of mind. Although financial provision doesn’t heal your family’s grief, it can at least stop them from worrying about their financial survival. You can do nothing about this after your demise; you can only address it today.

Leaves a Legacy to Your Family

For most seniors, children bring meaning to life. So, spending time with them proves a joy. Life insurance plans provide a way for seniors to give their loved ones tax-free gifts after they pass away.

It Gives Your Family a Boost

Life insurance offers your family members a helping hand in terms of the financial hardships they might experience after you pass away. Paying college fees, mortgage premiums, etc. are great possibilities. In addition, the policy’s cash policy provides social security benefits for your beneficiary as additional income.

Available Options for Seniors

For seniors, life insurance policies might be more expensive than policies for youngsters. However, there are still some available options they can choose from.

Term Life Insurance

It’s no surprise that term life insurance is the best option for the majority of applicants including seniors since its coverage is provided at the lowest possible price.

It provides coverage for a certain number of years (often from 10 to 30 years), and the premiums are the same during the whole term of the policy.

Let’s say you are planning to purchase a 10-year term plan with a death benefit of $100,000; you will need to pay the same premiums annually for 10 years, and your beneficiary will get $100,000 if you pass away during that period.

It’s worth mentioning that if you pass away after that period, you won’t receive anything! In this case, there is a policy called annually renewable term life insurance whose premiums increase every year during the term of the policy.

Guaranteed Life Insurance

This one ends at the age of your choice. That is, it can be like term life insurance or can last until you pass away. To your surprise, your application to this policy is guaranteed to be accepted, no matter what your age is and what your health status is. But, it needs higher premiums and has no cash value option.

Guaranteed policies are beneficial especially for seniors in many scenarios: leaving some legacy funds, avoiding any estate taxes, and paying for funeral expenses.

What Expenses Should Be Covered?

Seniors usually get life insurance to cover most or all of the following expenses:

Monthly Bills

A life insurance policy can provide coverage for the monthly bills your household receives on a monthly basis such as electricity and water bills.


If you have debts, or if people will still owe you money after your death, your beneficiaries can pay off those debts.

Child Care

If you, as a senior, have children or grandchildren who financially depend on you, a life insurance policy can cover their needs from A to Z and offer them a great income on a monthly basis.

College Fees

Life insurance covers college tuition for your children after you pass away. It also provides you with peace of mind that they won’t leave their colleges after the event of your death.

Death and Funeral Expenses

Once you pass away, your insurer covers your final expenses from A to Z including your funeral expenses.

How to Calculate Your Coverage Needs?

A simple way to calculate how much life insurance you need is by multiplying your annual income by a number by 10 and 15. For example, if your annual income is $50,000, you will need around $500,000 worth of coverage once you pass away.

Although this method is helpful, it is still very simple to generalize it since it does not take into consideration and future duties such as your assets and family circumstances.

To better calculate your life insurance needs, start by calculating your financial obligations and your available assets, and then measure the difference between them. The shortfall would be the amount of life insurance you need.


Here are some of the questions asked frequently by seniors looking for affordable life insurance plans:

Question 1: What are the best life insurance companies for seniors?

  1.   Banner Life
  2.   American National
  3.   Lincoln Financial
  4.   Mutual of Omaha
  5.   New York Life

Question 2: Can seniors purchase life insurance?

Yes, they can. But, premiums can be higher for seniors. Seniors can find comparatively cheap policies by working with agents specialized in deciding the right coverage amount for them.

Question 3: Which is best for seniors: term or whole life insurance?

Term life insurance is the best choice for people including seniors since it offers coverage at low premiums, especially if the applicant is in great health.

Final Thoughts

Life insurance coverage should be a significant part of your financial life and loved ones’ future. But take your choices carefully into consideration and calculate your needs before making your mind which policy to purchase.

Again, guaranteed life insurance coverage can help you in case you are not eligible for other policies.

Linda Chavez

I'm a burial & senior life insurance expert, independent agent, Founder & CEO of Seniors Life Insurance Finder. I have been working in this sector since 2004 and established my own company in 2014. I have a team of seven members, and we are trying hard to share the knowledge we've gathered. We know how difficult often it is to find an affordable policy. Hence, we are doing our best to help you.