Should seniors buy term or whole life insurance? – CBS News
Watch CBS News
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms.
By Matt Richardson
/ CBS News
Life insurance offers financial advantages for adults of all ages.
In return for a fee to a provider each month, policyholders can secure financial protection for hundreds of thousands of dollars or even more than $1 million. While it’s generally recommended that you purchase a policy as young as possible, life insurance can also offer appealing benefits for seniors and older adults.
The two main types of life insurance on the market – term and whole – each offer unique protections. They also come with different price points. For seniors considering life insurance, it’s important to understand what distinguishes these two insurance types from each other. This will help ensure that they’re picking a policy that works best for them – and their budget.
If you’re in the market for life insurance then start by getting a free price quote now.
As mentioned, both of these insurance types have attractive benefits. It really comes down to the individual and their personal financial circumstances. Here’s what to know.
Term life insurance is generally better for seniors who want the protection a life insurance policy can provide but don’t want to break the bank to get it. Since these policies last for a set period of time only (hence the name) they tend to be cheaper than their whole life insurance counterparts. And while prices rise as applicants age, term life insurance for seniors doesn’t necessarily need to be expensive.
For a 64-year-old male living in New York, Haven Life quotes a 10-year term life insurance policy in the amount of $150,000 for $98.74 per month. This is a quote for a non-smoking male considered to be in good health. A female with all of the same characteristics would pay even less – a 10-year term life insurance policy in the amount of $150,000 would cost $70.11 per month.
This type of life insurance is generally best for seniors who need a policy now, or for the short-term, but don’t need it for the rest of their life. So if you have people financially dependent on you now (like children) but you anticipate that they will be independent in the next few years, then term may be your best option.
Start by getting a free price estimate so you know exactly what to expect.
Whole life insurance covers the insured until they die. There is no term that will expire and no renewals will need to be completed. This type of policy also comes with a desirable cash reserve that, once accumulated, can be accessed while the policyholder is alive. Because of these two selling points (the length and the cash), whole life insurance policies cost significantly more than term policies.
Still, the price may be worth it for many seniors. This type of insurance essentially serves as a valuable investment tool that some people may want to utilize while alive. But if you’re fine with having life insurance only – and no backup reserve – term life insurance may be the smarter, more affordable way to go.
No matter which life insurance type seniors ultimately elect, they can choose to skip the traditional medical exam, if they wish. Most insurance companies request that applicants sit for a medical exam in order to determine their overall health. But if you’re an older adult concerned that the results of an exam could hamper what you’re offered (or cause you to be rejected in full) then go the no-exam route. No-exam life insurance can be joined on both term and whole policies, giving seniors flexibility when building their coverage.
You can get a free life insurance price quote now.
Life insurance for seniors can be valuable financial protection to have. How valuable it is, however, depends on the individual and the type of policy they choose. Both term and whole insurance types have unique advantages and drawbacks. But both can be secured without taking a medical exam if that’s the route seniors find most beneficial.
First published on February 15, 2023 / 2:03 PM
© 2023 CBS Interactive Inc. All Rights Reserved.
Copyright ©2023 CBS Interactive Inc. All rights reserved.
Quotes delayed at least 15 minutes.
Market data provided by ICE Data Services. ICE Limitations. Powered and implemented by FactSet. News provided by The Associated Press. Legal Statement.