January 27, 2023

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5 Tips for Seniors Buying Life Insurance for the First Time

Life insurance can be trickier to find as a senior. The policies tend to cost more as you get older, making options seem limited.

Taking a few factors into consideration may help you to find an ideal policy. Consider your current and future needs, the type of policy, and the cost. Here are some tips for seniors getting life insurance for the first time.

1. Figure out your current and future needs

Depending on your specific needs, certain life insurance policies may be better suited to you. Seniors with grandchildren, for instance, may be concerned about covering their family’s living expenses and paying for future education. If that’s the case for you, a policy with a larger benefit could be ideal. Other seniors may want to make sure their loved ones can easily cover funeral costs once they pass away. In that case, finding a policy that’s enough to cover end-of-life expenses may be best. Make a list of your current and future needs to help guide you in finding a senior life insurance policy.

2. Determine how much coverage you’ll need

When you’ve made a list of your needs, you’ll have a better idea of how much coverage you’ll need. Next, consider the average cost of certain expenses you’ll want taken care of. As an example, the average cost of funerals is $7,000 to $12,000. So, final expense life insurance policies can provide a death benefit big enough to cover a funeral and other final expenses. And if you have young grandchildren, the average cost of their college tuition and fees can be around $19,000 a year. So, it may be a good idea to add $100,000 of coverage per child to cover college expenses.

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3. Decide between term and whole life insurance

Term and whole life insurance both have advantages for seniors. If affordability is important to you, term life insurance may be more suitable. The average annual cost of a 20-year, $250,000 term life insurance policy for a 70-year-old male and female is $5,820 and $4,716, respectively. The cost of whole life insurance for the same 70-year-old male or female will be more expensive.  

While term life insurance may be more affordable, it’s a temporary policy. So, when your policy ends, a new one will cost more because of your age. A benefit of whole life insurance is the premium cost remains the same, and you’ll be covered for the rest of your life. Whole life policies also have a cash value growth component that can help you build wealth over time. 

4. Get life insurance quotes

The cost of getting life insurance will vary depending on the company, so it’s smart to compare quotes. Some websites will give you quotes from multiple insurance companies to help you make a decision. You’ll need to provide basic information such as age, gender, and lifestyle.

5. Consider life insurance riders

Life insurance riders can provide additional financial security to your coverage. Inflation riders, for instance, can help boost your life insurance policy’s value to keep pace with inflation. And a family income benefit rider allows your family to receive a steady flow of monthly income in the event of your passing. It’s important for seniors to review the different types of riders offered by life insurance companies to see if any options are worth pursuing. 

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The bottom line

Getting a life insurance policy for the first time as a senior may seem daunting. But by figuring out your current and future needs, deciding on a coverage amount, and choosing a policy, you’ll be on the right track. Additionally, getting multiple quotes can narrow down your options, and adding life insurance riders can help you customize your coverage. Consider all these tips to help you decide on the right life insurance policy for your needs.