Home Know Your Money The Pros and Cons of Life Insurance for Seniors

The Pros and Cons of Life Insurance for Seniors

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Life insurance is designed to protect your loved ones financially after you passed away. You might hear from people many advantages and how it is essential to have a life insurance policy, especially if you are a senior. It sounds too good to be true. Is there any disadvantage of life insurance? Did anyone ever tell you the opposite thing about life insurance? If none, then let us show you the advantage and disadvantages of life insurance, a whole picture. 

The advantages of life insurance for seniors

There are many benefits of life insurance, but we will list down the three most common advantages.

Life insurance is affordable

Instead of buying whole life insurance, which is very costly, because it’s designed to protect you as long as you pay, you may think of buying a term life insurance, which covers you for a specific number of years (like 10, 20, 30 years). Compared to whole life insurance, term life insurance is much more affordable. Healthy men over 70 years old could buy one a ten-year term life insurance with the coverage of $200,000 death benefit for around $100 – 420$. Healthy women with the same policy will pay $65 – $ 195 only. You will be paying as little as $15 per month, and you can lower your premiums to fit your financial status. 

The process is easier and faster than whole life insurance also. You can ask for a quote by just answering some questions online or over the phone. Many insurance companies accept applicants online now a day. All you need to do is to apply, choose the policy that fits and meets your needs. If approved, your coverage starts right away. Some companies may ask you to have a medical exam (don’t be worried, you don’t have to pay anything if your application gets rejected or approved). If you need any assistance, you can always contact us; our experts are happy to help.

Life insurance gives your loved ones peace of mind

If your husband/wife or your children are financially dependent on your income, your life insurance will give them peace of mind, knowing that the policy will help them with financial needs when you are no longer around. Your children can still go to college; your life partner doesn’t have to change their lifestyle. If your coverage is big enough, it might be able to cover your mortgage and unsettled debt too. 

This is the easiest and cheapest way to make sure your loved ones won’t suffer financially if you die. 

Insurance payout is tax-free

If you leave this earth during your life insurance term, the amount the insurance company pays to your beneficiaries is tax-free. This is one way to protect money. If you inherit your house/land/property to your heirs, they have to pay estate tax after you passed away. But with life insurance, the money goes directly to them. Many people decide to invest in life insurance rather than property to avoid taxes.

Term life insurance has flexible policy terms

You can choose how long your term is (10, 20, or 30 years) and how much coverage you want. Some term policies let you increase or decrease the coverage and premiums over time to meet your financial status. 

The disadvantages of life insurance for seniors

Life insurance is expensive if you are unhealthy and old

Yes, you read it right. If you ever think of having a life insurance policy, you should buy it when you are still young and healthy. It’s because your premiums are based on your health condition, your age and your family medical history. The older you are, the risker for life insurance companies because it increases your risk of dying early, then the higher rated insurance companies will charge you. Some life insurance companies in Asia, like Vietnam, don’t cover your existing illness. So try to have a life insurance policy as soon as you can to protect your loved ones financially if you die. 

For example, a $500,000 coverage life insurance policy will cost you around $67/month or more if you got it in your 70s

Whole life insurance is constantly pricey

Unlike term life insurance, whole life insurance protects you as long as you continue paying your premiums. Typically, it’s around $100 – $250 per month. It’s too much, even if you will get coverage out of it. A study by the Society of Actuaries found a solid 45% of people cancel their whole life insurance policy within ten years. If you are old, you don’t have any loans or mortgage, no dependents, then don’t look for whole life insurance. 

The cash value component is a weak investment

Though whole life insurance gives you cash value, if you compare it with the bank interest or any other kind of investment like estate, it’s still far below. So, if you want to have higher returns, you can invest your money in a term insurance policy and with the rest in other investment tools. By doing this, you secure your loved ones and secure your money too. 


So, should you or should you not buy life insurance? The answer depends on your financial status, your health condition, your age, and your lifestyle. But one thing for sure is life insurance is one of the best ways to protect your loved ones financially. 

Remember, life insurance is the cheapest to get when you are young and healthy. So, if you are seniors but you are healthy, get one as soon as you can before the mark of time comes.

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