Updated July 2, 2019 . AmFam Team
As you age, your needs differ from when you were younger, and you'll want to make sure your life insurance coverage is keeping up with each stage life brings. Let's take a look at your options for life insurance as a senior.
Before we take a deeper look at your options, here’s a refresher on the difference between the two most popular types of coverage:
Term life insurance. If you’re looking for a lower cost, temporary coverage, then term life insurance may be the way to go. Keep in mind, term life insurance only covers you at the initial premium for a specific amount of time, for instance 10, 15 or 20 years, and your beneficiaries will receive a death benefit only if you pass away while the policy is active.
Whole life insurance. On the other hand, a permanent life insurance policy, like whole life insurance, usually has higher premiums, but you’re covered for your entire life — as long as you pay your premiums — and you have the opportunity to accumulate cash value. With this coverage, your beneficiaries will be guaranteed a death benefit when you pass away.
So, should you get term or whole life insurance? The type of policy you’ll want as a senior is dependent on several situations. The main question you’ll want to ask yourself is what is my main purpose for having life insurance? Let’s take a look at some common reasons you may want a life insurance policy as a senior and which type of coverage is typically popular for each scenario.
Paying off debts. If your main concern is paying for outstanding debt, you can choose a term policy, like our DreamSecure Term Life coverage, that can expire around the time you expect your debts to be paid off. Let’s say you have ten years left on your mortgage. In this case, you might purchase a ten year term life insurance policy so in the event you were to pass away before the debt is paid off, your beneficiary could pay the remainder of the mortgage with the death benefit.
Financial support. Does someone depend on you for financial support? Whether it’s your spouse or a loved one with a disability or special needs, a whole life insurance policy guarantees some financial protection, if you pass away, to help them maintain their current living standards.
Paying for final expenses. Having life insurance can help pay for the often pricey costs of final expenses, such as funeral costs. On average, a funeral runs from $7,000-$10,000, which could be a hefty price out of your loved ones’ pocket when you pass away. If you’re looking to cover final expenses, a DreamSecure Senior Whole Life Insurance policy can help ensure those expenses will be taken care of, while a term policy runs the risk of expiring before you die. Learn more about how life insurance helps pay for final expenses.
Leave money to your heirs. If you want to leave a legacy to your children or grandchildren, a permanent policy, such as American Family Life Insurance Company’s DreamSecure Whole Life Insurance, offers coverage for the rest of your life. That means your beneficiaries will get a payout upon your death as long as you pay your premiums. You can also allocate a portion, or all, of the death benefit to a charity of your choice. Take a look at your different options for choosing beneficiaries.
Determine how much life insurance you need with our life insurance calculator (Opens in a new tab). It’ll give you a better idea of how much coverage you need to protect what matters most. Or, connect with an American Family Insurance agent (Opens in a new tab) to discuss your options and get a customized policy.
This is a brief description of coverage and is subject to policy and/or rider terms and conditions which may vary by state. Fixed and guaranteed premiums are statements about the policy as determined at issue, and any changes made to a policy may affect the premium and are subject to our underwriting rules. The words lifetime, lifelong and permanent are subject to policy terms and conditions. DreamSecure Whole Life Insurance policies mature at age 121. Please check with an American Family agent for details on coverages and restrictions.
Policy Forms: ICC18-33 (10), ICC18-33 (15), ICC18-34 (20), ICC18-35 (30), L-33 (10)(ND), L-33 (15)(ND), L-34 (20)(ND), L-35 (30)(ND), L-33 (10)(SD), L-33 (15)(SD), L-34 (20)(SD), L-35 (30)(SD), ICC17-225 WL, L-225 (ND) WL, L-225 WL, ICC17-225 WL, ICC17-227 WL, L-227 (ND) WL, L-227 WL, ICC17-228 WL, L-228 (ND) WL, L-228 WL