Whole Life Insurance for Seniors: Is It Too Late?
Underwritten by United of Omaha Life Insurance Company
Summary: Despite common misconceptions about age limits and costs, some seniors can still benefit from whole life insurance. With lifetime coverage, tax-free payouts*, and cash value growth, whole life insurance can be a valuable tool for estate planning and financial security in your 50s, 60s and beyond.
In this article:
Misconceptions about whole life insurance for seniorsUnderstanding the benefits of whole life insurance for seniorsMaking a decision about whole life insuranceFrequently asked questions (FAQs)
You might be wondering if it’s too late to get life insurance now that you’re older. The truth is, it’s not. In fact, whole life insurance for seniors can still offer long-term value, some peace of mind, and financial protection for your loved ones.
Many people assume that whole life insurance for seniors is too expensive or unavailable after a certain age. Rather than believing the misconceptions, consider the facts about whole life insurance before determining whether it could be a valuable investment for you.
Whole life insurance is a permanent life insurance plan that helps provide coverage throughout your lifetime. As long as premiums are paid, this is a type of life insurance that can help provide lifelong coverage as well as cash value that builds over time. There are life insurance options for seniors that can be a valuable option, regardless of the amount of time you plan to own the policy.
Misconceptions about whole life insurance for seniors
There are several common myths surrounding whole life insurance for seniors, including:
Whole life insurance may be more expensive than other types of policies, such as term life insurance. Premiums can also go up as you get older. However, many seniors have reasonable whole life insurance policies that may not require a medical exam. Depending on your situation, the benefits may outweigh the costs. For example, you get some peace of mind that comes from lifelong coverage for the amount of life insurance you purchase, as well as the opportunity for cash value growth.
You may think that once you're in 50s or 60s, you're too old for life insurance plans. But that's not true. Most insurance companies, including United of Omaha, provide life insurance policies for people aged45-85 (50-75 in New York).
If your children are grown, you may not have as many family expenses as you once had. However, if you want to provide a legacy for your children or grandchildren or just leave your family with the funds to cover your funeral expenses, a life insurance policy may still be a good idea.
Building up savings is a wise financial move, but there's no guarantee that your savings will cover all the needs that may arise. Many families are left with large medical bills and funeral expenses after the death of a loved one. Even if your savings cover your expenses, there may be nothing left to pass on to your heirs. A life insurance policy with the right coverage amounts may serve as final expense insurance, provide a legacy, or help cover expenses that your savings may not.
Understanding the benefits of whole life insurance for seniors
Even in your 50s, 60s, and beyond, whole life insurance can provide valuable benefits, based on your financial needs and plans. For example, whole life insurance offers:
Lifelong coverage: Unlike term life insurance, which covers you only for a certain number of years, the coverage you get with whole life insurance will be in effect as longas you continue paying the premiums. That means your whole life policy can last alifetime.
Predictable premiums: Whole life insurance comes with a level premium, which means the premium amount is fixed when the policy is issued. The premium is guaranteed to remain the same throughout the contract.
Cash value growth: With a whole life insurance policy, a portion of every premium payment goes to a cash value component. The cash value of your account builds overtime through fixed interest rates. It takes time for cash value to build, so buying a policy later in life may result in a lower cash value than if you had purchased the policy earlier. As your policy's cash value is accumulated, you can access it while you're still living. You can use the cash value to pay your premiums, cover emergency expenses, or supplement your retirement. However, it's best not to use the cash value if you can avoid it, because if you use it and don't pay it back, the death benefit your loved ones receive will be decreased.
Tax-free payouts: Generally, a life insurance death benefit received through a life insurance policy is not subject to income tax. This means in most cases, your beneficiaries will receive a lump sum payment from your life insurance policy, and they will not have to pay taxes on it.
Making a decision about whole life insurance
The decision to invest in whole life insurance, at any age, depends on your financial goals, needs, and the legacy you hope to leave. For many seniors, it can be a practical way to manage end-of-life costs while offering some peace of mind to those you care about most.
If you’re ready to take the next step to determining the right choice for you, Mutual of Omaha can help you determine whether a life insurance policy is the best fit for your needs. Speak with a financial professional.
Frequently asked questions (FAQs)
Should a 70-year-old buy life insurance?
Life insurance can be a valuable financial tool for a person in their 70s, ensuring a tax-free payout for loved ones when they pass. The right life insurance policy can be helpful for estate planning and financial security even after age 70.
At what age is life insurance not worth it?
There’s no specific age when life insurance is no longer a good fit. The decision about whether to purchase life insurance as a senior adult depends on your specific goals and financial situation. For some seniors, life insurance is still a valuable tool for estate planning and financial security.
Is whole life insurance worth it for seniors?
Whole life insurance usually costs more than term life, especially later in life. But it can still be worth it. It offers some peace of mind with coverage that lasts your entire life. It can also provide coverage for final expenses, which can help your family avoid the financial stress that often comes with funeral expenses after losing a loved one. It also builds cash value over time.
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