Why (& How) to Get Life Insurance as a Senior

By  //  June 26, 2023

It may surprise you, but there are plenty of reasons to buy a life insurance policy in your older years.

Sure, taking out a policy while you’re young is more affordable, but if you didn’t have the funds available to commit to life insurance back in the day, there’s still time to consider it now. Life insurance for seniors is not as ridiculous as you might think.

There are good reasons reliable insurance companies continue to offer policies to people in their golden years. Read on to find out how you can benefit from a life insurance policy as a senior. 

Get Benefits While You’re Still Living

Did you know some policies allow you to delve into your financial benefits before you die? We’re not talking about a get-rich-quick scheme, but life insurance is a valid way to prepare for worst-case scenarios like terminal illness or long-term care. 

Accelerated Death Benefits 

Accelerated death benefits (ADB) are funds you can cash out from your policy if you meet qualifying conditions. Most of the time, the qualifying conditions are physical circumstances that drastically alter your expected life span, usually a terminal illness.

There are even some term life insurance policies that provide ADB. Remember that these benefits, once dispersed, are subtracted from the amount your beneficiary will receive upon your death. 

Life Insurance Policy Dividends

Insurance companies make money off the premiums you contribute toward your policy, and many policies allow you to reap the benefits. These benefits, called dividends, can be paid out to you while you are still alive or reinvested into your policy. 

The good news is that dividends are not taxed as income. The most common policies to provide dividends are universal life insurance and long-term disability. 

Borrow Money

One more consideration that might convince you to keep or buy life insurance as a senior is that you can borrow against the cash value of your life insurance policy. This could provide the funds for the dream vacation you’ve always wanted.

Here’s a bonus: If you reinvest policy dividends into your policy, you raise the amount you can borrow against. In addition, borrowing from your insurance does not require a credit check.

Lighten Your Financial Burden on Loved Ones

Late in life, it may hit you that your money will outlast you. A life insurance policy at this stage can benefit you through accelerated death benefits or borrowing, but other policies can financially assist your loved ones.

Burial Insurance 

Burial insurance is one of the most popular policies senior citizens will take out. Burial insurance offers the advantage of not requiring a medical exam, and you usually can’t be denied. Consider naming the executor of your estate as the beneficiary of this policy.


However, you must read the fine print or get detailed explanations from an agent to determine what happens if you die in the first couple of years of taking the policy. Some policies limit payout amounts if you die earlier than they consider reasonable.

Estate Tax Funding

With looming tax reforms that could significantly increase estate taxes, a life insurance policy is an attractive option to cover those taxes. Covering taxes is wise if you plan to pass your estate to an heir. Naming your heir as your beneficiary will allow them to foot the cost of inheriting your estate without liquidating any assets. 

Inheritance Without Taxes

Let’s say you don’t have an estate to pass on. Taking out a life insurance policy as a way to leave a legacy is an excellent option in your later years. If you have a mortgage or medical debt, your family could face financial hardship after your passing.

You should consider life insurance if you want to provide an inheritance or pay off debts that will remain after your death. And compared to estate taxes, which are due within a year of death, a life insurance payout is tax-free. 

Policies for Seniors Are Available, With Some Extra Work

This life insurance talk might make you wonder, “Where can I sign up?” Unfortunately, an initial internet search might not offer excellent results. 

One of the biggest drawbacks of finding life insurance late in life is that few companies offer online applications for these policies. They make it pretty hard to find specific policies, but these policies do exist. Do not be deterred.

You may want to start by checking into the half-dozen top life insurance companies for seniors.

Read Customer Reviews

Reading what other people in similar situations say about their options can be very helpful. Read customer reviews about how helpful the providers are and find out which companies are most trustworthy. Also, read life insurance forums online to arm yourself with terminology and red flags.

Speak With Agents to Find Options

When you have narrowed down what and who you are considering taking a policy with, it’s time to talk to an agent. If you go with an independent agent, you will hopefully get unbiased advice. The advantage of speaking to an exclusive agent is that they know the ins and outs of their policies, which is important since getting a policy late in life can be tricky.

Maria Hanson writes and researches for the life insurance comparison site, LifeInsurancePost.com. She is passionate about helping people understand their options regarding insurance and finding their best fit.