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Do seniors need life insurance?

Thinking long and hard about their financial options
Despite the conventional wisdom many seniors could benefit from having life insurance. Getty Images

A comprehensive life insurance plan can provide peace of mind and financial security both for policyholders and their loved ones. 

In exchange for a monthly fee to a provider, the insured can obtain a policy for hundreds of thousands of dollars (or even more than $1 million). A payout will then be provided to beneficiaries in the event of the policyholder's death. The insured could also potentially use it as a cash resource while still alive.

While the benefits of having life insurance are substantial, the advantages of having a policy vary among policyholders. The upside of young people having life insurance, for example, is different than it is for seniors.

But do seniors need life insurance? And if so, how much should they have? That's what we will discuss in this article.

If you're in the market for life insurance then start by getting a free price quote so you know exactly what to expect.

Do seniors need life insurance?

If you're a senior considering life insurance there are a few factors to consider. Here are three.

The type of policy you want

Life insurance comes in several forms. This includes term, whole, no-exam and more.

However, the best type of life insurance for a senior is dependent upon their goals. If you're older and just want to cover a select time frame, then term may be the way to go. Conversely, if you're interested in a plan that has a cash value then whole may be better. Just note that whole life insurance policies take time to build cash reserves so immediate (or near immediate) access to cash in the policy is unlikely.

Both whole and term can come in no-exam forms (in which you won't need to take a medical exam to secure it), so consider that, too.

The goals for the policy you get

When young people get life insurance the reasons why are typically clear: to support their spouse and young children. Or maybe they want to have enough so that loved ones can pay off their mortgage or student loans in their absence.

But what are the reasons why a senior should take out a policy? Do you want to leave a payout to a loved one? Do you want a policy you could potentially access for cash? Or is it something else altogether?

Knowing why you want a life insurance policy at an older age will go a long way in determining which policy you get (and for how much). Answer this question honestly and you'll know if a life insurance plan is a necessity … or just nice to have. 

Get a free price estimate now and find out what you're eligible for.

The amount you can afford

Maybe you've already determined the type of life insurance you want and understand the goals you want to achieve. Then you'll need to move on to affordability.

Remember, life insurance only becomes more expensive as you age and as health issues become more frequent. That cost will be reflected in your monthly premium. 

Unfortunately, life insurance doesn't lend itself to one, standardized recommendation. If you can afford (and want) a robust life insurance plan then you may be able to secure one, albeit at a higher rate. On the other hand, if you want a plan that would just cover expenses in the event of your death, then you may be able to obtain a policy for a lower cost.

Know your budget and then match it to the above two factors to find the best plan for you and your loved ones. 

The bottom line

So, what's the answer to the question "do seniors need life insurance?" It depends. 

Some seniors may very well benefit from (and actually need) a policy like term life insurance to protect themselves and their relatives. Other seniors may already have all the economic security they need and have family members or friends who are financially independent. Those seniors may just need a minimal policy or they can consider forgoing life insurance completely.

Seniors should do a realistic appraisal of what they may need and what they can afford before securing their life insurance policy. Start today with a free quote so you have a better idea of what to expect. 

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