Some of the most satisfaction I get from being a broker as opposed to an agent is that I don’t work for an insurance carrier. I represent them—over 50 of them.

By doing so, I have the opportunity to understand my client’s needs and match him/her based on their unique health and goals rather than fitting one carrier to them whether is the best choice or not.

In this post, I will reveal the best three companies for seniors who seek term life insurance, the benefits of choosing those companies, and the rates you can expect to pay.

Let’s dive in.

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Why Term Life Insurance for Seniors?

There are many reasons seniors seek term life insurance. The primary purpose is an income replacement solution since most of them still work and have people who depend on them financially.

According to the U.S. Bureau of Labor Statistics (BLS), about 40% of people ages 55 and older were working or actively looking for work in 2014. This number, known as a labor force participation rate, is expected to grow significantly through 2024, especially for people ages 65 to 74 and 75 and older.

Here are two primary reasons seniors seek term life insurance:

  • Expired group plan: Many individuals never bought life insurance for themselves. They relied on an employer-sponsored plan to meet their need for protection. However, when they retired, they had to say goodbye to their coverage as well, or pay an excessive amount of money to keep all or part of it because the company is no longer paying for it as they are no longer a company employee.
  • Outlived an individual term plan: Many seniors bought a policy 20 or 30 years ago when they had their first home or started a family. Since life rarely goes according to one’s plan, events such as marriage, divorce, or getting a business loan may call for new coverage. Extending their current term plan is feasible, but buying a new term life insurance is more economical, notably for those in good health.

How Does Term Life for Seniors Work?

Term life insurance is also called temporary protection because it is intended to last for a specific duration, usually from 10 to 30 years. The premium payments and death benefit are guaranteed to stay the same for your entire chosen length.

At the end of the term period, you may convert it to a permanent policy before the insured’s 70th birthday (with most companies) without partaking in the exam or underwriting process, continue to pay annually until the age 95 (depending on the company), or drop the policy.

When seniors buy term life, they pay attention to these facts:

  • The maximum face value: Most insurance carriers allow individuals to purchase the maximum face amount based on earned income debts and overall need. They use an income factor table to calculate the estimated value: the younger you are, the more insurance you can buy, and the older you are, the less they allow as the need for protection diminishes. For instance, if you are over the age of 50 years old, you can expect 15–20 times your yearly income, 61–70 only 10 times, and 71–80 only 5 times.
  • The maximum term length: The older you become, the shorter the term period you can receive. After all, insurance companies are in the risk assessment business, and as your age increases, so does the risk you pose. Here are the term periods that you can expect based on your age:
    • 10-year term up to the age of 80
    • 15-year term up to the age of 75
    • 20-year term up to the age of 70
    • 30-year term up to the age of 55
  • Owning a term policy with a conversion clause allows you to convert part or all of your coverage to a permanent policy, usually, at the end of the guaranteed level premium before a particular age, depending on the company. The best part is that you are guaranteed coverage with no needed exam or underwriting process. Why should you pay attention to this fact?
    • If you bought your policy at age 60, some companies would only allow conversion up to the age of 65 while other 75. It becomes paramount to consider this option.
    • It’s not as relevant to pay attention to it if you bought your policy at age 70 or older. You don’t have a conversion period—you’ve already passed it.

Here Are What I like to See When Recommending Coverage for Seniors

Age Last Birthday Rates

Age is one of the primary factors in estimating your rates. It’s straightforward. The older you are, the more you’ll pay, and the younger, the less. This is why it’s imperative for seniors to get their current age rates rather than near age.

Let’s differentiate between these two:

  • Last birthday or actual age is your real age on any given day. Even a week before your birthday, you are still a year younger.
  • Nearest age assumes your age based on how close you are to either the last or next birthday. In other words, if you are 50 years old and seven months, you are considered 51 years old because there are only five months until the 51st birthday.

Takeaway: You’ll be surprised to know how a one-year age difference can translate into huge savings on premiums—especially for those older than 70.

Liberal Height and Weight Charts

Let’s face it. The older we become, the harder it becomes to keep the weight off. Insurance companies will charge you more for your extra weight even if you go on a starvation diet and lose weight for a whole year. Many times, insurers add your lost weight in the past year to your actual weight at the time of application.

However, being a broker gives me the extended underwriting knowledge into which companies have distinct height and weight charts for those who are 60 and over as opposed to younger individuals. In other words, they allow more lenient values to qualify for better rates.

Moreover, some companies offer unisex charts which give women even higher ranges to be eligible for favorable prices. For instance, a male over the age of 60, 6’0” 228 pounds can qualify for preferred rates. If he was under the age of 60, he had to weigh under 213 pounds to get the same price.

Underwriting Credits

A few companies use underwriting credits to offset various health issues, which generally call for increased prices by granting “credits”, consequently reducing the rates.

It’s a way for the insurance company to underwrite the person as a whole rather than his/her condition. For example, if you are overweight or have diabetes, a company may use your favorable criteria such as reasonable blood sugar control to offset debits for diabetes. This can improve your Table 3 rating to a Standard. In other cases, it can enhance your Standard health class to Preferred.

No-Exam Options

Most seniors are thrilled to discover that they don’t need to undergo an exam as part of the underwriting process. As a broker, I’m happy to offer such an advantage, provided you are comfortable paying more for it as opposed to taking the exam.

There are a few companies that provide accelerated underwriting process for those who are in their 50s without charging them extra. The accelerated option starts with a phone interview, during which the underwriter decides to either skip the exam and issue the coverage or order an exam and continue as a fully underwritten policy. Make sure to choose the accelerated underwriting option whenever possible.

3 Best Companies for Seniors Who Seek Term Life Insurance

Let’s take a look at the top three companies that best fit seniors who seek term life insurance. When I selected these companies, my main objectives were:

  • Must be competitive, price wise
  • Have high financial ratings
  • Geared for the seniors’ market by providing friendly underwriting guidelines

Lastly, if you have any medical ailment, you will not get the preferred rate, and I advise you to talk to a broker so that he/she can recommend the best company for your situation.

1. Prudential

pru logo color

One of the most recognized brands in the life insurance industry among brokers and clients, Prudential is a Fortune 500 company who was founded in 1875—144 years ago. It has an A+ (Superior) financial rating according to A.M. Best. Prudential is probably the best carrier for those with pre-existing conditions as long as it’s well controlled.

Prudential full review

Plan Highlights

  • Minimum face amount: $100,000
  • Liberal height and weight charts for those over 60
  • Underwriting credits
  • Great for those with pre-existing conditions
  • Age last birthday
  • Issue ages:
    • 10-year plan up to 75 years old
    • 15-year plan up to 70 years old
    • 20-year plan up to 65 years old
    • 30-year plan up to 55 years old
  • Conversion option: up to the age of 65 or at the end of the initial level-paying period, whichever comes first
  • Accelerated rider at no additional cost
  • Optional riders:
    • Waiver of premium
    • Accidental death benefit (AD&D)
    • Children’s term coverage

Prudential’s Monthly Rates

10-Year Level Term Male

 AGE$100,000$250,000$500,000
 50$21.79$31.07$54.69
 55$28.18$42.66$77.88
 60$37.54$65.19$122.94
 65$57.93$116.38$225.32
 70$96.60$200.38$393.32
 75$161.00$366.19$724.94
 80NANANA

10-Year Level Term Female

 AGE$100,000$250,000$500,000
 50$21.27$30.41$53.38
 55$23.80$34.35$61.25
 60$29.14$47.25$87.07
 65$39.99$73.50$139.57
 70$63.79$124.47$241.50
 75$112.27$233.85$460.25
 80NANANA

2. Transamerica

transamerica logo color

Another huge brand which was founded in 1928, Transamerica is known for investment and retirement services, and it has an A+ (Superior) rating according to A.M. Best. One of the greatest advantages Transamerica offers is the conversion period up to the age of 75 if you qualify for the best health class.

Transamerica full review

Plan Highlights

  • Minimum face amount: $25,000
  • Liberal height and weight charts for those over 71
  • Underwriting credits
  • Age last birthday
  • Issue ages:
    • 10-year plan up to 80 years old
    • 15-year plan up to 78 years old nonsmokers 73 smokers
    • 20-year plan up to 70 years old nonsmokers 65 smokers
    • 25-year plan up to 65 years old nonsmokers 60 smokers
    • 30-year plan up to 58 years old nonsmokers 53 smokers
  • Conversion option: up to the age of 70 (Standard rate) or 75 (Preferred Plus)
  • Accelerated rider at no additional cost (not available on all plans)
  • Optional riders:
    • Waiver of premium
    • Accidental death benefit (AD&D)
    • Children’s term coverage
  • Non-medical underwriting up to the age of 60
    • Up to $99,999 on Trendsetter Super
    • Up to $249,999 on Trendsetter LB (Living Benefits)
  • Standard rate only on a no-exam life policy.

Transamerica’s Monthly Rates

10-Year Level Term Male

 AGE$100,000$250,000$500,000
 50$20.21$30.96$52.46
 55$30.10$50.53$80.41
 60$42.66$77.62$131.58
 65$71.29$133.52$239.94
 70$110.77$221.24$418.82
 75$155.66$348.95$649.30
 80$388.03$777.01$1,514.46

10-Year Level Term Female

 AGE$100,000$250,000$500,000
 50$17.46$26.45$42.14
 55$25.89$40.21$65.36
 60$36.98$63.86$112.23
 65$59.94$105.78$187.05
 70$90.13$181.46$332.82
 75$142.93$285.09$515.14
 80$324.74$681.98$1,267.21

3. Banner Life

banner logo

Legal & General Group, commonly known as Legal & General, started in 1836 when six attorneys met in a London coffee shop where they discussed life insurance. Since then, Banner Life has expanded outside of the United Kingdom, holding investment operations in Asia, the Gulf, and many international markets.

In 1981, they entered into the US markets and they currently have one of the best life insurance ratings, A+ (Superior), according to A.M. Best. Banner has also excellent underwriting guidelines geared towards people with health issues.

Banner Life full review

Plan Highlights

  • Minimum face amount: $100,000
  • Issue ages:
    • 10-year plan up to 75 years old
    • 15-year plan up to 75 years old
    • 20-year plan up to 70 years old
    • 30-year plan up to 55 years old
  • Accelerated underwriting up to the age of 50
  • Underwriting credits
  • Conversion period before the age of 70
  • Accelerated death benefit at no additional cost up to 75% or $500,00 whichever is the lesser
  • Optional riders:
    • Waiver of premium
    • Additional term insurance
    • Children’s term coverage

Banner’s Monthly Rates

10-Year Level Term Male

 AGE$100,000$250,000$500,000
 50$14.39$27.50$47.73
 55$19.94$41.49$70.13
 60$31.73$66.10$118.25
 65$53.20$105.14$196.37
 70$87.54$184.04$333.25
 75$153.92$347.44$673.04
 80NANANA

10-Year Level Term Female

 AGE$100,000$250,000$500,000
 50$12.91$22.46$37.02
 55$17.43$33.75$57.62
 60$26.57$58.70$112.23
 65$42.08$96.11$187.05
 70$71.29$168.28$301.82
 75$142.93$339.10$673.04
 80NANANA

*All rates quoted on this page are for a super-preferred healthy individual who does not use tobacco. Monthly rates are updated as of Jun 2019 and are subject to underwriting approval.*

Bottom Line

Placing a client with the best life insurance company seems like an art more than a science. Asking the right questions, in the beginning, will prevent a pitfall of getting the wrong policy.

As a client, you want to ask your broker about conversion options, how age is calculated, any underwriting credits, and if a company offer an accelerated underwriting process rather than a straight-out no-exam option.

We at Effortless Insurance work with several dozen companies and promise to understand your needs first before recommending a policy. You can use the form on the right-hand side of the page to see your rates.

Working with a broker is absolutely free because we get paid by the insurance carrier, so what do you have to lose?

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