Your Guide to Finding Cheap Life Insurance for Seniors

Senior citizens living in Australia often want term life insurance that offers guaranteed acceptance and affordable premiums to help them leave a legacy or cover outstanding debt.

More and more Australians are reaching retirement age with a certain level of debt and need life insurance to help them maintain their current lifestyle and cover once-off unexpected expenses, like home repairs and medical treatments. People are also remarrying and having kids later in life.

The financial pressures of having to support your children, combined with the rising prices of energy and other basic costs are adding to people over the age of 60 still searching for and needing cheap life insurance, preferably with no medical exam.

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The importance of life insurance for over 50s

People are living longer and staying healthier, which is why people over 50 generally still maintain or purchase life insurance.

Life insurance for seniors over 50 might make sense if you have a fair amount of debt that you don’t want to burden your loved ones with.

When does life insurance for senior citizens no longer make sense?

Generally, life cover will not make sense when all of the following applies:

  • Your funeral expenses are already covered, and
  • You have sufficient savings set aside for retirement, and
  • You have no outstanding financial commitments, and Your children are no longer financially dependent on you, or
  • You have adequate savings/assets to cover all of the above appropriately

Best life insurance for senior citizens

When you become a senior, your needs change. You’ve moved through your highest income-producing years and might require some form of income replacement to protect your income as you approach retirement.

If you still wish to maintain some level of protection against living expenses, accidents and illness you might want to look at what’s available. Always start with your needs first and then consider the cost.

What types of life insurance are available to seniors?

number-1Life Cover

Term life insurance for seniors may be the most affordable way to protect your loved ones as you approach retirement. This type of policy generally pays a death benefit if you pass away or get diagnosed with a terminal illness. You may only require a low level of cover if you have already paid off your debts and have little financial obligations.

number-2Funeral Insurance

No medical exam is needed for funeral insurance and will generally provide up to $15,000 worth of cover, which pays out as a lump sum to help your beneficiaries pay for your final expenses.

number-3Modified TPD

This type of insurance pays out a lump sum benefit if, due to an accident or sickness, you are continuously and permanently disabled and unable to perform at least two of the below activities without assistance:

  • Bathing and/or showering
  • Dressing and undressing
  • Eating and drinking
  • Using a toilet
  • The ability to get in and out of bed or a wheelchair
  • Moving by walking, wheelchair or walking aid

number-4Living Expenses Cover

Provides a monthly benefit if you should become significantly disabled, due to an accident or sickness, and remain so during and after the waiting period. Significantly disabled is usually defined as your inability to perform at least two basic tasks, for example, using a toilet and dressing yourself.

The average cost of life insurance for seniors over 60

Company Life Insurance Policy Cover Amount Monthly Premium
Priority Protection Vitality $100,000 $69.58
$150,000 $104.38
$250,000 $156.56
Accelerated Protection – Health Sense $100,000 $78.43
$150,000 $117.65
$250,000 $184.31
Insurance with On Track $100,000 $78.48
$150,000 $117.72
$250,000 $181.49
Life Solutions $100,000 $78.54
$150,000 $117.81
$250,000 $186.53
OneCare $100,000 $80.21
$150,000 $116.37
$250,000 $176.91
Above pricing, tables are based on a stepped-premium style life insurance policy for a 60-year-old non-smoking male living in NSW (May 2018).

Where to find life insurance if you’re over 65?

If you’re over the age of 65, you might want to apply for a retail life insurance policy from an insurance broker or comparative website. Policies held in superannuation generally end at age 55 or 70, while retail life insurance policies only expire at age 99 or 100, depending on the insurer. Australians over the age of 65 might also want to consider reducing their life cover, to keep premiums affordable.

Most income protection insurance policies expire at age 65 or 70, depending on the insurer, and TPD and Trauma insurance might be costly at this age due to the high probability of claiming. Therefore, some people consider Living Expense Cover, which pays a monthly benefit if you become significantly disabled due to illness or an accident.

Preparing for the future at age 65

When you’re over 65, your personal and professional goals and financial needs change. You need to actively prepare for the next half a century of your life by:

  • Paying off your debts
  • Saving for retirement
  • Ensuring you have sufficient income to support you during your golden years
  • Consider lowering your life insurance cover as your kids are now more likely to be financially independent and your mortgage will soon be paid off

You can increase your retirement savings by adding to you Super. You can do this several ways:

  • Entering into a salary sacrifice agreement with your employer.
  • Making personal contributions to your super fund.
  • Transferring super from foreign super funds.
  • You may be eligible for government co-contributions or a spouse contribution tax offset.

Remember, the more you generally put in while you are still working the more you will have at retirement.

Life insurance quotes for seniors over 70

Company Life Insurance Policy Cover Amount Monthly Premium
Priority Protection Vitality $100,000 $266.19
$150,000 $399.29
$250,000 $598.86
Accelerated Protection – Health Sense $100,000 $293.03
$150,000 $439.55
$250,000 $688.62
Complete – Healthy Life Option $100,000 $286.11
$150,000 $425.20
$250,000 $647.74
Life Solutions $100,000 $280.26
$150,000 $420.39
$250,000 $665.63
OneCare $100,000 $270.29
$150,000 $401.50
$250,000 $621.12
Above pricing, tables are based on a stepped-premium style life insurance policy for a 70-year-old non-smoking male living in NSW (May 2018).

Is Life Insurance for over 70-year olds still affordable?

Life cover at age 70 might be very expensive. When you’re a few years into your retirement, all or most of your debts have usually been paid off. So, you’ll generally only require a low level of life insurance or funeral cover. If you have TPD and Trauma insurance generally the definitions will now have changed to Modified TPD Cover or your cover may have expired.

However, it’s challenging to claim on modified TPD at this age; therefore many individuals cease this cover when turning 70.

When will your life insurance expire?

This may vary between insurers and the type of cover you have, but generally, insurance is available to Australian citizens between the ages of 50 and 75, with an expiry age of 100. However, if your policy is held in a superfund cover could expire much sooner, between the ages 50 and 70 years.

How to potentially reduce the cost of your premiums

If you want to keep your current life insurance policy, but it has become too expensive to maintain, you could:

Comparing life insurance plans for senior citizens can help reduce costs

number-1Shop around

Life insurance companies differ in the way they price policies for different age groups. Take advantage of the competition by requesting lots of quotes.

number-2Compare premiums

Once you have a few quotes, start comparing their pricing, as well as the policy features and benefits.

number-3Don’t buy too much

If you’re over 50 consider your needs, you probably need less insurance today than you did a few years back. Make sure you know how much coverage you really need. Speak with a specialist; they’ll help you understand what options are available.

number-4Apply for cover

To apply for cover you will need to go through the application process, also known as underwriting. This process involves answering health-related questions and may require a nurse to do a physical exam. If you manage your health with regular exercise and balanced meals, this process should be no problem.

Request a life insurance quote by filling in your details in the quote form above or alternatively call us on 1300 135 205.

Published: June 1, 2018
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