Life insurance for seniors

For seniors, life insurance costs can depend on many factors, such as the life insurance provider, the type of policy you choose and your level of cover. Generally, life insurance premiums tend to get more expensive as you age. For example, someone who lives a dangerous or unhealthy lifestyle could end up paying more for their policy than someone who is older.

The underwriting process differs between life insurance companies, so it might be a good idea to compare quotes from multiple insurers to find the best life insurance policy for you.

While there’s no simple way to answer this question, it’s always wise to consider your circumstances without forgetting about your family’s future and livelihood. If your family’s finances are in order and you’ve taken your household debt into consideration, you may only require a low level of life insurance cover, if you need it at all.

You may want to take out life insurance after retirement for a variety of reasons:

• Your family are dependent on your financial contributions to pay debts and living expenses.
• Your children require ongoing financial support due to medical needs or school/university fees.
• Your spouse or dependants would require financial assistance to cover funeral costs (in the event of your death) or legal fees.
• You want to give your family an inheritance to invest in their future.

Another component of life insurance you need to be aware of is your policy’s expiry age. These age limits vary between insurers and policies, but generally:

• Term life insurance expires at 99 years of age
• Total permanent disablement (TPD) insurance expires at 65 years of age
• Trauma insurance expires at 70 years of age.

These expiry ages are a guide only. It’s important to always read the relevant Product Disclosure Statement (PDS) to find out at what age your cover may become void or change to a different type of cover.

A term life insurance policy makes a lump sum payment to your beneficiary in the event of your death. It’s suitable for people wanting to ensure their family is provided for after their death or to cover their medical bills if diagnosed with a terminal illness. A term life insurance policy only covers you for a set period of time (e.g. 30 years or until you turn 99).

If you took out life insurance before it was discontinued in 1992, you might be on a whole life insurance policy instead, which covers you for your whole life and accrues a cash value that can often be withdrawn during your lifetime. You can no longer take out a whole life insurance policy, so keep in mind that if you’re switching insurance, you’ll be moving to a different type of cover.

TPD pays you a lump sum of money if you’re permanently disabled and are unable to return to work, which can go towards expenses like treatment and rehabilitation or to compensate for lost income. It can be taken out with your life insurance policy or as a separate policy. Some TPD insurance products will also pay out a death benefit if you die before claiming on the policy.

Also known as critical illness cover, trauma insurance pays a lump sum if you’re diagnosed with a serious medical condition. There are many medical conditions that could fit the criteria of a trauma event, including cancer, circulatory diseases and nervous system diseases. Each policy will specify exactly which conditions are covered and the level of severity that needs to be met.

Sometimes called burial insurance or final expense insurance, this type of insurance pays a lump sum that can go towards funeral expenses in the unfortunate event that you pass away. Generally, you don’t require a medical exam to take out this type of insurance, although it usually comes with a lower coverage amount.