Compare the Best Life Insurance For Seniors Over 65 Years Old

Life insurance offers financial security to you and your loved ones in the event of unexpected circumstances such as your passing or a terminal illness diagnosis. As you age and your health situation evolves, ensuring financial protection for your loved ones becomes increasingly important. 

Rest assured, there are plenty of choices available to provide you and your loved ones with peace of mind as you approach retirement. Whether you're looking for your first life cover policy in your retirement, or considering switching to a different one, it’s always a good idea to review available life cover options.

When it comes to seniors life insurance, there are numerous options to provide a financial safety net for you and your loved ones. Most insurance companies have a maximum entry age, which signifies the age after which you can no longer obtain a new policy. This age limit typically falls within the range of 60 to 75, depending on the policy and the insurer.

Is there life insurance for over 65s?

The maximum entry age on life insurance policies in Australia can vary between providers but generally, people can take out cover if they are over 18, and the cut off age for life insurance is 75. 

The duration of your life insurance policy can be influenced by the policy's expiration age. This refers to the age you’ll be when your policy will automatically end. Typically, this age range falls between 99-130 years. For example, if  you take out life cover with an entry age of 70 or higher, and an expiration age of 100, you’ll remain covered until you’re 100 years old.

Out of ten insurers that we work with, these are the three life insurers offering the highest maximum entry age for life cover, in conjunction with the maximum expiry age.

There are a range of coverage options for over 65 life insurance, and several ways to potentially save on your premiums.

How Does Life Insurance For Seniors Work?

Insurance companies generally have a maximum entry age for life insurance policies, typically ranging from 60 to 75 years old. Additionally, they set a policy expiry age, which signifies the age at which your policy automatically terminates. This age limit is usually set at 99 years old.

Is Life Insurance Worth It Over 65 years old?

Deciding whether life insurance is worth it for individuals over 65 depends on their specific requirements, risk tolerance and what they are looking to protect in the event if they pass away.

Expenses that your family might struggle to manage without you and/or your income can include: 

• The costs of raising dependents;

• Outstanding mortgage/s;

• Other debts;

• Ongoing lifestyle costs such as school fees and rent;

It  might be a good idea to talk to an expert specialising in life insurance.

Can I still get covered if I have a pre-existing medical condition?

Cover for any pre-existing medical conditions depends on your insurer and the type of life cover you hold with them. While term life insurance often covers pre-existing conditions, other policies such as TPD, trauma, and income protection may have certain exclusions. Some insurers offer life insurance for people with pre-existing medical conditions, but at a higher premium rate or with limitations on benefit payouts related to your medical condition. 

The key health issues for over 65 year olds in Australia include the following leading causes of death among seniors:

Types of seniors life insurance

Seniors life insurance includes several types of cover, which can be bought separately or in some cases bundled in one policy.

There are five main types of seniors life insurance in Australia:

Term life insurance

Also known as 'life cover' or 'death cover', this type of cover pays out a beneficiary, such as your partner, a lump sum if you pass away or are diagnosed with a terminal illness.

Maximum entry age: Up to 75 years, depending on the insurer

Total and permanent disability (TPD) cover

TPD cover pays a lump sum if you can't work again due to permanent illness, injury or disability.

The definition of permanent disablement depends on the insurer, so it's important to check the product disclosure statement (PDS) to find out when a benefit will be paid.

Maximum entry age: Ranges from 60-75 years, although many insurers have their cut-off point in the 60s.

Trauma insurance

Also known as 'critical illness cover', trauma insurance pays a lump sum if you're diagnosed with a specific illness or injury, such as cancer.

Maximum entry age: Usually 65 years.

Income protection insurance

Assuming you haven't retired, this type of cover pays up to 70% of your typical income, usually monthly, if you can't work temporarily as a result of injury or illness. Income protection insurance doesn't cover redundancy.

Maximum entry age: Usually 60, but some insurers do offer cover for older Australians.

Funeral insurance

This type of cover pays a beneficiary, such as your partner, a lump sum to pay for funeral expenses when you pass away.

In many cases, funeral benefits are an additional benefit that comes with term life insurance.

This can provide better value than straight funeral insurance and it's not unheard of for people to pay more for their funeral cover than their family ends up spending on the funeral.

For example, if you have a term life insurance policy for $100,000 including funeral cover, anywhere from $15,000 -- $20,000 can be immediately paid to your beneficiary as an advancement to cover funeral costs if you pass away.

The whole life insurance policy (and the remaining payment) may then take a few additional weeks to process.

Maximum entry age: 75+ years

How much does seniors' life insurance cost?

The cost will vary for everyone depending on your age, employment, medical history and whether or not you're a smoker.

To help you get an idea of how much it will cost you, below is a table of the average cost of a $500,000 term cover policy by age group for a man and woman in NSW in an office job with no pre-existing medical conditions.

This data was obtained on 31 July 2020.

The table is only indicative, so your quotes may be less or more depending on your personal circumstances.

Below is an indicative table of the average cost of a term cover policy

How much does life insurance for senior cost?

*(based on $500k term cover, non-smoker, office job in NSW)

What factors impact the cost of seniors life insurance?

As with any insurance, several factors can impact the cost of seniors life insurance, including but not limited to:

• Your age -- Typically the older you are, the higher your premiums will be.

• Your gender -- Premiums for older men are usually higher because men statistically have a lower life expectancy.

• Whether or not you smoke -- If you're a smoker, your premiums will be higher.

• Your medical history -- If you have pre-existing health conditions, your premiums may be higher.

• Your family medical history -- Your premiums may be higher if your immediate family members have a history of major illness such as heart disease.

What affects the cost of senior life insurance?

Understanding stepped premiums for seniors life insurance

There are two main structures for life insurance premiums -- stepped and level premiums

Stepped premiums are linked to age. Your insurer reevaluates your level of risk of illness, injury or death every year, and adjusts your premium accordingly.

In other words, you'll usually pay a lower premium when you're young, and wind up paying more as you get older.

Level premiums are not linked to age so any increase in your premiums will be due to other factors.

The starting premium for these types of policies tends to be higher but they can work out as better value over a long period of time..

The majority of seniors life insurance policies come with stepped premiums. This means your premium may increase with each year you're covered.

It's important to consider stepped premiums when comparing your options, as the cheapest policy may end up costing you more in the long run if the yearly increases are significant.

The product disclosure statement (PDS) for a seniors life insurance policy should outline how premiums may change over time. These will differ from insurer to insurer.

Ways to save on the cost of seniors life insurance

Finding the best life insurance for seniors doesn't always mean going with the cheapest option -- but there are a few things you can do to save on premiums and find the right cover for your needs:

• Bundle your insurance: If you're thinking about buying more than one type of insurance, you can often save by bundling cover in one policy. For example, it's usually cheaper long-term to include funeral benefits with term life insurance rather than buying funeral insurance on its own.

• Don't just stick with insurance through your super: Having cover through your super doesn't guarantee the cheapest premiums, it's not medically underwritten, and your policy may cut off at a certain age. You may be able to get a cheaper deal for a longer period with cover from a retail life insurer.

• Compare quotes from multiple insurers: Like any purchase, it's a good idea to shop around before making a decision. Everybody's situation is different, and comparing your options can help you find the best life insurance rates for seniors along with a policy that suits your circumstances.

Hopefully you'll still have the best years of your life in front of you, but it's always good to have peace of mind that if the worst happens, your loved ones won't have to worry about their finances.

If you're in your 60s or 70s and think you could still benefit from a life insurance policy, you can get started by clicking the button below or calling 1300 904 624 and speaking to one of our experts.

Frequently Asked Questions:

What types of life insurance are over 65s eligible for?

• Term life cover.

• Trauma insurance.

• TPD cover.

• Funeral insurance.

What does ‘term life insurance’ mean?

Term life insurance is also called 'death cover', and is really what most people think about when they hear ‘life insurance’. It’s the lump sum payment made to your family when you die. Term life cover insures you for a period of time (e.g. with some insurers up to 130 years of age) and will pay a lump sum benefit to your beneficiary who you nominate if you die before the policy expires or you decide to terminate it.

What is a ‘buy-back’ option?

This refers specifically to trauma cover. If your trauma cover is linked to a larger life cover plan, and your benefit is paid for a trauma event, your total life cover sum insured is reduced by what was paid for the trauma benefit. Example: you’re injured in an accident and receive a $50,000 benefit from your $500,000 life cover plan. Your payout to your family when you pass will be $450,000 but you can repurchase an extra $50,000 of cover 12 months after receiving your trauma claim.

Sources:

Apra

KPMG

FSC

Met Life

Matthew Lang is the general manager of life insurance at Compare Club. Matthew leads a team of dedicated professionals who are passionate about helping individuals and families make informed decisions about their life insurance needs. Whether it's finding the right coverage for your specific circumstances, comparing policies, or optimizing your existing policy, Matthew and his team are here to provide expert guidance and support.

Meet our life insurance expert, Matthew Lang

Matthew's top life insurance tips

• 1

  Identify what you want out of life insurance before you buy. Knowing the purpose of your life cover will help you choose a policy that meets your needs.

• 2

  It's easy to assume that the sole purpose of life cover is to leave money behind for your family, but there's more to it than that.

• 3

  Life insurers like those on our panel pay an average of 97% of claims in full.

• 4

  There are different types of life insurance, including term life insurance, income protection, trauma cover and total and permanent disability cover.