Your guide to life insurance for over 65s

Updated 15/05/2023

Over the age of 60 and thinking about life insurance? Find out more about seniors life insurance, including cover options, average costs and more.

the Best Life Insurance For Seniors Over 65 Years Old

If you're nearing retirement, you might have questions about life insurance and how your age affects the cover available to you.

The good news is there are plenty of options for seniors life insurance meaning you and your loved ones can have peace of mind as you start to look forward to retirement.

So, what do you need to know if you're looking to get life insurance for the first time or switch to a different policy if you're in your 60s or above?

Can you get life insurance if you're over 65? Absolutely.

And in this guide, we'll show you how.

We'll walk you through how life insurance for senior citizens in Australia works, what types of seniors life insurance are available and potential ways to save on your premium.

Key Points

  • There are plenty of life insurance options for older Australians that can provide a financial safety net for you and your loved ones.

  • Most insurers offer seniors life insurance up to a certain age known as the 'maximum entry age'.

  • The cut-off age for getting a new life insurance policy usually ranges from 60 to 75, depending on the policy and the insurer.

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How does life insurance for seniors work?

Seniors life insurance can provide financial security for you and your loved ones if something unexpected occurs, such as if you pass away or become terminally ill.

As you get older and your health changes, financial protection for your loved ones naturally becomes more important to think about.

Most insurers offer life insurance up to a certain age known as the 'maximum entry age'.

This is the cut-off age for getting a new life insurance policy (including switching policies) and usually ranges from 60 to 75.

The maximum entry age depends on the type of policy and the insurer.

In addition to the maximum entry age, insurers will usually set a 'policy expiry age'.

This is the age at which your life insurance policy will automatically terminate, and is usually set at 99 years old.

For example, if you're aged 65 you could purchase a life insurance policy with a maximum entry age of 65 or above and a policy expiry age of 99, and be guaranteed cover until the age of 99.

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.

Income Protection

Income Protection

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

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Is life insurance worth it for over 65s?

Whether life insurance is worth it or not when you're older really depends on your situation.

There's no definitive answer, but it's useful to consider what would happen if you were no longer around or could no longer work.

If you've got anybody who is financially dependent on you, you're still paying off your mortgage, or you have other debts, and you think your loved ones would struggle financially without you, then you may want to consider a policy.

Everybody's needs are different and there's a lot of insurers on the market.

It's when it can be useful to speak to a comparison site, like our team at Compare Club.

They're experts in policies for over 65s, so will be able to provide you with options.

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

The short answer is it depends on your insurer and the type of life insurance.

Term life insurance often covers pre-existing conditions Some TPD, trauma and income protection policies may cover pre-existing conditions, albeit with certain exclusions.

However, some insurers may offer seniors life insurance for people with pre-existing medical conditions at a higher premium rate, or agree to pay a partial benefit for claims related to your medical condition.

If you have a pre-existing medical condition, it's a good idea to compare cover from multiple insurers to see what options are available to you.

You'll need to disclose any pre-existing conditions that you're asked about by the insurer or in the form -- there are some combinations of conditions that insurers will be very reluctant to cover and you may invalidate your insurance if you don't disclose them.

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

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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.

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.

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​​The information contained in this guide is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. As such, it is important that you consider the appropriateness of any advice and the relevant product disclosure statement (PDS) before proceeding. Check with a financial professional before making any decisions.

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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.

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Matthew Lang

General Manager of Life Insurance