Is whole life insurance worth it for seniors? Here's what experts say (2024)

Term and whole are your two main options when purchasing life insurance.

For older adults, though, many assume term life insurance is the only choice. And while its lower price and shorter duration can sometimes be a smart fit, for some seniors, there's a case to be made for whole life insurance, too.

Are you an older adult weighing your life insurance options? We spoke to some experts to determine when whole life insurance may be worth it for seniors.

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When is whole life insurance worth it for seniors?

Whole life insurance provides coverage for the rest of your life (however long that may be) while term life only offers coverage for a short period of time, usually 10 to 20 years. For this reason, whole life insurance tends to be more expensive.

The extra costs can be worth it, though, experts say — at least for some seniors. For one, it comes with guaranteed premiums, which can ensure your loved ones have funds to cover your estate taxes and funeral expenses and can pay off any remaining debts when you pass.

"As long as you continue paying the premiums, it can provide a substantial death benefit to your beneficiaries," says Tim Hoolihan, a life insurance agent with Assurance IQ. "If you have large debts or want to leave behind a legacy for your beneficiaries, whole life insurance might be a fit."

If you want a policy that has benefits that can be put toward long-term care costs (if you enter a nursing home or other facility, for example), whole life insurance can offer that. You may also want whole life if you need a policy you can pull money from in an emergency or use to subsidize your retirement.

"They can be borrowed against to access tax-free money that does not need to be paid back until the insured passes away," says Chris Orestis, president at retirement advisory firm The Retirement Genius. "They can also pay dividends to the policy owner."

If you find yourself in a financial bind, you can even use the policy's benefits to pay your premiums, Orestis says.

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When whole life insurance probably isn't worth it

If you're in poor health or are much older, whole life insurance may not be worth it, as the premiums could be cost-prohibitive, especially if you're on a limited income.

"It comes at a higher cost than term insurance, which can be a stretch for those on a tighter budget," says Veronica Fernandez, founder of life insurance brokerage Secure Senior Benefits. "The idea for whole life insurance and any life insurance in general is to get it as young as you can and lock in those rates."

You also may not need whole life if you already have a lot of assets to your name, as these can be used to provide for your family once you're gone, says Nick Ramirez, owner of Goosehead Insurance in Huntington Beach, California. If your family is well-positioned financially, you also can likely skip whole life.

"Estimate your family's future financial needs, such as income replacement and education expenses, when considering whole life insurance," Ramirez says. "If you're single and have no financial dependents or if your children are financially independent, there may be little or no need for whole life insurance - or even life insurance more broadly."

How seniors can apply for whole life insurance now

If you're a senior looking to get whole life insurance, apply sooner rather than later. As Orestis puts it, "The younger and healthier a person is when they buy insurance, the more options they will have and the lower the premiums will be."

You should also compare quotes from several life insurance companies and consider enlisting an independent agent who can help you shop around.

Make sure you're prepared for any lab work and doctor's appointments the insurer may require, too, and if you want the best premiums, work on getting your health in top condition before applying.

"You may be able to qualify for lower rates by being as healthy as possible through exercise, eating right, and staying on top of routine healthcare," Hoolihan says. "If you use tobacco, stopping for a year or more could net you a better rate."

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