Looking for affordable senior life insurance policies or to review your existing cover for a better option?
Senior life insurance is an important consideration for those entering or in their retirement years. Your financial obligations may have changed since the earlier stages of your life but there are still key reasons to have cover in place to avoid passing on any financial burden to those you love most. Life cover can offer a financial safety net to ensure that in the event of your death cover will be in place to take care of any final expenses or debt you may have remaining.
- Trauma and TPD Insurance can also be worth considering at this age to ensure that in the event of serious illness or injury, you, your partner or family are not put under great financial stress to manage the medical expenses
- Cover can generally be taken out until age 80 with cover remaining in place until age 100
- It could be worth reviewing your current policy with a consultant to switch to something more suitable ... doing so could literally save you hundreds each year
This guide will discuss the different types of insurance worth considering for seniors and offer guidance on how to compare different policies available.
Receive a quote from these direct insurers
- Life cover. Life insurance for seniors comes in the form of term life insurance. Your nominated beneficiaries will receive a lump sum payment upon your death if you die within the policy term. This means that you can leave your loved ones financially secure when you are no longer around to provide for them or take care of them.
- TPD cover. Provides a lump sum benefit for permanent or partial disablement. Definition of disablement may vary between insurers so it is important to determine when a benefit will be paid. The benefit may be used to cover everyday living expenses and costs associated with rehabilitation. This cover can be purchased as standalone cover or bundled with the life cover policy.
- Trauma insurance. Provides a lump sum benefit if the insured suffers a medical condition specified in their policy. May be especially useful for those entering their later years that are more susceptible medical events occurring. This cover can be purchased as standalone cover or bundled with the life cover policy.
- Funeral insurance. While the benefits of a life insurance policy can be used for various purposes other than paying for the funeral expenses, the payout from funeral insurance is usually used for covering the costs associated with a funeral. Most policies will allow applicants to take out between $1,000 and $30,000 in cover.
- Income protection. With an expiry age of 65, income cover will only be relevant for applicants of this age bracket. Income protection insurance provides a lump sum benefit of up to 75% of the insured's income with some policies offering up to 85% if the additional portion is contributed towards a superannuation fund.
The maximum age that seniors can apply for cover will really depend on the type of policy that they decide to go with. This may vary between providers but generally the following rules apply.
- Life Insurance. Maximum entry age of 75 with an expiry age of 100.
- Income Protection. Maximum entry age of 60 with an expiry age of 65.
- Trauma Insurance. Maximum entry age of 64 with an expiry age of 70.
- TPD Insurance. Maximum entry age of 64 with an expiry age of 70.
- Funeral Insurance. Maximum entry age of 80 years.
Compare the maximum entry ages of entry and expiry age.
|Brands||Maximum entry age||Expiry age||Difference|
The cost of life insurance will get more costly as you enter your later years.
|Age||Monthly premium for males||Monthly premium for females|
'Monthly premium' based on the average of monthly policy premiums available through finder.com.au's quote engine. Premiums are subject to change.
View full list of premiums for 50 year olds
|Policy||Monthly premium||Policy||Monthly premium|
|MLC Insurance||$214.16||MLC Insurance||$58.27|
|Zurich Wealth Protection||$221.61||Zurich Wealth Protection||$66.35|
|AIA Priority Protection||$223.02||AIA Priority Protection||$67.36|
|TAL Accelerated Protection||$226.50||Clearview LifeSolutions||$67.83|
|AMP Elevate||$226.66||TAL Accelerated Protection||$68.46|
|CommInsure Protection||$228.77||CommInsure Protection||$68.83|
|Clearview LifeSolutions||$230.50||AMP Elevate||$69.00|
|Asteron Life Complete||$232.52||Asteron Life Complete||$69.64|
|OnePath OneCare||$242.88||BT Protection Plans||$72.36|
|BT Protection Plans||$243.67||Zurich FutureWise||$73.06|
|AMP FlexibleLifetime Protection||$257.67||AMP FlexibleLifetime Protection||$77.11|
|Zurich FutureWise||$267.52||OnePath OneCare||$77.23|
View full list of premiums for 65 year olds
|Policy||Monthly premium||Policy||Monthly premium|
|MLC Insurance||$620.40||MLC Insurance||$368.47|
|Zurich Futurewise||$625.29||Zurich Futurewise||$379.02|
|CommInsure Protection||$639.25||CommInsure Protection||$379.95|
|AIA Priority Protection||$644.30||AIA Priority Protection||$423.95|
|ClearView LifeSolutions||$650.02||ClearView LifeSolutions||$386.82|
|TAL Accelerated Protection||$655.96||TAL Accelerated Protection||$431.32|
|Zurich Wealth Protection||$679.23||Zurich Wealth Protection||$406.03|
|AMP Flexible Lifetime Protection||$686.79||AMP Flexible Lifetime Protection||$426.04|
|BT Protection Plans||$686.87||BT Protection Plans||$418.09|
|Asteron Life Complete||$687.58||Asteron Life Complete||$469.51|
|AMP Elevate||$696.97||AMP Elevate||$492.33|
|OnePath OneCare||$724.53||OnePath OneCare||$451.41|
View full list of premiums for 70 year olds
|Monthly premium||Monthly premium||Policy||Monthly premium|
|Zurich FutureWise||$1,139.62||Clearview LifeSolutions||$631.76|
|ClearView LifeSolutions||$1,186.56||Zurich FutureWise||$668.47|
|AIA Priority Protection||$1,224.26||AMP Flexible Lifetime Protection||$722.20|
|TAL Accelerated Protection||$1,242.48||TAL Accelerated Protection||$741.88|
|AMP Flexible Lifetime Protection||$1,252.03||AIA Priority Protection||$768.69|
|Asteron Life Complete||$1,316.78||OnePath OneCare||$828.77|
|OnePath OneCare||$1,332.62||Asteron Life Complete||$858.83|
What factors influence the cost of a premium?
Life insurance premiums are calculated based on different risk factors a person is exposed to. An insurer will use the criteria below to determine the premium payable.
- Age. With most types of insurance, the older you are, the higher your premiums will be. When you apply for cover in your senior years, you can expect the premiums you pay will be more expensive compared to people that apply for cover when they are young. This is due to age related health risks.
- Gender. Men typically pay more in premiums than women because statistics have shown men have a lower life expectancy.
- Smoking status. If you are a smoker you will usually pay two to three times more in premiums than a non smoker. To be assessed as a non smoker for insurance purposes you will have to have stopped smoking for 12 months.
- Medical history. A standard risk means you are in generally good health, and can qualify for a lower premium, even if you have minor health issues such as high blood pressure or high cholesterol. However, if you have a number of pre-existing health conditions, your premiums may be higher.
- Family medical history. Your insurer may ask details of any medical conditions of your immediate family members. This may include heart disease, cancers, diabetes, mental disorders etc
- Pastimes. Insurers may ask if you are involved in any hobbies or pastimes that may increase the likelihood of a claim.
- Occupation. If still employed, the nature of your occupation may also lead to an increase in premiums if your insurer deems it to be higher risk.
Life insurance gets more expensive the older you get. However, some key steps to find affordable cover include:
- Take the time to research what cover is actually suitable for your needs
- Determine an adequate level of cover based on your existing financial obligations
- Take steps to improve your health. Giving up smoking may lead to a reduction in premiums in the future
- Consider funding cover through your superannuation. If you already have life cover in existing super funds, consider consolidating funds to avoid paying multiple fees
- Look out for special offers and discounts offered by the insurer to cut your premium
- Consider how your premium is structure and paid to reduce the overall amount
- Receive assistance from an insurance consultant to help you find and compare different policy options
While many life insurers won't cover pre-existing medical conditions (especially for seniors) there are some exceptions. These are the common ways insurers may treat your condition:
- Provide you with cover but exclude the pre-existing medical condition
- Provide you with cover with restrictions on the condition e.g. a partial benefit
- Provide you with cover for an additional premium
The benefit payment from a seniors life insurance benefit may be used for a number of remaining expenses. This may include:
- Any outstanding mortgage and smaller personal debts e.g. credit card debt
- Funeral costs
- Financial planning benefit to be used by your partner
- Legal fees
- On-going living costs of your family
- Creation of instant estate
- Deliver a legacy to pass on to family members or charity
What costs can trauma and TPD benefits cover?
- Modifications to your home. As you get older or you suffer an illness or injury, you may need to install ramps or safety features to aid your mobility, and these modifications and additions can be costly work, carried out by qualified tradespeople.
- In home assistance. You may also need to cover the costs to have someone visit you regularly in your home for health and personal reasons, or you may need to employ someone full time.
- Ongoing medical needs. Even if you suffer an illness or injury, there are often ongoing costs associated with these treatments which can be costly.
- Nursing home. If you are unable to stay in your home, you may need to move to a nursing home which often requires a buy-in amount, and ongoing expenses.
Some key features to consider when looking at seniors life insurance plans include:
- Premium freeze. Insured may select to pay the same premium that was paid the previous year by reducing the sum-insured before the policy anniversary date.
- Benefit indexation. The sum insured on your policy will automatically increase each year by the consumer price index or 5% to ensure your cover keeps pace with inflation.
- Guaranteed future insurability. Enables you to increase the level of cover on your policy without undertaking another round of medical underwriting
- Interim cover. Will provide complimentary interim life cover while application is being assessed by insurer.
- Funeral advancement benefit. Will make an advance payment (usually to a maximum of about $20,000) to your nominated beneficiary to assist with funeral expenses.
- Financial planning benefit. Will provide an advance payment to cover any legal or estate planning costs.
Taking out life cover can see like just another thing to organise, when all you want to do is relax and enjoy planning your retirement. However, there are some important benefits and limitations you should consider when looking at seniors life insurance:
This might be the prime of your life, with a lot of professional and life experience under your belt than you had before. A lot of people start looking towards retirement in their 50s, but it’s important to remember that there’s a good chance you’re still only halfway through a long and full life. This might be the right time to really focus on powering towards your savings and retirement goals, as the more you can put away now, the more you’ll have later. The right life insurance can help keep you on target even if things go wrong.
Consider cover that can:
- Pay off your debts for your family if you pass away
- Help with your partner's ongoing expenses
- Deliver income protection so you can stay on track for savings goals even if you temporarily can’t work
When you’re over 65 you’re officially a senior. You’re older, probably wiser and are most likely feeling the physical aches and pains that come with age by now. Unfortunately, these growing health issues will likely start taking up increasing amounts of your time, attention and money. It’s time to start considering how to actively use superannuation and life insurance as you move away from a constant income and towards savings.
Important changes to lifestyle and your cover:
- Your need for income protection. If you’re not working anymore, you don’t need to keep paying for income protection
- Income protection expiry. Many income protection policies will expire at age 65 or 70.
- Increased premiums. At age 65+, your insurance premiums may start climbing rapidly. You may want to consider the costs and benefits e.g. do you still need life insurance or have you accumulated
By now you’re either feeling the weight of years and your health is an increasing concern. By now you may want to consider estate planning in more detail, and how you plan on passing on your belongings with minimal tax impacts. Many life and related insurance policies will be expiring when you’re in your 70s. If you have been depending on benefits from these, or are expecting to rely on claims in the future then it’s wise assess your existing cover and options.
Re-assess your existing cover and options
- Estate planning. Think about looking into estate planning (and how to avoid losing too much of it to tax)
- Check the expiry age of your cover. Your life, trauma and income protection policies may have expired, or will be expiring
- Your TPD insurance policy might convert to modified TPD. This typically happens when you officially retire, and has a big impact on your level of cover.
Funeral insurance can be a good choice if you're unable to apply for life insurance. Some key tips to follow when applying for funeral insurance include:
- Obtain quotes from multiple providers. Don't get ripped off. Compare a number of quotes to ensure you're getting the best deal.
- Choose a policy backed by a reliable name. Make sure you do your research into the company's before you buy your policy. Look for details such as the company's history, awards, customer service and claims process.
- Compare features and benefits of the policy. It's essential to find out what events are covered. Read the product disclosure statement (PDS) to help you decide whether the life insurance plan is suitable for you or not.
- Look for premium guarantees. Premium guarantees ensure you don't get ripped off by making sure your premiums are capped when they reach the total sum you have insured.
- Premium payment options. Find out whether your policy includes flexible repayment options.
With guaranteed acceptance usually offered to those under the age of 80, funeral insurance can be a more suitable option for those looking for those that have been unsuccessful in taking out life cover in the past and don't require a significant amount of cover. Most funeral insurance policies allow applicants to take out between $1,000 and $30,000 in cover.
As mentioned above one of the best things about funeral insurance for the older buyers is that you won't be refused cover even up to age 80, no matter what your health, lifestyle or gender and you can take out a joint cover with your spouse if you wish. Some insurers offer seniors two choices, an age based premium option or a fixed premium option:
- The age based option is cost effective earlier on but as you age the premium cost automatically increases. The cost can become quite substantial as you get older but as you're committed you have to persevere, or otherwise find some other way of paying your own funeral costs, which many older people can't manage. Age based premiums are automatically increased by 5% each year to keep pace with the rise in funeral expenses.
- The fixed premium option is fixed at the time of taking out the cover and it will always remain the same. It's dearer than the age based option initially but if you live on to a ripe old age it becomes cheaper in comparison to the age based option at that time.
Tips to help you avoid life insurance scams
- Make sure you use a reputable provider. In this day and age, it has become increasingly important to use a reputable company, with the existence of fly-by-night companies and scam artists. A well known, regulated insurance provider cannot take the risk of deceiving its valuable customers, so you will have far greater security when you choose a company that is well known, reputable and regulated.
- Do your research. Research counts for a lot when you are doing something as important as choosing a life insurance provider and plan. You should therefore take the time to research any provider or plan you are considering, which means looking at customer reviews, finding out more about the provider if you are not familiar with it, and even comparing different plans and providers so you can boost your chances of getting a good deal from a reputable provider
- Ask questions. Since you will be paying for the privilege of having life insurance cover, you should not be afraid to ask questions for clarification and peace of mind. If you have any questions or are uncertain about anything, make a list of questions to ask the provider, from queries that you have about the plan itself to questions about the provider, its background, its policies, and anything else you want clarification about
- Don't rush into anything. Many seniors make the mistake of rushing into a decision or feeling pressured into making a decision when it comes to life insurance cover. However, this can increase the chances of you making a costly mistake. Take some time to think about your choice before you make any commitment and if necessary seek advice from professionals or even family members so that they can look over the plan and provider you are considering for additional peace of mind.
Q. Should I take out seniors life insurance even though I’m healthy?
- Even if you’re healthy you’re not immune to accidents, and no one knows what the future has in store. Therefore, it is best to take out life insurance as early as possible, when you are less of a risk to the insurer, and your premiums will be lower.
Q. What is included?
- Depending on your insurer, you can have extras such as accidental serious injury insurance, and total and permanent disability insurance, so you don’t have to die to receive a benefit payout.
Q. Who can apply?
- Generally any Australian resident who is aged between 50 and 79 can apply for a policy. In most cases you won’t need to have a blood test or a medical exam. Then, as long as you continue to pay your premiums on time, you are guaranteed to have your cover renewed each year.
Q. Am I covered everywhere?
- As seniors are more active than ever before, the chances are good that you’ll be doing some travelling in your retirement. Therefore, you will generally be covered no matter where you are in the world, as long as you remain an Australian citizen.
Q. Can I cover my family too?
- Most seniors policies will also allow you to add your partner and your children to the policy. In most cases you can cover as many dependents as you like, up until they turn 21.
Q. What will the premiums cost?
- A. Most policies will have fixed premiums, so you won’t have to pay any more as you get older. Plus, there is likely to even be a premium waiver feature, where you don’t have to pay any more premiums once you turn 90.