Term life insurance for seniors

As we age, our insurance needs often change. For some seniors and retirees, term life insurance can be a valuable financial tool to help protect loved ones and provide peace of mind.

How term life insurance can benefit seniors

Term life insurance provides coverage for a specific period (e.g. 10 years, 20 years, 25 years, 30 years etc.). If the insured person dies during that period, their beneficiaries receive a death benefit.  Anyone up to age 80 can apply for a term life policy, but it’s important to note that all term policies expire at age 85. As an example, an 80-year-old applying for term life insurance would qualify only for a 5-year term policy.

While term life insurance is not typically the go-to option for seniors and retirees, there are certain situations where it can provide valuable benefits. Here’s how term life insurance might be a practical solution for adults, age 60+, with specific financial needs.

Seniors with temporary financial obligations (e.g. mortgage, debt protection)

Term life insurance can be suitable for seniors when there's a temporary financial need, such as a mortgage or other debts that you’re expecting to pay off before age 85.

As an example, let’s say a 65-year-old retiree still has a decade left on their mortgage. They take out a 10-year term life insurance policy for the amount of their remaining mortgage balance. If they die during those 10 years, the life insurance payout would cover the outstanding mortgage, saving their spouse, children or heirs from having to take on that debt or potentially lose the home. It would also eliminate the need to use the deceased person’s other assets (their estate) from having to pay off that debt.

For seniors who still have outstanding home loans and debts, a term policy can provide peace of mind, ensuring that their estate and loved ones won't be burdened with payments in the event of their death.

What seniors need to consider before applying for term life insurance

Seniors considering term life insurance need to know that the policy provides coverage only for a specified term or for no longer than age 85. If the insured person outlives this period, the policy will end without paying a death benefit. However, if the cost of permanent insurance is out of reach, term coverage offers a way to help address an insurance need, at least for the length of the term.

Is term life insurance worth it for seniors?

While term life insurance may not be the ideal solution for all seniors, it can provide necessary coverage for a limited time. This approach lets seniors secure higher coverage amounts than they might otherwise be able to afford with permanent life insurance.

What is the oldest age you can get term life insurance?

At Sun Life, you’re able to apply for term insurance until age 80. Keep in mind, if you get a term policy, you can continue to renew it only until you turn age 85, since your policy will expire at that age.

It's important to note that term life insurance – while less expensive than permanent insurance – does become pricier and harder to qualify for as people age. Seniors need to carefully consider their specific financial situation and goals to determine if term life insurance is truly necessary or if other insurance products could be more suitable.