How much life insurance should seniors have?

Life insurance is often considered a valuable form of financial protection. In return for a minimal fee to a provider each month, the insured can secure a financial safety net for their loved ones in the event of their death. Depending on the policy type they may even be able to access a cash portion of their account while alive.

While the benefits of life insurance are clear, the questions surrounding how much one should have can be confusing. This consideration is compounded for seniors, who generally find themselves paying more money for less coverage.

Still, while there is no magic number to determine how much life insurance a senior should have (everyone's personal circumstances are different), there are some reliable guidelines older Americans can use to help them settle on a figure.

If you're in the market for life insurance then start by getting a free price estimate so you know exactly what to expect. 

How much life insurance should seniors have?

How much life insurance seniors should have is specific to their own individual circumstances and standard of living. There are a series of questions they will need to answer to help drill down to a specific number:

What can you afford?

Before even thinking about how much you want (and why) it's crucial to know your own budget. What you can afford will go a long way to determining an exact figure. Most life insurance policies for older Americans are limited - and costs tend to be significantly higher than they are for younger people.

For a 64-year-old male living in New York, Haven Life will provide a 10-year term life insurance policy in the amount of $150,000 for $98.74 per month. This is a quote for a non-smoking male considered to be in good health. 

For a 64-year-old female living in New York, Haven Life will provide a 10-year term life insurance policy in the amount of $150,000 for $70.11 per month. This is a quote for a non-smoking female considered to be in good health.

Are those coverage amounts too much? Too little? Only you can know that answer. But you can help get a more accurate estimate by getting a free price quote online now. 

How much do you want?

Once you know your budget and what you can afford, try to back into a coverage amount that can help you meet your goals. Just note that coverage amounts for seniors are often not commensurate with the hundreds of thousands of dollars or $1 million policies that younger people can typically obtain. 

As seen in the above example, a $150,000 policy can potentially be secured by senior women and men alike for less than $100 per month. But if any of the factors in the above estimate change (age, sex, location, smoking, health, etc.) that number will likely change too.

In short: know what you want but be aware that you may not be able to get a policy in that amount - or the charge for doing so could be so exorbitant that it's not worth buying.

What are your goals?

Senior life insurance can help cover a wide variety of items. 

Life insurance, for example, can be used to cover end-of-life expenses, thus freeing your loved ones from having to pay for things like funeral and burial services.

A policy can also help reduce outstanding debt that you would otherwise pass on to your beneficiaries. And it can pay estate taxes on an inheritance you leave. Or it can simply serve as a nest egg for loved ones in the absence of any savings or home equity.

Each of these items, however, has different costs. So, if you want your policy to cover a wake, coffin and burial service, a policy in the amount of $20,000 may be more than sufficient (and relatively easy to obtain). If you want a policy that will pay off a substantial mortgage balance, however, then you may have more difficulty.

Know why you want the policy and then you'll be able to better determine how much you need.

Compare life insurance providers here or by using the table below.

The bottom line

Life insurance for seniors can be both beneficial and cost-effective, assuming the policy amount is a reasonable one. But if you know your budget, how much you want and what you want to accomplish you can very likely secure a cost-effective and valuable plan.

Start by getting a price estimate online now.