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Life Insurance

Life Insurance for Seniors?

07 Mar 2022

Life Insurance by Life Stage

The choices you make today can impact your long-term health, wealth and happiness. Understand the important role Life Insurance can play in key life events.

As retirement approaches you may wonder if you need life insurance. In an ideal world you would have an empty nest, self-sufficient children, paid-off mortgage, and retirement adventures planned. But life is rarely that straightforward. It is increasingly common that retirees have adult dependants at home and mortgages and debts yet to be cleared. Retirement looks very different in the 21st century as we work and live longer.

Therefore, life insurance for seniors can be just as important as life insurance in your earlier years. For example, life cover can help by providing a lump sum to assist your nominated beneficiaries (such as your dependents) with unpaid debts which might be connected to your assets. And thinking ahead to your twilight years and eventual death, life insurance cover can help avoid financial stress for your family when faced with your funeral or estate costs.

As well as life insurance cover, perhaps consider other life insurance products as well. With life cover, if you pass away or are diagnosed with a terminal illness, you or your beneficiary will receive a lump-sum payout. Other Life Insurance products can help cover costs associated with age-related illnesses and injuries, such as dementia, stroke, or Parkinson’s Disease[1] (trauma cover), or cover you if you suffer from total and permanent disability (TPD cover). It is important to note, this depends on product eligibility as there are minimum and maximum ages, and what you can afford as premiums for life insurance products generally increase with age.

Statistics in Australia about seniors insurance

To understand about insurance for seniors it is useful to learn about the levels of insurance protection in Australia’s older population.

In NobleOak’s recent customer survey about Life Insurance , it was revealed that many older Australians may be overlooking their insurance needs. The survey showed only 53% of older Australians, aged 55–60, are likely to have Life Insurance or Death Benefits cover. This was compared to 72% of those aged 30–34, and 68% of those aged 35–44.

The survey also revealed that the Baby Boomers Generation are least likely to have Total and Permanent Disability Insurance (TPD) with only 37% of 55–60 year old’s covered, compared to 47% of those aged 30–34, and 53% of those aged 35–44.

5 reasons why seniors may need life insurance

You may want to acquire life insurance upon retirement for a variety of key reasons. Check eligibility ages before you apply.

1. Your death expenses

Death is expensive. Funerals can cost anywhere from $4,000 to $15,000 for example. If you haven’t pre-planned for that cost your family will need to pay for it. Estate fees are also expensive as there may be legal fees and inheritance tax that your loved ones also need to cover. A  life insurance policy can provide a lump sum to help your loved ones settle these final expenses.

2. Outstanding debts.

Even though you are about to retire you may still have a mortgage, credit card debts, or a personal loan you are paying off. An insurance lump sum could pay some or all these debts thus not adding to your loved one’s burden when you pass away.

3. Your financial dependants

You may be still financially responsible for others such as your spouse, adult children, or a disabled child. Life Insurance can give you peace of mind as a senior should you die or be diagnosed with a terminal illness, potentially allowing your partner to continue with plans such as travel, renovating, or long-awaited retirement dreams. Furthermore, a Finder 2020 report indicated ‘The Bank of Mum and Dad’ help almost half (44%) of their adult offspring out with expenses. Life Insurance for seniors can uphold your wish that your children are financially supported after you die.

4. Estate equalisation

Life Insurance provides a solution to estate equalisation dilemmas. It can help allow you to keep your business, holiday home, and other assets in the family by leaving your assets to one beneficiary in your will while providing others with a lump sum from your Life Insurance policy.

5. To leave a legacy

According to Australian Charities and Not-for-profits Commission (Aust Gov), Australians are among the most generous people in the world per-capita when it comes to making donations to worthy causes. Many seniors use Life Insurance to be able to leave a cash benefit to their preferred charity or loved ones.

Things to consider when buying life insurance as a senior

Your health

As a senior Australian there are a few aspects that may affect your life insurance premium. Once you are over 65 your likelihood of developing health problems increases, and your insurance premium reflects this risk accordingly. Premiums will be decided by factors which include:

·        your age

·        your current health status

·        your smoking status

·        your gender

·        your previous medical history.

Your circumstances

When choosing life insurance products as a senior, you need to consider who are your financial dependants, what are your debts, and how much can you afford on premiums each month.

If you wish for the lump sum to cover the funeral costs and death expenses, try to factor in inflation; for example, if you die in 20 years’ time.

If your family’s finances and debts are settled then you may only require a low level of Life Insurance, or you may not require cover at all.

Your age

Life insurance policies – including Income Protection, Trauma Insurance and Total Permanent Disability insurance (TPD) insurance covers – usually expire when you reach a certain age. After that you may no longer be able to make a claim, even if you are still working. For some products this age is fixed, while others may allow you to continue the policy, for an additional premium.

Policy covers expire at a certain age, and these are nominated in the PDS for each product.

These age limits vary between policies, but are generally:

·        Term Life Insurance (life cover) – expires at 99 years of age

·        Total Permanent Disablement (TPD) – expires at 75 years of age, with the benefit value reduced by 10% from age 65

·        Trauma Insurance – expires at 70 years of age

·        Income Protection – expires at 65 years of age.

With NobleOak the maximum entry age for Term Life Insurance extends to age 69, and for Trauma Insurance and TPD Insurance the age extends to 59; for Income protection cover, it’s 55 years old.

Choosing whether you need Life Insurance as a senior is very personal. You can seek information through a Life Insurer like NobleOak who can give you general advice and product information,  carefully consider your own needs and circumstances, or seek professional assistance if you require personal financial advice.

Life insurance is generally worth considering at any age if you have a spouse or other dependants relying on you financially, a mortgage you are still paying, or you wish to protect loved ones against the monetary cost of your death.


[1] In the PDS documents for NobleOak’s trauma insurance, these conditions are known as Dementia – resulting in significant cognitive impairment, Stroke – in the brain resulting in specified permanent impairment, and Parkinson’s Disease and specified Parkinson Plus Syndromes – with specified severity

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