How To Get Reasonable Life Insurance for Seniors in Canada 2023

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Growing older comes with changes in health conditions, priorities, and other life factors. Among these factors is your need for life insurance. Perhaps your term life insurance has already ended, and now you are worried your age and health condition would make it difficult to get life insurance. Maybe you already tried once and have been denied coverage. 

Don’t be! There’s a wide range of options for reasonable life insurance for seniors in Canada available that you can choose from, and we are about to guide you through the process with this article. Read on!

So, want to get reasonable life insurance for seniors? This article contains all you need to know on what reasonable life insurance for seniors is, the benefits of having life insurance as a senior, and how to get the best rates.

What Exactly is Life Insurance for Seniors?

Any life insurance product exclusively provided for older Canadians is referred to as senior life insurance. Older people in this case are broadly people over 50 or 55. However, there are several senior life insurance products available to Canadians age 40, sometimes even less. 

Getting reasonable life insurance for seniors is a concern because senior life insurance policies are typically more rigid and costlier than life insurance policies for younger people. Nothing to worry about! That does not mean reasonable life insurance for seniors can not be found.

Is Getting Reasonable Life Insurance for Seniors Worth it?

Having reasonable life insurance for seniors in place is consoling. When one partner passes, the surviving partner receives a payout to cater for final expenditures and reimburse their pension plan. After a partner dies, government benefits like OAS and Canada CPP either stop or are reduced by a great degree, so receiving the payout at that time would be of great help.

Life comes in different phases, and there is an insurance plan for each one of them. Reviewing your policy from time to time will help you see if your current insurance plan matches both your present and future financial demands. As a senior, you likely have different financial concerns from the ones you had 20 to 30 years ago. You may have completed paying off your mortgage, college loans, and other debts. 

However, you are advancing in age, which could lead to the possibility of future healthcare costs. This and other expenses like estate taxes, leaving a gift for a cause close to your heart, etc. can all be covered by your life insurance policy. The benefits you will get from purchasing life insurance as a senior can not be exaggerated. The major issue is how to get reasonable life insurance for seniors.

More Benefits of Purchasing Reasonable Life Insurance for Seniors

As explained earlier, there are many life insurance plans for seniors, and adding one to your financial plan will provide you with many advantages. To make the benefits clear, let us highlight them: 

• Cover Your Outstanding Debts

When you purchase reasonable life insurance for seniors now, the coverage can cover your outstanding debts, such as rent, credit card bills, or delinquent loans. It’ll prevent your family members from inheriting these debts and be stuck figuring out how to pay them. 

• Help Reduce Your Family Members’ Financial Burden

The payout can reduce your family members’ financial stress by a great deal. Even if they are already independent, it can do as much as contribute to a grandchild’s college tuition. 

• Cover Expenses for Rites

A funeral can be expensive. You can save your family from being overwhelmed with thoughts of how to cover the cost while they are grieving. 

• Give to a Cause Close To Your Heart

You can contribute to a charitable cause you cherish so that your beliefs and values can keep living after you.

The Different Senior Life Insurance Policies

1. Term Life Insurance

Term Life Insurance is an income replacement. You decide how long you want your term to be. It could be a 10, 20, or 30-year term. The coverage is for a shorter period, so it costs less than Whole Life Insurance. A 60-year-old non-smoking male in good health will likely pay just over $97 monthly for a 20-year term life insurance of $100,000. For a female non-smoker, the payment begins at over $64 monthly

Life Insurance is mostly used to get you through your retirement age when you are likely to have settled most of your significant expenses. This is when you’ll be leaving the workforce, and any life insurance coverage you had through your employer would also end. Many people opt for Term Life insurance after retirement to help protect their spouse’s finances or provide for grandchildren’s needs.

Can Seniors At Age 70 Purchase Term Life Insurance?

The myth that seniors at age 70 or over cannot purchase new life insurance coverage due to advanced age or declining health is not true. However, term life insurance policy is not the best life insurance for seniors over the age of 70.

If you purchase a term life insurance policy at 70 years old, your premiums will continue to rise substantially over the next ten years. If you outlive the term and what to get back in with a term life policy, your rates will increase on an even greater note. 

What Is The Highest Term a Senior Can Select For a Term Life Insurance Policy?

Term life coverage is available for seniors that are 60-years or over up to the age of 85. Depending on your age, if you are over 60-years, your options are usually limited to 10-year,  20-year, or 25-year terms. Most insurers do not offer term policies to seniors above the age of 75. Permanent coverage such as term-100 or whole life coverage would serve as the available reasonable life insurance for seniors over age 75. 

You can renew most term policies up to a particular age, such as age 75 or 85. For some insurance companies, term life coverage is renewable throughout the policyholder’s entire lifetime (i.e., up to the age of 100). However, renewal prices are considerably higher.

On the surface, term life insurance might appear as the most affordable and reasonable life insurance for seniors to you. But, you have to consider the rates in the long run and the dramatic increase in premiums over the term to determine if it’s best for you.

Sure, you can convert your term life policy to permanent coverage, but most term life insurance policies are only convertible before age 71. However, some insurance companies allow you to convert before age 75. 

2. Whole Life Insurance

Whole life insurance is permanent life insurance. Unlike term life insurance, it lets you enjoy your finances during your lifetime.

It protects you throughout your lifetime, and your premium never changes irrespective of your age or health. This is a significant advantage because health issues can arise as you grow older. Naturally, health issues lead to increased premiums, but whole life insurance allows you to set a rate that would last you for life. An advantage huge enough to make it an ideal option for reasonable life insurance for seniors.

The payment is made immediately when you pass on. Many people purchase it to help family members cover funeral expenses and other final costs, so they don’t have to deal with financial stress during that difficult time. Knowing that your final expenses will be provided for, you can relax and spend your assets while you are alive.

3. No Medical Life Insurance

Advancement in age often comes with health issues, and these health issues can make it difficult for you to get accepted for life insurance. No Medical Life Insurance provides reasonable life insurance for seniors who are over 60 or those who may have a health condition with life insurance coverage. This life insurance policy is a good fit for you if you have any worries about getting coverage, or if you weren’t given life insurance due to your health issue. 

4. Guaranteed life insurance

It is similar to no medical life insurance and prevalent for people over 50 years. This policy is the most suitable if you don’t have access to other options because of lingering health conditions or age limits. You’ll pay higher premiums and get a lower payout amount for guaranteed life insurance, but you are guaranteed approval as long as you are within age 75. Usually, the death benefit for guaranteed life policies is limited to $50,000.

5. Life insurance for people with pre-existing conditions:

Some life insurance companies offer this to people with pre-existing conditions like HIV/AIDS instead of guaranteed life insurance. These people would not be approved for most types of life insurance, so this provides them with coverage. 

6. Simplified Issue No Medical Insurance for Seniors. 

This policy provides reasonable life insurance for seniors with health pre-conditions like specific diabetes types, non-serious heart disease. 

There are other life insurance products with smaller coverage amounts available for Canadian seniors like final expenses insurance and burial insurance. They are cheaper, and their main purpose is to help your family members cover your final costs.

How Much Will Life Insurance for Seniors Cost You?

The type of coverage you buy determines how much you will pay for life insurance as a senior. For instance, if you buy a $250,000 term life policy for a 20-year term at age 60, you will likely pay between $100 and $200 per month. If you wait till you are 75 to buy the same policy coverage, you can expect your premium to rise to between $550 and $876 per month.

Guaranteed issue insurance policies are usually available for coverage amounts ranging from $5,000 to $50,000, depending on the insurance company. The policies have a lower coverage amount, so they are usually the go-to for affordable or reasonable life insurance for seniors coverage.

Whole life insurance will cost you more than term life insurance. Whole life policyholders can pay up to six to 10 times more because of the cash value element added to the monthly premiums.

Which Policy Offers the Most Reasonable Life insurance for Seniors in Canada?

The answer to this question relies on the individual’s circumstances. A healthy 65-year-old who needs life insurance coverage to sort out a temporary need, e.g. an outstanding loan, would see term life insurance as a more reasonable choice. 

Nevertheless, many Canadian seniors prefer permanent coverage. Most 69 and above seniors aim for lifetime coverage to settle expenses like funeral costs and medical fees. Some also purchase it to leave a tax-free sum of money to their family members. A permanent form of insurance, like whole life insurance, suits this situation.

However, permanent life insurance is more expensive because they have an investment or cash value option. The cash value can be gotten during your lifetime either by withdrawing or borrowing it. But, many financial experts have provided reasons why this is a bad idea.

What Determines Your Life Insurance Rates or Approval as a Senior?

Different factors determine how much you’ll pay for life insurance premiums or if you’ll get approved at all. We’ll highlight these factors so 

Age:

 Your life insurance coverage greatly depends on your age. This is because the older you are, the more your chances of passing away within your term, and the higher your insurance costs. A person at age 50 will be considered lesser risk than someone at age 70. Therefore, buying a longer-term life insurance policy at age 70 would be way costlier than buying at age 50. The earlier you buy a policy, the lower your rates will be. 

Your coverage amount:

 The more coverage you want, the higher your premiums will be.

Health condition:

 If you have a chronic illness like cancer or heart disease, getting approved for life insurance can be difficult. The risk rates for these conditions increase when you are over 50, likewise your risk to the insurance company. 

On the other hand, a senior with excellent health and has no record of serious illnesses will enjoy more affordable life insurance. The difference in the premiums can be as high as 35%. 

Enrolment age:

 Most life insurance policies have maximum enrolment ages, and you have to look out for this while making your decision.

Existing health pre-conditions: 

Some health pre-conditions makes you eligible for a less expensive simplified issue life insurance, for other health pre-conditions guaranteed issue life insurance might be your only option.

Denied insurance policy:

 If a life insurance company had denied you a life insurance policy in the past, it might be difficult for you to get a simplified issue life insurance policy. You will likely have to consider a guaranteed issue life insurance policy.  

Some Life Insurance Companies for Seniors in Canada

Choosing a life insurance company from all the many options can be overwhelming. To give you a headstart, we’ve compiled a list of life insurance companies in Canada you can look into:

• ACA Assurance
• Assumption Life
• SSQ Group Insurance
• Canada Life
• Industrial Alliance
• Equitable Life of Canada
• BMO Insurance
• Industrial Alliance Pacific
• Standard Life
• Canada Protection Plan
• The Co-operators
• Transamerica Life Canada
• RBC Insurance
• Empire Life.

Some Frequently Asked Questions on Reasonable Life Insurance for Seniors

There you go! Buying life insurance can be a great way to protect your family members from difficulties while you are gone or give them an inheritance. We know how expensive it can be to purchase, but buying affordable and reasonable life insurance for seniors in Canada is possible. You don’t have to break the bank to maintain it either. 

Requirements for insurance policies vary from one insurer to the other. Some insurance companies can offer you better policies than others, so you have to compare the market. Ensure you consult a credible insurance broker who has experience in getting life insurance policies for seniors to help you navigate the market. Subscribe to our newsletter to be the first to get more exciting insurance content like this.

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