Congratulations, seniors! It's time to enjoy your well-deserved golden years. Even though you certainly have better things to do, it's also time to reassess your insurance policies.
Becoming a senior is a period of change, and your insurance is no exception. You may be dealing with fluctuating rates, coverage changes, and new insurance needs. We can help you cut through the noise to understand your insurance.
This article will cover the ins and outs of every form of insurance for seniors. For example, did you know most insurance companies offer senior discounts? Some companies even offer senior-specific insurance plans.
We'll cover the following types of insurance for seniors:
- Long-term care
Car Insurance for Seniors
Seniors face some interesting challenges when it comes to auto insurance. Drivers in their early 60s pay some of the lowest car insurance rates across all age groups.
Unfortunately, that relief doesn't last long. Drivers around ages 70 and up can expect their car insurance rates to rise significantly.
Why? People around age 60 are statistically risk-free drivers. They're involved in less accidents and traffic violations. Insurers study these trends and price their rates accordingly. However, around age 70, the trend reverses. Drivers in this age group have higher accident rates than others.
But there is some good news, seniors. Most insurance companies offer discounts for senior drivers! You can often expect a rate discount of about 10 percent just for being a senior.
It's also common for insurers to give discounts to mature drivers who complete a defensive driving course. Other discounts catering to senior drivers are also available.
Car insurance is crucial for everyone – especially seniors. Since accident frequency goes up with age, it's important to have proper coverage. William Hebert, director of regional sales for Mercury Insurance, asks "Do you have adequate liability coverage to protect the assets you’ve worked all your life to obtain?"
Do seniors pay more?
Drivers between the age of 55 and 65 can expect to pay some of the lowest rates of any age groups. Of course, your exact rate depends on several factors:
- Where you live
- Your driving history
- Car make and model
- Coverage amount
After 65, most drivers will see an increase in their rates. Unfortunately, premiums are likely to rise every renewal from here on out. Why? Drivers in this age group have a higher likelihood of car accidents. Even if you're a great driver at that age, you're still liable to be considered a risk.
How can seniors get cheap car insurance?
Since rates can quickly rise for seniors, getting a great deal on car insurance is vital. Here are a few steps you can take to get cheaper auto insurance rates:
- Senior discount: Seniors benefit from lots of discounts, and car insurance is no exception! Almost every insurance company offers a discount to senior drivers. The minimum age varies from company to company, with discounts starting for people as young as 50. These discounts range from five to 10 percent.
- Bundling: If you buy multiple insurance policies from one company, you will save money. Bundling home and car insurance with the same carrier, for example, can net you a discount of 25 percent. You can save even more by adding your life and health insurance to the bundle.
- Low mileage: Seniors drive less than other people on average. Insurance companies love this. The less you drive, the less likely you are to be involved in an accident. That, ultimately, leads to less claims for your insurer to deal with. Safeco Insurance, for example, offers discounts as high as 20 percent for low-mileage drivers.
- Defensive driving course: Taking a defensive driving course will sharpen your skills behind the wheel and save you money. AAA, AARP, Farmers, and others offer driving courses specifically for senior drivers. Many courses are completed entirely online with prices starting around $30 dollars. Defensive driving courses can quickly pay for themselves with insurance discounts ranging from five to 20 percent.
- More: There are many ways to get discounts on car insurance. It's up to you to find them. For more tips on how to save money on insurance, read our list of 32 car insurance discounts.
Five Companies With Senior Discounts
Most car insurance companies offer discounts for senior drivers. But a few companies go above and beyond:
- The Hartford: AARP members ages 50 and up can sign up for The Hartford's AARP-approved car insurance plan. This is the only car insurance plan designed entirely for seniors. It features:
- Lifetime renewability
- Home care assistance after accidents
- Towing and labor
- Accident forgiveness
- Year-long rate protection
- Farmers: Seniors who complete a defensive driving course can earn sizeable discounts from Farmers. Drivers must be 65 or older – 55 in some states – to qualify. With the discount, the driving course will pay for itself.
- GEICO: Looking for a solid policy discount? GEICO offers mature driver discounts for people over the age of 50. Plus, their policy includes a guaranteed renewal option. This means they won't drastically raise your rates or drop you when it's time to renew. To qualify, you must be accident and violation free for the past three years. GEICO also offers defensive driving courses specifically for mature drivers.
- Nationwide: Drivers 55 and over are eligible for special discounts. All they have to do is complete an approved defensive driver course. Most can be completed online, and they lead to an easy five percent premium discount. At that rate, the course quickly pays for itself.
- American Family: Like Nationwide, AmFam customers ages 55 and up qualify for discounts as high as ten percent. All they have to do is complete an approved defensive driving course.
Discounts aren't the only thing to consider when shopping for car insurance. It's also important to take customer satisfaction and claim quality into account. That's why we think you should do more research. Consider, for example, taking a look at the J.D. Power insurance study on claim satisfaction. According to their study, the following companies have the highest overall claim satisfaction:
- The Hartford
- NJM Insurance Co.
- Auto-Owners Insurance
- American Family
- Amica Mutual
- Auto Club of Southern California Insurance Group
State specific laws for senior drivers
Each state has different restrictions and requirements for senior drivers. This can include early and frequent renewals as well as cognitive ability tests. These tests are designed to determine whether or not senior drivers can safely operate a car.
Licensing requirements differ by state. In DC, drivers over age 70 need a physician's approval to renew their license. In Illinois, drivers ages 75 and up must take a driving test to renew. Many states also give licensing centers the authority to require further testing if they believe a person is unfit to drive.
Curious about your state's license renewal requirements? Click here to see a table with a detailed breakdown of each state's renewal procedures.
RV Insurance for Seniors
According to the New York Times, there are between 750,000 and one million retirees who own RVs. RVs are expensive and filled with personal belongings, making insurance a necessity. There are several different kinds of RVs, meaning there are many types of insurance plans to choose from.
Here are the most common forms of RVs:
- Class A – As the largest RV available, Class A motorhomes closely resemble busses.
- Class B – These RVs look like campervans and are built on a van chassis.
- Class C – Between Class A and B is the medium-sized Class C motorhome.
- Truck camper – Small mobile home affixed directly to the back of a standard truck.
- Fifth wheel trailer – Similar to a Class C motorhome, but it's towed behind a standard truck.
- More – Sleeper units, teardrop trailers, travel trailers, tent trailers, toy haulers, and others.
Here's what you should consider when shopping for RV insurance:
- Living vs leisure: If an RV is your permanent residence, you will want more coverage. The stakes are higher for full-time RV residents. You can purchase a full-timer plan which includes liability, medical payments, and loss coverage. If you don't use your RV all the time, a standard policy with storage or part-time coverage for when it's parked may be enough.
- Your belongings: A standard RV policy will likely cover the vehicle and your liability like regular car insurance. But it won't always cover your possessions. A personal effects policy add-on will. This is important for full and part-timers alike.
- Custom RVs: Many RV enthusiasts like to tinker. If your RV has expensive or unique add-ons, you will need extra coverage. For example, a standard policy won't always cover solar panels and custom attachments.
- Old RVs: Vintage classic RVs are more likely to break down. If that happens, you will want to have roadside assistance and emergency expense allowance.
Most insurance companies offer RV policies. Some companies like Good Sam, Explorer RV, and RV America specialize in RV insurance. Remember that bundling saves you money, so consider purchasing RV insurance from your car or home insurance company.
Health Insurance for Seniors
Health insurance is important for everyone. It's especially important for senior citizens, as health issues become more pertinent at that age.
Unfortunately, health care is very complex. Picking a plan can be overwhelming. Here's what you need to know to find the right healthcare plan: What is the Affordable Care Act?
In 2014, the Affordable Care Act was enacted. It had several impacts on health insurance, particularly for seniors. These are the ACA's key tenets:
- Preexisting conditions: Before ACA, insurance companies could turn down people with preexisting conditions. The ACA requires insurance providers to accept all applicants, regardless of health.
- Different premiums for different ages: Since seniors are more likely to have health issues, insurance companies charge them more for coverage. Before ACA, the age-based rate differences were steep. While insurers still charge more for certain age groups, they must follow strict guidelines.
- More Medicaid: Low-income seniors have more options for health insurance. The ACA makes it easier to qualify for Medicaid.
Different healthcare options for seniors
There are many routes seniors can take when shopping for healthcare plans. Here are the most common:
- Medicare: Medicare is a federal health insurance program designed primarily for people age 65 and older. These plans cover about half the cost of most healthcare services. In 2015, there were over 55 million Medicare beneficiaries in America.
You can enroll in Medicare three months before your 65th birthday, the month of your birthday, as well as three months after. That's a seven-month window. Missing the open enrollment window can lead to financial penalties, so it's important to be aware.
There are four main types of Medicare – Part A, B, C, and D:
- Part A and Part B, known as original Medicare, cover inpatient and outpatient services like hospital visits and doctor's appointments.
- Part C combines both A and B into one plan. These are known as Medicare Advantage Plans and they include PPOs and HMOs.
- Part D covers prescription drugs, which aren't covered by other parts.
- Medicaid: Lower income families, people with disabilities, pregnant women, and seniors can qualify for Medicaid. Like Medicare, it's also federally funded. Medicaid is like Medicare but designed specifically for people in need. It can also be used in conjunction with Medicare, providing extra coverage for those who need it.
There are several different classifications and plans for Medicaid users. If you want to know more about Medicaid, what it covers, and how it's different from Medicare, read our article on Medicare vs Medicaid. To find out if you qualify for Medicare, visit the national Health & Human Services website.
- Private health insurance: While Medicare pays for many services, it doesn’t cover everything. People with extensive or unique medical needs can purchase a health plan through a private insurance company. This is a good option to consider if you have enough disposable income.
Are you looking to purchase a private health plan? You'll need to shop around and compare different insurance companies. This will ensure that you get your best possible deal. How can you do that without calling every insurance company? With QuoteWizard! We can help you easily compare health plans for free.
Even if you have Medicare, you may want extra coverage. There are private health plans designed specifically to work with Medicare. These are known as Medigap or Medicare Supplement plans.
- Medigap: While Medicare provides good coverage for most health issues, it doesn't cover everything. There are coverage gaps. People with lengthy medical needs may need more coverage. That's what Medigap (also known as Medical Supplement plans) is for.
Medigap is a private insurance plan that helps pay for Medicare's deductibles and copayments. There are several different Medigap plans available, each with different costs and benefits. If
you're concerned that Medicare doesn't provide enough coverage, you may want a Medigap plan. For more information, read 'When Does It Make Sense to Get a Medicare Supplement Plan?'
For more information on Medigap, read the Medicare.Gov guide to Medigap.
- Retiree/COBRA insurance: Some seniors are eligible for health care through their employers. These plans are known as retiree insurance or COBRA insurance. Both platforms usually work together with Medicare.
COBRA is a federal law where retired employees can keep their work-sponsored health insurance for up to 36 months. Retiree insurance is somewhat rare as most employers don't offer it. Read more about retiree insurance here and COBRA insurance here.
How to pick the right health insurance plan
With so many options, it's not easy to know which plan you should pick. What kind of health insurance plan should you pick? What sort of deductible do you want? There are plenty of questions you should ask when considering a health insurance plan.
First, take your time. "Don’t just jump on the first thing you friend or family member recommends or the big-name company you recognize" says Garrett Ball, president of Secure Medicare Solutions. "Those may be good options ultimately, but you need to do your own homework and remember that different situations make different plans more advantageous."
Second, find someone who can help you find the right plan. "Make sure you're working with an agent find someone who can help you find the right plan. "Make sure you're working with an agent who can respond to you, and who can guide you to making the best decision," says Reid Mathews, a Retired Income Certified Professional with Berry Financial Group. If you're working with a quality agent, they can provide you the service you deserve, as well as your best plan for the least amount of money.
Ball agrees about the importance of finding a trustworthy agent. "It's a good idea to find a truly unbiased independent broker that can help you compare the plans and does not work for one specific insurance company," he explains.
These are a few things you should consider when choosing your insurance provider.
- Your health: Are you healthy? Healthy people are often tempted to skimp on coverage. Why pay for it if you don't use it? Unfortunately, health is something that can rapidly change – particularly for seniors. When picking an insurance plan, think about your health levels as well as how much you've spent on healthcare in the past few years.
- Coverage levels: Plenty of people pick the cheapest plan and hope for the best. We don't recommend this. If you buy cheap health insurance, you'll probably end up paying for it in the long run. Low monthly premiums and skimpy coverage levels usually mean high deductibles and out of pocket costs. Paying a higher premium will often save you money in the long run.
- Enrollment dates: Did you know you can get penalized big time if you miss open enrollment dates for health insurance? The 2022 open enrollment period for Medicare runs from October 15 - December 7. If you need to enroll or make changes to your plans, do it within the enrollment period. Missing the open enrollment date will make it harder to change your plan, and you could be fined.
- Preferred provider: Do you have preferred doctors and hospitals? If so, make sure any prospective health plan covers your chosen providers. Each insurance provider or plan has their own networks. Some are more flexible than others when it comes to out-of-network appointments.
- Medication: Do you take specific medication? Is that medication expensive? Make sure your new plan has prescription drug coverage. Original Medicare, for example, does not cover prescription drugs. Unfortunately, it's a necessity for many people, and it's not cheap. "There is definitely not a magic bullet when it comes to prescription drug coverage," says Mathews.
- Unique or serious conditions: People with special medical needs may need special insurance plans. For example, if you rely on alternative care like naturopathy and acupuncture, you're going to have a hard time getting coverage. You may want to consider an FSA or HSA for flexibility with your medical spending.
Ambulance rides and hospital days are only partially covered by most plans. Medicare, for example, only covers 60 hospital days. A Medigap plan provides coverage for substantially more hospital days. Folks with serious medical issues will probably want to purchase more than standard coverage.
What companies offer the best Medicare Advantage plans?
According to J.D. Power, customers of the following companies are most satisfied with their Medicare Advantage plans:
- Kaiser Permanente
- BlueCross BlueShield of Michigan
- Health Net
- Cigna HealthSpring
Long Term and Nursing Care
The need for assisted living is an unfortunate reality for most senior citizens. With so much to consider when it comes to long term care, it's easy to forget that long term care is extremely expensive. On top of that, most healthcare plans explicitly do not cover it.
Will you need long term health care in the future? You can purchase an insurance plan specifically for long term care. There are a few important things to consider with these plans.
First, buying a long-term care insurance plan is cheaper when you're young. In fact, the younger you are, the cheaper it is. You may not need long-term care now, but virtually every senior will need some form of assisted care as they age.
Some people are lucky enough to have family and friends who will help as they age. But it's difficult to rely on others for all your care. Investing now in tomorrow's care is a smart choice. Plus, long-term care policy benefits usually aren't taxed as income.
Unfortunately, some assisted living facilities have had problems with elder abuse and substandard care. If you're considering a long-term care facility for yourself or a loved one, make sure that facility is well-reviewed and certified. Check with Ombudsman, a national senior advocacy group that focuses on abuse in long-term care and nursing facilities.
Where can you purchase long term care insurance? There are several options:
- Individual plans
- Employer plans
- Organizations and clubs
- State partnership program
- Joint policies
Many companies offer long-term care insurance, including the following:
Most long-term care insurance DOES covers the following:
- Home care services
- Assisted living
- Adult day care
- Home alteration
- Hospice care
- Nursing homes
- Alzheimer's care
Most long-term care insurance DOES NOT cover the following:
- Preexisting conditions
- Mental health
- Nervous disorders
- Care from family members
- Healthcare in a foreign country
Homeowners and Renters Insurance for Seniors
As a senior citizen, protecting your home and belongings is a necessity. Ensuring you're covered with homeowners or renters insurance will save you time, energy, and a lot of money.
Homeowners insurance has you covered if your home is damaged or destroyed. Repairing a damaged home is expensive at best and impossible at worst if you don't have insurance to help you out. As a senior, your house is likely you're biggest investment. Homeowners insurance also protects your liability if someone gets hurt in your home.
If you own your home, read our article on homeowners insurance for seniors to understand your full coverage options. Even if you're not a homeowner, you still need insurance! That's where renters insurance comes in. Renters insurance protects your possessions in case of theft, fire, and other disasters, even if you don't own their home. This type of insurance also protects your valuables as you take them away from home with you. If you rent – whether it's an apartment or a retirement home – you need renters insurance. Read our article on renters insurance for seniors to learn more.
Life Insurance for Seniors
No one likes talking about life insurance. Though it's a sensitive subject, it's very important. A good life insurance policy will ensure that your loved ones are financially cared for. Unfortunately, life insurance policies are more expensive for seniors. But there are still plenty of options.
Do I need life insurance?
Life insurance isn't a necessity for everyone. Would your death cause financial stress to your loved ones?
"When seniors are considering life insurance, the most important factor is to determine why they are purchasing it," says Mathews.
"Whether it be to cover the mortgage on their home, pay for their burial at their death, or create a college fund/legacy plan for their heirs, by far the most important factor is why they are purchasing [life insurance]," explains Mathews.
Here are a few common scenarios where people might not need a life insurance policy:
- Your children and spouse are financially independent
- You're debt free
- You have long-term care insurance
- You have considerable savings
- You don't have a mortgage
Just because one of the above scenarios applies to you does not mean you don't need life insurance. Simply wanting to leave an inheritance for your loved ones is enough of a reason to consider a life insurance policy.
What type of life insurance should seniors buy?
There are three common types of life insurance:
- Term: Provides life insurance for a specified term. For example, State Farm offers $100,000 coverage of term life insurance policies for 10, 20, and 30-year terms. Once that term passes, your policy is no longer in effect – unless you renew. Term life policies are usually the cheapest. Some companies limit year terms for seniors. They may sell a 10 year term policy, but not a 20 year term policy.
- Whole/permanent: Covers you for the remainder of your life. Whole life insurance policies can also an investment attachment, meaning the policy payout can grow. These policies are more expensive and complex, but the premium remains the same and the benefits are guaranteed.
- Guaranteed universal: Term life insurance offers coverage for a certain amount of years, while guaranteed universal life insurance offers coverage until a specific age. It's usually cheaper than whole life insurance because it doesn't accrue cash value. Also, the premiums don't change from year to year like term insurance.
Which one works best for seniors? We think it's guaranteed universal insurance. Why? First, premiums don't change from year to year. Seniors are at risk of huge rate hikes when it comes to life insurance, and a guaranteed universal plan mitigates that. Second, guaranteed universal plans don’t build cash value, meaning they're straightforward and less risky.
Also, the fact that guaranteed universal plans are considerably cheaper than whole life is attractive. Purchasing a life insurance policy becomes exponentially more expensive for older people, so saving money where possible is a big benefit.
But everyone's needs are different. For instance, younger seniors may prefer term insurance because it can be cheaper in the short term. We recommend speaking with an agent who can answer your specific questions.
How much does life insurance cost? How do I choose a good plan?
It's hard to estimate the cost of a life insurance policy, because so many factors come into play.
First, you need to choose a policy type. Do you want term, whole life, or guaranteed universal? As we discussed, each plan has different pros and cons, meaning their prices vary.
Second, you need to choose a benefit amount. This is the sum that your loved ones receive in the event of your passing. Obviously, a higher payout will cost you more. You can purchase a death benefit as low as $25,000 or as high as a whopping $201 million. Again, this depends on your finances and personal needs. Finally, your personal information is a vital component. Your occupation, where you live, and your health are all deciding factors to determine the cost of life insurance. Women, on average, pay less than men for life insurance because they live longer.
Many life insurance companies require shoppers to undergo physical exams. As a result, people with a history of health issues pay more. Smokers, for example, can expect to pay three to five times more for life insurance than non-smokers.
So how do you find the right plan? We suggest two things. Speak with an agent who can guide you through the complexities of life insurance. Second, compare different companies to find one that fits your needs best. QuoteWizard can help you easily compare life insurance quotes.
What companies offer life insurance for seniors?
Most insurance companies sell some forms of life insurance policies. These are a few companies with senior-centric life insurance policies:
- North American Company for Life and Health Insurance
- Fidelity Life
- American National
- Colonial Penn
- Mutual of Omaha
- State Farm
- Liberty Mutual
- New York Life
You can also check J.D. Power's top ranked life insurance companies to find more companies. Though they may not have policies specifically for seniors, these companies are highly-rated and respected.
4 Final Insurance Tips for Seniors
There are a few important things that all seniors should know about every type of insurance:
- Check for discounts: Insurance companies offer many discounts. But it's often up to you to identify these discounts. Check your insurers website, or call an agent to find out about potential discounts.
- Reassess your coverage: Lifestyle changes can mean you have too much – or too little – coverage. Reassess your coverage amounts when it's time to renew so that you're not overpaying or under-covered.
- Shop around and compare: Unfortunately, loyalty to one company isn't always rewarded. Many insurance companies will raise your rates annually because they know that people don't like to shop around.
That's why shopping around and comparing quotes is vital. It helps you know you're getting a good deal on your insurance. QuoteWizard can help you instantly compare quotes from top insurance companies.
- Ask an expert: Insurance is complicated. Trying to figure it out yourself can leave you more confused than when you started. We recommend consulting an expert to answer your questions. They can give you specific answers, recommend insurers, and help you tailor your policy to suit your unique needs.
Finding unbiased information about insurance is challenging. Below are links to reputable organizations and non-profits for seniors, benefits, and insurance. These resources can educate you and answer your questions with no strings attached.
- National Council on Aging: Non-profit charity group dedicated to helping seniors age gracefully. Services include benefit checkups, Medicare assistance, and housing advocacy.
- National Institute on Aging: Federal research organization with lengthy resources on senior health. This organization conducts comprehensive studies on aging, Alzheimer's, caregiving, and more.
- Medicare: The federal government's official Medicare website is stocked full of helpful information. You can sign up for Medicare, learn the intricacies of all available plans and enrollment dates, and access other resources.
- Long-term care: The federal government's official long-term care resource. Learn where to get LTC, how Medicare and Medicaid interact with it, and how much it costs.
- Insurance Information Institute: An industry organization aiming to 'improve public understanding of insurance.' If you have insurance questions, the III can help you find answers.
- Healthcare: This is the official healthcare marketplace for the federal government. You can read about healthcare, study plans, and purchase insurance through here.
- Benefits checkup: Complete a short questionnaire to find out which senior benefits and assistance programs you qualify for.
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