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 the best possible 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 the 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 the 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 2017 open enrollment period for Medicare runs from November 1 to December 15. 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
Home and Renters Insurance for Seniors
Many people aren't aware that home insurance rates can go down as they age. Why?
Most seniors spend more time at home. They're more likely to be home in case of an unexpected issue. For example, if an electrical problem starts a house fire, seniors have a higher chance of being at home to call firefighters. Insurance companies recognize this, and offer lower premiums because of it.
However, unlike car insurance and health insurance, age isn't a big factor in the cost of home insurance.
How is the cost of homeowner's insurance determined?
Your rate depends primarily on these factors:
- Location: Do you live in an area with natural disasters like floods and hurricanes? You will pay a lot more. Insurance companies know which regions file the most claims due to natural damages, so they charge more in those areas.
- Crime: Like natural disasters, if your area has high crime rates – particularly burglary and vandalism, you will pay more for home insurance.
- Claim frequency: Insurance companies don't like when you file claims. It costs them money. If you have filed claims in the past, insurers believe you're more likely to do it again. If you file enough claims, the can outright cancel your coverage.
- Your home: What kind of materials is your home made of? When was it built? Is it well-maintained? These all play a role in your insurance rates. For example, brick houses are less at risk for a devastating house fire, so they cost less to insure. And newer, well-maintained homes are usually cheaper as well.
- Safety features: Do you have a security system and deadbolt locks? Do you have smoke detectors and sprinkler systems? Is your home located near a fire station? If you said yes to any of those questions, you will likely save some money on homeowner's insurance.
- Risk: Conversely, homes cost more to insure if they have risky add-ons like swimming pools and trampolines.
- Credit score: Unfortunately, folks with bad credit scores pay a lot more for home insurance. Apparently, studies show that people with bad credit are riskier to insure and more likely to file claims. Credit-based insurance scoring is a controversial practice, but it's reality.
- Coverage levels: Like all forms of insurance, your coverage levels are directly proportionate to the price of your premium.
What seniors need to know about home insurance
There's a lot to consider. How much coverage do you need? What companies offer policies for seniors? How can you save money on your policy? How do you know you're getting a good deal?
First, your home insurance is not set in stone. It can and will change.Here are some of the things that will change the price of your policy:
- Getting a dog
- Remodeling a part of your home
- Redoing your roof
- Raising (or lowering) your credit score
Home insurance is extremely complex. Finding someone to help answer your questions is a good step. "Your agent can be a terrific resource," says Hebert. "He or she is an expert and can help you determine what coverage you need." Since insurance is complicated and your rates often change, it's important to stay educated about your home insurance. When it's time to renew, shop around and compare quotes from other insurance companies. Reassess your coverage levels. If you haven't already, consider bundling your home insurance with your car insurance.
We will cover the ins and outs of home insurance plans, where to get them, and how to save money.
What does a home insurance plan cover and how much coverage do seniors need?
You can tailor your home insurance policy to fit you and your home. Coverage options are diverse and dependent on your needs. But it's important that you have enough.
"Be careful not to shortchange yourself on coverage," warns Hebert. "Homes are most people’s biggest asset. Balance cost savings with necessary protection."
It's understandably tempting to get cheap home insurance to save money. But that's not advisable. "Don’t focus solely on the price, but balance your decision on the value and coverage provided for the price you can afford," explains Hebert. If you don't tailor your home insurance to your needs, you're at risk for unique problems.
For example, homeowners in disaster-prone areas should purchase flood coverage or earthquake insurance. People with jewelry collections or rare possessions can add a personal property policy. And you can purchase specific amounts for each coverage type. Here are some common coverage options:
- Dwelling: Known as Coverage A in many policies, this covers damages to the physical structure of your home. Note that dwelling coverage only pays for covered risks like fire, hail, theft, vandalism, and more. Depending on your provider and plan specifics, things like floods might not be covered.
- Recommended coverage: Buy enough insurance to cover the cost of rebuilding your home. As a senior, your home is your sanctuary, so make sure it's protected. Note: don't include the value of the land – just the structure. Due to the varieties in homes, construction costs, materials, and more, you should consult an expert to find out how much your home is worth.
- Unattached/other structures: Do you have a separate garage, tool shed, or mother-in-law unit? Any structure that isn't physically connected to your main dwelling may need additional coverage. Many unattached structures policies are based on a percentage of dwelling coverage. For example, if you have $450,000 in dwelling coverage, that could translate to $45,000 in unattached structures coverage.
- Recommended coverage: Find out if your unattached coverage is based on dwelling coverage or a flat rate. If so, make sure it's enough to cover the value of said structures. Some folks will skimp on unattached structures because they aren't as important as their actual home.
- Liability: This coverage comes standard with most homeowner's policies, and it's important. Liability coverage protects you from lawsuits if someone is injured on your property. Most liability coverages also pay for other people's medical bills, in the event of an injury. You can purchase separate medical coverage for liability policies that don’t include medical coverage.
- Recommended coverage: A standard liability policy usually covers $100,000. If you have a high net-worth, consider purchasing extra coverage. Your assets are at risk in the event of a lawsuit.
- Loss of use: Lets imagine that your home is destroyed by a fire. While your dwelling coverage will cover the cost of the damages, it won't pay for your temporary housing. Loss of use coverage does just that. Most loss of use policies will help with hotel costs, food, travel, and other living expenses.
- Recommended coverage: Loss of use plans are usually set at 20 percent of your dwelling coverage. For many people, that's enough. But seniors may want to consider more, as their living situations can be more delicate.
- Personal property: Dwelling and other structures cover the building – but what about the things inside? Personal property coverage will. This coverage protects your furniture, clothing, appliances, and everything you own from theft and damage. You can purchase extra coverage for high value items, like collectibles and antiques.
For personal property coverage, it's important to know the different between replacement cost and actual cash value. We cover that below.
- Recommended coverage: Your ideal coverage levels are based entirely on the value of your possessions and your needs. Consult an insurance agent to find the right coverage amount. If your assets are greater than the maximum coverage amount, you can purchase an umbrella policy.
Actual cash value vs replacement cost coverage
When you file a claim, your insurance company must determine a monetary value for your loss. There are two main methods that insurance companies use to decide how much to pay you for a claim.
Replacement cost is the exact amount it'd cost to replace damaged or stolen property. Your item is valued by what it costs to purchase a replacement. Replacement cost doesn't take depreciation into account.
Let's pretend your couch was destroyed by a fire. You paid $1,000 for this couch last year. With replacement cost coverage, your insurance company will reimburse you the full $1,000. If that same couch now costs $1,200, they'll pay you the extra $200.
Actual cash value, on the other hand, is the cost of the item plus depreciation. Think of it as market value. Your insurance company might value your couch at $800 after a year of depreciation. That's how much you would receive in an actual cash value claim.
You can purchase either type of coverage for your property. Note that replacement cost coverage is more expensive since it doesn't account for depreciation. But for many people, it's more than worth it when it's time to file a claim.
"Make sure that the replacement cost coverage on your home is reasonable and adequate," says Hebert. You won't regret it when it's time to file a claim.
You can read more about actual cash value and replacement cost coverage here.
Senior discounts for home insurance
You can benefit from plenty of discounts during your golden years, including home insurance. Here are some common discounts specifically available to seniors:
- Retiree credits: This is the big one. Since retired seniors are home often, they're more likely to be around in the event of an emergency like a fire or a burst pipe. This will save insurers money in the long run. That's why you can earn a retiree discount of 10 to 20 percent.
- Club or group membership: Seniors affiliated with certain groups – AARP being one of them – earn insurance discounts. An AARP membership can get you a 10 percent discount from many insurers.
- Loyalty bonus: People who stay with their insurance company for at least three years can earn loyalty discounts. These rate breaks range from five to 10 percent.
- More: There are numerous available discounts on home insurance for all age groups. Here are 19 ways to save money on home insurance.
What companies offer the best home insurance policies?
Several insurers sell policies for homeowner's. According to J.D. Power, here are the 10 best homeowner's insurance companies based on overall satisfaction:
- Amica Mutual
- Auto Club of Southern California Insurance Group
- Cincinnati Insurance
- Auto-Owners Insurance
- Erie Insurance
- State Farm
- American Family
Make sure you have identity theft and fraud protection
It's an unfortunate reality that there are many scams that specifically target seniors. From fraudulent IRS calls to internet scams, there's a lot to be aware of. No matter how informed you are, it's still possible fall victim to scams.
According to the FTC, 36 percent of people ages 50 and older are victims of identity theft, and 49 percent of individuals 50 and older are victims of fraud. It's a serious problem.
Fortunately, many homeowner's insurance companies also offer identity theft and fraud protection. It's usually an optional endorsement, meaning it costs extra. According to the Insurance Information Institute, adding identity theft protection to your home insurance policy usually costs $25 to $50 per year.
To avoid identity theft, be extremely cautious about giving out your personal information. Many scammers will contact you pretending to be affiliated with an important organization to access your details.
"The Social Security Administration, the IRS, or your local police department are incredibly unlikely to ever ask you for this information over the phone, email, or via social media," says Amy Nofziger, AARP's fraud expert.
"Don’t display or give out personal details like your birthday, bank account number or Social Security number to almost anyone who asks over the phone," warns Nofziger. "If you have any doubt at all, hang up, or close your browser and verify who contacted you."
It's not just phone scammers and internet hackers that can compromise you. "One method we continue to see that targets older adults is the simplicity of a stolen wallet or purse," explains Nofziger. "Don’t carry your Social Security card around with you. If you need it, take a picture of it with your phone or carry a copy."
If you're a victim of identity theft or fraud, your home insurance company can help you out. Since identity theft and fraud protection is so affordable, it's a smart purchase.
Renters and assisted living insurance for seniors
Owning a home requires maintenance and upkeep, so some homeowners sell their homes as they get older. Some seniors rent for their entire lives. Many folks choose to live in assisted living or retirement facilities.
Even if you don't own a home, it's still important to protect your possessions and liability. Most seniors are on fixed incomes, meaning that they don't have disposable income to cover unexpected accidents. That's why many insurance companies offer renters insurance. It provides similar protection to homeowner's insurance, but for people who don't own their home.
Renters insurance policies include personal property coverage for your possessions, as well as liability protection. The latter helps pay for medical expenses that happen if you or someone else is injured in your home. That includes dog bites. Since seniors are at higher risk for accidents and falls, renter's insurance is especially helpful here.
People who move into assisted living facilities lose their personal liability insurance. While assisted living facilities have insurance policies, they don't provide liability protection to the tenants. Renters insurance is still a necessity.
If you rent or move into an assisted living facility, you need personal liability. It disappears when you move into an assisted living facility. This can cover pet bites as well.
The good news is that renters insurance is pretty affordable. According to the National Association of Insurance Commissioners, in 2014 the average renters insurance policy cost less than $16 per month.
Who offers the best renters insurance?
J.D. Power's study found that renters insurance customers of the following companies have the highest overall satisfaction:
- American Family
- Erie Insurance
- State Farm
- Auto Club of Southern California Insurance Group
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 the best 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 the best possible 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.