Term life insurance covers you for a set number of years and pays only if you die in that window. Whole life covers you for life, keeps the same premium, and builds cash value. After 60, term costs far less for a large death benefit: in Policygenius sample rates, $250,000 of 20-year term ran about $147 a month at 60, while $250,000 of whole life ran about $820. Term fits a need with an end date, like a mortgage or a spouse who needs your income for 10 to 20 years. Whole life fits a need that lasts as long as you do, like final bills or money left to heirs.
This page is a head-to-head comparison. For a broader look at every senior policy type, including guaranteed issue and VA coverage, see our guide to life insurance for seniors. Nothing here is a quote or a recommendation of any company. Each insurer sets its own prices and rules.
Term vs Whole Life at a Glance
| Feature | Term life | Whole life |
|---|
| How long it lasts | A set term, often 10, 15 or 20 years | Your whole life, as long as premiums are paid |
| Premium | Level during the term, then much higher if you renew | Usually level for life |
| Cost for the same death benefit | Much lower | Several times higher |
| Cash value | None | Yes, grows over time |
| Can you borrow from it | No | Yes, against the cash value |
| What happens if you outlive it | Coverage ends, nothing is paid back (unless it is a return-of-premium policy) | Nothing to outlive |
| Typical coverage bought after 60 | $100,000 and up | $10,000 to $250,000 or more |
| Counts as an asset for SSI and most senior Medicaid | No | The cash value can, if total face value is over $1,500 |
| Best fit | Debts or income needs that end | Lifelong needs: funeral, final bills, inheritance |
The NAIC Life Insurance Buyer's Guide, which state insurance regulators publish, sums up the trade-off: whole life premiums are generally level, but early premiums can be several times higher than the same amount of term coverage, and the extra builds cash value.
How Much Each Costs After 60
There is no official price list for private life insurance. The figures below are sample rates published by the broker Policygenius for nonsmokers, valid as of September 12, 2024. Term figures are averages across eleven insurers. Whole life figures come from three insurers. They show how the gap looks, not what you will pay.
$250,000 of coverage, monthly
| Age when you buy | 10-year term | 15-year term | 20-year term | Whole life |
|---|
| 60 | $81 | $105 | $147 | $820 |
| 65 | $131 | $179 | $252 | $1,074 |
| 70 | $229 | $325 | $481 | $1,457 |
| 75 | $432 | $650 | Not shown | Not shown |
$100,000 of coverage, monthly
| Age when you buy | 15-year term | Whole life |
|---|
| 60 | $53 | $332 |
| 65 | $88 | $434 |
| 70 | $162 | $587 |
| 75 | $314 | Not shown |
Source: Policygenius sample rates, nonsmokers, valid as of 09/12/2024. Your price depends on your insurer, health class, sex, tobacco use and state.
What the gap adds up to
Take a 60-year-old buying $250,000. Using the yearly figures in the same samples ($1,762 for 20-year term, $9,846 for whole life):
- 20-year term: about $35,240 in premiums over 20 years. If you are alive at 80, coverage ends and nothing comes back.
- Whole life: about $196,920 over the same 20 years, and the premiums keep going after that. The policy pays at death whenever it happens and has built cash value along the way.
So the real question is how long the money needs to be there. If it is until the house is paid off, whole life means paying for decades of coverage you may not need. If it is whenever you die, term can run out first.
Prices climb fastest for term
In the samples, $250,000 of 10-year term costs more than five times as much at 75 ($432) as at 60 ($81). Whole life rises with age too, but you lock in the rate when you buy and it stays level. For both types, buying earlier costs less, and your health on the day you apply matters as much as your age.
How Long Each One Lasts
Term: coverage with an end date
You pick the length when you buy. After 60, many insurers still offer 10, 15 and 20-year terms, but the longest options shrink as you age. The Policygenius samples show 25-year term only through age 65, 20-year only through 70, and 10-year at 80.
When the term ends, you usually have three choices:
- Let it lapse. Coverage stops. This is the plan for most term buyers whose need has ended.
- Renew it. The NAIC guide says most term policies can be renewed "even if your health has changed," but "premiums may be higher" each time. After 70, renewal prices can be steep, and many policies cap renewals at a set age. Ask your insurer for the renewal premium in writing.
- Convert it to permanent coverage, if the policy allows and you are still inside the conversion window (see below).
Whole life: coverage that does not run out
Whole life lasts as long as you keep paying. The NAIC guide puts it plainly: whole life "covers you for as long as you live if your premiums are paid." The premium is set at purchase and generally does not rise. If you stop paying, the policy may lapse or the insurer may use the cash value to keep a smaller amount of coverage in force, depending on the policy's options.
Cash Value: What You Get and What It Costs
Only whole life (and other permanent policies) builds cash value. Part of each premium goes into it, and it grows over time.
You can use the cash value in three ways:
- Borrow against it. The NAIC guide warns that an unpaid loan and its interest are "subtracted from the benefits when you die."
- Surrender the policy and take the cash value. In the early years it is usually far less than what you paid in. If you get back more than you paid in premiums, the IRS taxes the difference as income.
- Use it to keep the policy going if you can no longer afford premiums, depending on the policy's options.
Cash value and SSI or Medicaid
This matters if you get, or may one day apply for, SSI or Medicaid, including Medicaid for nursing home care. Under SSI rules (20 CFR 416.1230), term insurance is never counted as an asset. For whole life, if the total face value of all your policies is $1,500 or less, the cash value is ignored. Above $1,500, the full cash surrender value counts toward SSI's $2,000 resource limit ($3,000 for a couple). Most state Medicaid programs for seniors and people with disabilities follow the same rule, though some differ. SNAP does not count life insurance cash value.
So a $25,000 whole life policy with $6,000 of cash value can push someone over the SSI limit, while a $250,000 term policy cannot. Our guide on how life insurance counts for SSI and Medicaid walks through the burial fund exclusion and what to do if a policy puts you over.
Converting Term to Whole Life
Many term policies include a conversion option. It lets you switch some or all of the term coverage to a permanent policy without a new medical exam. The NAIC guide says you can convert during the conversion period even if your health has slipped, but the new premium will be higher than the term premium.
What to know after 60:
- The window closes. Each policy sets its own deadline. Some allow conversion only in the first few years of the term. Others allow it until a set age, often 65 or 70, or until the term ends, whichever comes first. Check your policy's conversion clause now, not the year the term runs out.
- The price is based on your age when you convert. Converting at 72 means paying a 72-year-old's whole life rate. Your original health rating usually carries over, which is the main benefit.
- You can often convert part of it. Keeping $50,000 of a $250,000 term policy as whole life can cover final expenses at a fraction of the cost of converting all of it.
- It matters most if your health has changed. After a heart attack, cancer or another new diagnosis, conversion may be the only way to get permanent coverage at your original health rating.
Group life insurance through an employer often has a similar right to convert to an individual policy when you retire or leave the job. The window is short, so ask your benefits office before your last day.
Who Each One Fits After 60
| Your situation | Usually fits better | Why |
|---|
| Mortgage or other debt with 10 to 20 years left | Term | Coverage matches the debt and costs far less |
| A spouse depends on your pension, paycheck or Social Security | Term, sized to the gap | Survivor benefits may replace part of it; term covers the rest for a set time |
| You want money for a funeral and final bills, whenever you die | Whole life (often a small final expense policy) | Term could end before you do |
| You want to leave a set amount to children or a charity | Whole life or guaranteed universal life | Coverage lasts for life |
| Health has gotten worse and you have convertible term | Convert part of the term | No new health review |
| Tight budget, but a large need for the next 10 years | Term | Whole life for the same amount may not be affordable |
| You get, or may apply for, SSI or Medicaid | Term, or whole life with face value of $1,500 or less | Cash value can count against asset limits |
| 75 or older, or serious health problems | Small whole life, final expense or guaranteed issue | Term may not be offered or may cost more than it pays |
A middle option is guaranteed universal life, which can last to a set age, often 90 to 100 or more, with level premiums and little or no cash value. It typically costs less than whole life for the same death benefit. Ask an agent to show it next to both term and whole life.
For smaller policies built only to cover a funeral, see our guides to final expense insurance and burial insurance. Both are usually small whole life policies with simpler health questions.
How to Decide: Step by Step
- Write down what the money is for. A debt, an income gap, a funeral, an inheritance. List each need and how long it lasts.
- Put a number on each need. Add debts, funeral costs and what a survivor would need, then subtract savings and any survivor benefits.
- Match each need to a type. Needs with an end date point to term. Lifelong needs point to whole life or guaranteed universal life. Many people over 60 end up with both: term for the mortgage and a small whole life policy for final costs.
- Check what you already own. Find any existing term policy and read its conversion clause and deadline. Ask about employer or union coverage and whether it can be converted at retirement.
- Check your benefits. If you get SSI or Medicaid, or may need Medicaid for long-term care, ask how a cash-value policy would count before you buy.
- Get quotes from more than one licensed agent or insurer. Prices for the same person vary widely. Confirm the agent and company are licensed through your state insurance department. Ask for term and whole life quotes for the same death benefit side by side.
- Read the policy before you pay. Look for when coverage ends, whether premiums can rise, renewal and conversion terms, and any waiting period. Use the free look period your state requires to cancel for a refund if it is not right.
- Do not cancel old coverage first. The NAIC guide says not to cancel an existing policy "until you have received the new one." A new policy is priced at your current age and restarts the contestability period.
Frequently Asked Questions
Is term or whole life cheaper for a 60-year-old?
Term is much cheaper for the same death benefit. In Policygenius sample rates for nonsmokers (valid as of September 12, 2024), $250,000 of 20-year term cost about $147 a month at 60, while $250,000 of whole life cost about $820. For $100,000, 15-year term was about $53 and whole life about $332. Your price will differ.
Is whole life insurance worth it after 60?
It can be if you need coverage that lasts for life, such as for funeral costs, final bills or an inheritance, and you can afford the premium for the rest of your life. If your need ends in 10 or 20 years, term usually costs far less. If cash value growth is your main reason, compare it with other savings options first, since much of the premium pays for the insurance itself.
What happens when my term life policy ends?
Coverage stops and the insurer pays nothing unless you have a return-of-premium policy. You may be able to renew it at a higher premium or convert it to permanent coverage if the conversion window is still open. Check your policy, because renewal and conversion rights often end at a set age.
Can I convert term life to whole life without a medical exam?
Usually, yes, if your policy has a conversion option and you are inside the conversion period. You do not have to prove good health. The new premium is based on your age at conversion, so it will be higher than your term premium. Deadlines vary by policy, often a set number of years or an age such as 65 or 70.
Are life insurance payouts taxed?
Generally no. The IRS says proceeds paid because the insured person died are generally not taxable income, though any interest paid on them is. If you surrender a whole life policy for more than you paid in premiums, the gain is taxable.
