Guide to Insurance for Seniors in 2024

Health Insurance

Naturally, the older we get, the higher our chances are of needing some type of medical care. Although being an American resident or citizen has many benefits, health-care costs are not one of them. In fact, the United States is known as the most expensive healthcare system in the world.

On average, individuals 65 and older can expect to spend approximately $14,000 on health-care expenses annually, not including long-term care costs. Fortunately, there are several federal insurance programs for individuals over 65 that may help with these expenses.

Private Insurance vs. Medicare vs. Medicaid

Medicare includes two primary parts, Part A and Part B. American citizens over the age of 65 who have paid — or their spouse has paid — full-time Medicare taxes for at least 10 years are eligible for free Medicare Part A premiums:

• Part A: Covers hospital stays for less than 100 days at a skilled nursing facility or with home health care. Part A also covers hospice.
• Part B: Medicare insurance, also called Original Medicare, covers preventative care and medically necessary services. These include goods and services like ambulances, medical equipment, mental health, clinical research, and certain prescription drugs. On average, the monthly premiums for Part B cost $148.
• Medicare Advantage (Part C): An alternative to Medicare Part B, Medicare Part C –– commonly referred to as Medicare Advantage –– is offered through private companies that must provide seniors with at least the same coverage as Medicare Part B. Many of these plans include dental, vision, prescription, and other health-based coverages not offered by Medicare Part B. Depending on the private insurer and plan you select, you may be required to pay a monthly premium for Medicare Advantage.
• Medicare Part D: Medicare Part D covers prescriptions for a small to moderate premium, depending on your private insurer and plan.

Medicaid

This federal health coverage program for low-income adults, families, and people on disability is regulated by individual states, each with its own rules. Some seniors qualify for both Medicare and Medicaid. Unlike Medicare, Medicaid often provides coverage for nursing home care and other long-term services. Medicare often only covers these kinds of care for short periods, usually less than 100 days.

Private Insurance

Seniors still have the option to use private insurance. Retired older adults who are under 65 can find private insurance via the government’s Health Insurance Marketplace or buy a policy directly from their preferred provider. While private insurance is usually more expensive than Medicare, seniors who continue to work and whose employers contribute toward premiums may want to consider private insurance, especially individuals who have dependents.

Medigap

Medigap is an extra form of insurance seniors can purchase from private companies and works in conjunction with Medicare Part B. It covers certain costs that traditional Medicare does not, such as copays or coinsurance, deductibles, and medical care during international travel.

>> Related Article: What Is Medicaid Planning? How to Get Help Qualifying

Our Favorite Medigap Providers

While each Medigap provider has its pros and cons, I’ve listed three that I highly recommend below:

• Cigna
  • Wide range of plans to select from
  • Foreign travel coverage options
  • Household discount for additional enrollees
  • Skilled nursing facility coinsurance available
• Aetna
  • Offers all 10 supplemental Medicare plans
  • Enrollee is able to see any provider who accepts Medicare
  • Ability to keep coverage even if you move
  • Helpful smartphone app to manage your coverage
• Mutual of Omaha
  • Top-rated customer service
  • High-deductible plans available
  • International coverage available
  • No network restrictions

Other providers that offer notable Medigap plans include State Farm, AARP, Colonial Penn, UnitedHealthcare, Humana, and Anthem.

Dental Insurance for Seniors

When left untreated, many oral health issues can become serious medical concerns, and, unfortunately, seniors should be prepared for more frequent dental problems as they continue to age. Routine dental care may help reduce the long-term costs of more severe oral health issues, but even basic dental care can be expensive, and Medicare doesn’t cover dental. That’s where dental insurance for seniors comes into play.

Our Favorite Dental Insurance Providers

• Aetna Dental Insurance Review
• Cigna Dental Insurance Review
• Humana Dental Insurance Review
• Kaiser Dental Insurance Review

My top three dental insurance providers are: Aetna, Humana, and Cigna. Each of these companies offer Medicare Advantage with dental, stand-alone dental plans, and dental discount plans.

• Aetna
  • Network of over 372,000 providers
  • No waiting period for preventative care
  • 100 percent coverage for cleanings, exams, and routine x-rays
• Humana
  • $0 monthly premium options with Medicare Advantage
  • Plans range from routine-only to full coverage
  • Special pricing for veterans
• Cigna
  • 24/7 customer service and small claims management
  • Brighter Score tool rates providers by affordability and experience
  • No referral needed for specialist care

Vision Insurance

The prevalence of eye conditions and diseases increase as we get older and grow rapidly after age 75. Unfortunately, Original Medicare still does not offer vision benefits, despite the fact that a basic eye exam alone can cost upwards of $200 without insurance. Since our eyes are so vital to our safety and quality of life, I always recommend making sure you have some type of vision benefit. One price-efficient way to do this is to bundle and choose vision insurance with your dental plan. Here, you’ll find three of my top suggestions for combined vision and dental plans.

Our Favorite Vision Insurance Providers

• Aetna
  • Up to $500 of prescription eyewear per year on Aetna Medicare Advantage
  • Dental, hearing, and vision bundles available
  • No deductible or waiting period on Aetna Preferred
• DeltaVision
  • Monthly programs as low as $8
  • Average of 71 percent off retail prices
  • Up to 50 percent off Lasik surgery
• United Healthcare
  • Covers up to $150 on frames
  • $10 copay for a comprehensive eye exam
  • No cost for contacts from in-network providers

Life Insurance

Life insurance is a means of providing financial support for your loved ones upon your death. It can be used to pay off debts or simply make the lives of your beneficiaries easier. When you sign a life insurance contract, you agree to pay your premiums for a fixed or indefinite time, depending on your policy selection. The insurance company then promises to pay out the agreed-upon death benefit to your loved ones after you have passed.

Whole vs. Term Life Insurance

Term life insurance, commonly called pure life insurance, tends to cost less than whole life insurance and only lasts for a fixed period of time. Its purpose is to protect your family financially in case you pass away unexpectedly. When you purchase a policy, you select a term, like 10, 20, or 30 years. Over time, the payout and premium typically remain the same. If you die during the time frame you selected, your family receives the specified death benefit. Otherwise, you get nothing from having the plan, aside from maybe peace of mind.

Conversely, whole life insurance doesn’t expire, so the beneficiary is guaranteed the insurance payout after your passing. Premiums may increase with age based on the provider’s actuarial tables and rising end-of-life costs. Unfortunately, premiums for whole life insurance, also known as permanent or traditional life insurance, can be from six to 10 times the cost of term life insurance premiums. Whole life insurance also requires an investment portion, which functions as your policy’s cash value. This cash value slowly grows at a guaranteed rate in a tax-deferred account, and sometimes providers share these account dividends with policyholders. Some whole life providers require medical exams before initiating coverage.

How Much Does Life Insurance Cost?

Life insurance costs vary significantly based on the policy type you choose and your age, gender, hobbies, and health history. Term life insurance is generally more affordable than whole life insurance. However, it does carry the same benefits. Factors that increase your premiums’ price when you begin your policy include an increased age or declining health. Therefore, most people find it better to initiate life insurance policies while they are younger and in good health.

Death benefits are distributed to your beneficiary upon your death for all active life insurance policies.

Burial Insurance

Also known as final expense or funeral insurance, burial insurance policies are technically small life insurance plans, which exist so you can ensure your loved ones don’t have to pay the $5,500 to $9,500 median cost of funeral services upon your passing. Of course, your family can legally use the money it receives from your burial insurance payout for any expenses they choose. For example, if your burial is already covered, your children might take some extra time off work to spend with family or your spouse. Alternatively, your family might choose to use this money to fly in loved ones who can’t afford to get to your services or make a donation in your name to a cause you care about.

Monthly premiums average between $50 and $100, and burial insurance death benefits typically range from $5,000 to $20,000, with $10,000 being the most common. Policyholders who submit to a medical exam and are determined to be in good health receive more discounted policies. Individuals who prefer “no questions asked” policies should expect higher premiums. Premiums for burial insurance typically remain the same throughout your life, which you may prefer instead of selecting whole life insurance policies that often increase in price as you age.

Estate Planning

Estate planning involves determining how your assets will be managed following your death; specifically, how your possessions and finances should be distributed. Life insurance policies, which companies pay out following your death, are considered intangible assets. Due to estate planning’s delicate legal nature, policyholders typically enlist an estate law attorney’s help with these matters. Doing so is the best way to guarantee your family will follow your wishes once you have passed.

As you begin thinking about an estate plan, one of the first things you’ll want to do is take an inventory of all your tangible and intangible assets and then estimate each one’s financial value. Next, you should consider the needs of your heirs and make a record of them. Your third step involves establishing specific legal directives, so you’ll need to hire an attorney by the time you’re ready to start creating and signing documents regarding end-of-life wishes, trusts, etc.

Conclusion

Health, vision, dental, life, and burial insurance are crucial for aging Americans. While some insurance companies won’t renew policies for older adults or may begin charging outrageous premiums once a policyholder reaches age 65, there are still a plethora of companies and government programs that offer great coverage at affordable rates. In this guide, I have detailed some of the insurance providers I’ve found that offer seniors the best coverage, customer service, savings, and so on. I hope you’ve discovered some new ways to save money and protect the financial well-being of yourself and your loved ones.