Life insurance is often sold as a financial safety net, but once you reach retirement age, the question becomes more complicated. After 65, many people have already paid off their mortgage, raised their children, and saved for retirement. So, do you really need life insurance at this stage, or is it just another product agents push to earn a commission? The truth is, the answer depends on your financial situation, family needs, and goals. Let’s explore when life insurance still makes sense after 65—and when it might not.
1. Covering Final Expenses
One of the most common reasons people keep life insurance after 65 is to cover funeral and burial costs. Funerals can easily cost between $7,000 and $12,000, which may create a burden for surviving family members. A small life insurance policy can relieve loved ones from worrying about how to pay for these arrangements. This type of coverage is often called “final expense insurance” or “burial insurance.” For those without significant savings, it can be a thoughtful financial tool.
2. Supporting a Spouse with Limited Income
If your spouse depends on your pension, Social Security, or retirement income, your death could drastically reduce their financial stability. Life insurance can provide an income replacement that helps them maintain their standard of living. This is especially true if your spouse will lose access to part of your pension or survivor benefits. Even a modest policy can bridge the financial gap and prevent hardship. For couples with unequal retirement savings, this protection can be invaluable.
3. Leaving a Legacy for Children or Grandchildren
Some retirees keep life insurance as a way to pass on wealth without dipping into retirement savings. A policy can ensure children or grandchildren receive an inheritance, even if other assets are limited. This can also be an efficient way to leave behind money for education or financial security. Since life insurance proceeds are generally tax-free, it may be more effective than leaving cash in a will. For many, this turns insurance into a legacy tool rather than just a safety net.
4. Paying Off Remaining Debts
If you still have a mortgage, car loan, or credit card debt, life insurance can prevent these obligations from falling on your family. For retirees carrying significant debt, this type of protection may be necessary. Without it, surviving relatives might need to liquidate assets or make difficult financial decisions. A life insurance payout can eliminate those burdens immediately. This peace of mind is often worth the premium costs, even later in life.
5. Considering Your Current Financial Strength
Not everyone needs life insurance after 65, especially if you’ve built strong savings and assets. If you have a paid-off home, a healthy retirement fund, and no dependents, a policy may not add real value. In this case, paying premiums might just drain resources better used elsewhere. Many retirees find they can self-insure by using their own savings to cover final expenses and support loved ones. It all comes down to whether the cost outweighs the benefit.
6. Recognizing the Cost of Coverage After 65
One major drawback of buying or keeping life insurance after 65 is the price. Premiums rise sharply with age, and some policies may be cost-prohibitive on a fixed income. For example, a $50,000 policy could cost hundreds of dollars a month depending on health and age. Seniors with medical conditions may face even higher costs—or be denied coverage entirely. Understanding this trade-off is crucial before committing to a new policy.
7. Watching Out for Aggressive Sales Tactics
Insurance companies know retirees often worry about leaving loved ones financially vulnerable. Unfortunately, this fear can be used as a sales tactic to push policies you may not actually need. Some agents focus more on commissions than your best interests, recommending expensive permanent insurance when a small term or final expense plan would suffice. Always evaluate whether the policy fits your actual financial situation. Seeking advice from a fee-only financial advisor can help you avoid unnecessary purchases.
8. Exploring Alternatives to Life Insurance
Life insurance isn’t the only way to protect loved ones after 65. Building an emergency fund, reducing debts, or setting aside money in a payable-on-death account may serve the same purpose. Prepaying funeral expenses can also eliminate a major end-of-life cost. For those with strong assets, these alternatives often make more sense than ongoing premium payments. Exploring all your options ensures you’re not overspending on insurance you don’t need.
The Bottom Line: Insurance or Sales Pitch?
Life insurance after 65 can be either a smart financial tool or an unnecessary expense. It makes sense if you have dependents, lingering debts, or limited savings. On the other hand, if you’re financially secure and debt-free, it might just be another sales pitch aimed at your retirement fears. The key is evaluating your personal situation honestly before making a decision. With the right guidance, you can avoid overspending while still protecting the people who matter most.
Do you think life insurance after 65 is a wise investment or just a costly product? Share your perspective in the comments below.
Read More
What’s the Real Reason Some Banks Are Denying Retirees Service?
10 Tech Features You’re Paying For—But Will Never Use in Retirement
Teri Monroe started her career in communications working for local government and nonprofits. Today, she is a freelance finance and lifestyle writer and small business owner. In her spare time, she loves golfing with her husband, taking her dog Milo on long walks, and playing pickleball with friends.
Read the full article here
