Everyone’s retirement looks a little bit different. In the United States, people reach full retirement age in their late 60s, but many work longer.

No matter what age you officially retire, your finances, family, health, and day-to-day life can change greatly during retirement. That’s why preparing for those changes in your financial planning is essential. No matter your situation, life insurance for retirees can offer you the peace of mind that your family’s finances are protected so you can enjoy your retirement to its fullest.

Why would a retiree get life insurance?

If your employer-provided life insurance policy has ended or a term life policy has lapsed, you may wonder whether you need life insurance after retirement. Each person’s financial needs differ, but there are a few reasons you might choose to buy life insurance in retirement. If any loved ones will experience financial struggle once you’ve passed away or if you have any inheritable debts, life insurance can help you care for your loved ones. You should also consider whether you have enough saved for your end-of-life expenses and what kind of financial legacy you want to leave behind for your family.

Protect loved ones 

If your spouse or any family members depend on your income, a life insurance policy can help keep them financially secure. Your death benefit can also give your spouse more financial security to enjoy retirement. Expenses like rent or mortgage payments can eat up one’s retirement savings. Other costs your spouse might face after they retire include healthcare, travel, and daily living costs. With a life insurance policy, you can help your loved ones meet their needs or make the most of retirement even after you’re gone.

Take care of debts 

Unfortunately, your loved ones might have to manage some remaining debts when you pass away. Your life insurance payout could alleviate that burden by covering mortgages, outstanding medical or long-term care bills, credit card debt, and more. That way, you can take solace in knowing your family won’t have to face additional financial challenges during an already painful time.

Pay for funeral costs or other end-of-life expenses

Even if you don’t anticipate leaving behind any debt, your life insurance policy can protect your loved ones from sudden expenses. For example, iIn the United States, the average funeral costs around $9000, a staggering amount for many families.

Fortunately, final expense insurance can cover end-of-life costs like funerals, burials, and outstanding medical bills. While these policies are relatively small, they can significantly impact your loved ones by allowing them to focus on grieving and healing after you’ve passed away instead of worrying about funeral costs.

Leave a legacy

Finally, a life insurance policy can help you support the people and causes you value, even after you’ve passed away. Unlike an estate, which debts and taxes can diminish, your entire life insurance payout goes directly to your beneficiaries. That makes life insurance a great way to leave a legacy. Your death benefit can help loved ones pay for their education or first home, travel the world, or build the future they want. Alternatively, you can also make a non-profit organization your beneficiary. If there’s a cause close to your heart, your life insurance policy can help you leave a lasting impact.

How long do you need life insurance after you retire?

The best life insurance for your retirement depends on your social, family, health, and financial circumstances. The two overarching types of life insurance coverage are permanent, which lasts indefinitely, and term life, which lasts for a fixed period.

As your family changes, life insurance should offer a financial safety net as your children navigate milestones like marriage, college, and raising their own children. If that’s the case, and you won’t have any big debts after you pass away, a term life plan might make the most sense for you. For example, if you’re a retiree who still has children living at home, you can choose a 10-year or 20-year policy term that will expire after your youngest child reaches adulthood.

On the other hand, you might be concerned about covering funeral costs and debts, caring for a spouse or other loved one, or leaving a financial legacy. A permanent policy might be a better fit if those are your priorities. That way, you can be sure your beneficiaries will have financial support after you’re gone.

Which life insurance options are available for retired people?

Some insurers like Fidelity Life have designed policies specifically for older adults. As you decide on life insurance, keep in mind the amount of coverage you might need and how long you might need it. In addition, think about your financial circumstances in retirement, your family’s needs, and your eligibility for different types of senior life insurance plans.

Term life insurance

Term life insurance offers substantial coverage for a period you decide before applying. Premiums for term life insurance tend to be lower than permanent life plans for similar death benefits.

Fidelity Life offers older adults between 50 and 70 RAPIDecision® Senior Life Term policies. Applicants can choose between 10-year, 20-year, and 30-year plans. After the term concludes, you can renew coverage as needed up to age 95. Term life plans are affordable and can provide significant coverage when your family needs it most.

Permanent life insurance

Permanent life insurance comes at a higher premium than term life because it provides coverage through the end of one’s life. Unlike term life policies, permanent policies accrue cash value over time. Fidelity Life offers the RAPIDecision® Senior Whole Life policy for adults between 50 and 85, making it a good fit for many retirees. Partial coverage under this policy begins immediately, and if you pass away after year three, beneficiaries receive the full death benefit. You can borrow against the cash value of this policy during your life if you need to supplement your retirement savings or cover other unforeseen expenses.

Final expense life insurance

Final expense life insurance, also known as funeral or burial insurance, is an accessible life insurance option that provides a smaller death benefit. Beneficiaries can use the coverage however they see fit, but it’s primarily designed for end-of-life expenses like funerals, celebrations of life, and religious or spiritual ceremonies.

Fidelity Life offers two final expense insurance options. RAPIDecision® Final Expense insurance requires applicants to complete a short medical questionnaire as part of the application process and provides up to $40,000 in coverage. RAPIDecision® Guaranteed Issue offers up to $25,000 in coverage and does not require any health information. Both policies have quick approval times and coverage that begins right away.

Do retirees need to take a medical exam to get life insurance?

Each life insurance policy has its own medical exam requirements. Medical exams can often help you secure lower premiums if you’re in relatively good health. However, most policies geared toward older adults do not require a medical exam. Instead, the application may include medical questions about any history of serious illness or injury. If you believe your medical background might disqualify you from coverage, you can opt for a RAPIDecision® Guaranteed Issue policy instead. These policies do not require any health information, and you should qualify for coverage as long as you meet the age requirements. However, a guaranteed issue policy typically has higher premiums than other policies.

How much does life insurance cost for a retiree?

While policies become more expensive as you age, gender, lifestyle, and overall health also determine costs. The type of policy you choose will also influence prices, with term life generally being the least expensive and guaranteed issue being the most. However, getting a quote online or contacting a licensed insurance agent via phone is the best way to estimate your costs.

How to choose the right life insurance in retirement

Keep your finances and needs in mind as you pick the best life insurance for your retirement. Consider who depends on you financially and what expenses might remain when you’re gone. The right life insurance policy is the one that provides the coverage you need without breaking your budget. Reach out to one of our licensed insurance agents via phone or get a quote online to get started.