So, if you’re retired and living on fixed income sources, do you still need Life insurance?

Although your dependents may no longer count on your income for their living expenses, there are other reasons for having—or for keeping—this essential financial protection. These include:

Covering final expenses. Today, the average cost of a funeral is over $8,000¹. Add to that costs like medical and hospice bills, settling an estate, and paying off outstanding debt.

Replenishing savings. Medical and long term care costs can add up quickly. If unforeseen health issues force you to dip into your retirement savings, Life insurance proceeds can help your loved ones maintain the standard of living you had planned for in retirement.

Replacing retirement income. Pension income, in many cases, is drastically reduced or may even cease altogether when a retiree dies. Life insurance can help replace some of that income for a surviving spouse.

Paying estate taxes. Estate taxes can erode a significant portion of a decedent’s assets. Life insurance proceeds can be used to help fund these tax obligations.

Leaving a legacy. Even if there will be no substantial financial loss experienced upon your death, Life insurance can be a way to leave a considerable amount to a charitable cause, or to children or other family members.

If you are just starting to consider Life insurance at retirement age, a small Term Life insurance policy that could cover your final expenses might suffice. If you anticipate a greater loss upon your death, you might consider a Term Life or whole life policy that could provide a more significant amount for your spouse’s ongoing needs. Regardless of which option you choose, if you’re in the market for Life insurance after retirement, don’t wait to apply. Rates increase with each year you age, and as you become older, the year-over-year difference can be substantial.

¹ Bankrate.com, “Average Funeral Cost,” July 2021.
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