Life insurance after 60: five things to think about

Evaluate your total debt

Any money you owe—on your house, your car or anything else—counts. If you die, your estate will have to pay all balances owing. To be sure your loved ones won’t have to face that burden, the best solution is to take out term life insurance, with the term in accordance to that of your loan.

Estimate your short- and medium-term financial needs to enjoy your retirement to the fullest

Thinking of buying an RV? Renovating the cottage?

Buying a condo so you can devote more time to your hobbies.

Consider all the aspects. If you want to have enough money on hand to live your dreams as well as have adequate coverage, buying insurance with a lower coverage amount (and therefore a lower premium) to simply meet the needs of your surviving spouse may be an attractive choice. 

Important! The premium for a permanent (aka “whole life”) insurance policy that you’ve had since you were young will almost surely be lower than that for a term life product that you purchase when older. With this type of permanent product, the premium never increases for as long as you hold the policy, regardless of your age. So you’re better off keeping your current policy than replacing it.

Assess your current and expected state of health

Your state of health affects your eligibility for insurance and the amount you’ll pay. Foresight is therefore vital. The best time to take out this type of insurance is when you’re in good health. Study your family and personal history to help you assess your risks. If you have known health issues and you already have a life insurance policy, you should definitely keep it.

If you don’t have life insurance and fear you’d be refused coverage because of your state of health, remember that guaranteed-issue life insurance is an option. Premiums are generally a bit higher, but you won’t be required to submit to a medical exam or answer a health questionnaire. You are sure to get coverage.

Protect your assets!

Do you have group life insurance through your employer? It will probably expire when you retire, so you’ll need to consider other options. But did you know you may be able to convert that group insurance to a personal policy? Find out from your human resources department or your insurer before you leave your job. There are usually significant benefits to this option, especially if you have existing health problems, are in poor health, or are suffering or recovering from a serious illness.

Consider your plans for after you’ve gone

There are many reasons, relating to your loved ones, for holding onto or purchasing life insurance after you retire.

• Funeral expenses are rising fast. Some people are eligible for a government death benefit, but the estate must pay tax on it. Otherwise, the funeral bill must be paid by family members, but if your insurance money is there, they won’t have to dip into their savings.
• Like many parents, you may want to bequeath property you worked so hard to acquire to your children or grandchildren. Your insurance money will enable your heirs to pay the estate tax without having to liquidate any of the property you leave to them.
• If you want to leave money in your will, for example to pay for your grandchildren’s university education or to donate to charity, life insurance will help you maximize the amount of your bequest.

Analyze and evaluate existing life insurance

Once you have all the necessary information on hand, see whether your current policy fulfils your expectations and is right for your eventual lifestyle, and whether you have enough savings to pay for all your cherished plans. If not, you can modify your policy, or choose a product that complements your current one. Whatever your situation may be, feel free to seek out an expert for advice.