Choosing a life insurance policy in retirement is a very different experience than when you were 40.
You’re not planning for a new mortgage or your kids’ college. You’re focused on something more permanent: protecting your loved ones from final expenses and leaving a stress-free legacy.
But what kind of policy is right for a senior? How much do you really need? This simple guide will help you determine how much coverage you need, find the right type of policy, and get an affordable price
Key Takeaways
- Focus on Your Goal: As a senior, your goal isn’t “income replacement”; it’s “final expense” coverage.
- Permanent is Better: A “Final Expense” (Whole Life) policy is permanent, and the rate is locked in for life. A “Term” policy expires and gets very expensive to renew.
- No-Exam is Standard: Most seniors can get coverage without a medical exam, often in minutes.
- Coverage is Affordable: A $15,000 policy is often all you need, and it can be very affordable.
How Does Life Insurance for a Senior Work?
Life insurance is a simple contract. You pay a monthly premium to keep the policy active, and in return, the insurance company pays a lump-sum, tax-free check (called a “death benefit”) to your beneficiaries when you pass away.
For seniors, this tax-free money is most commonly used to cover immediate, and often unexpected, costs, such as:
- Funeral and burial expenses
- Final medical bills or co-pays
- Small, lingering debts (like a credit card balance)
Do I Really Need Life Insurance in Retirement?
This is the most important question to ask. For many seniors, the answer is a clear “yes,” but not for the reasons you might think. It’s not about replacing your income; it’s about protecting your savings.
This simple table can help you see which path fits your situation.
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You SHOULD Consider a Policy If...
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You May NOT Need a Policy If...
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You want to cover your own funeral, so your family doesn't have to.
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You have no one who would be financially impacted by your passing.
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Your savings are for your spouse's future, and you don't want them depleted by funeral bills.
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You'd like to leave a small, tax-free gift to a child or grandchild.
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The Two Main Types of Policies (And the Best Choice for Seniors)
There are two main types of life insurance, but for a senior, one is almost always the wrong tool for the job.
1. Term Life Insurance (Often the Wrong Tool for Seniors) Term life is popular because it’s cheap, but it is temporary. It covers you for a set period, like 20 or 30 years. As a senior, this is likely the wrong choice because that 20- or 30-year policy you bought in your 40s is probably about to expire, and renewing it at age 65+ is extremely expensive.
2. Permanent Life Insurance (The Right Tool for Seniors) This type of policy is designed to last your entire life. It never expires, and the premium is locked in forever—it can never increase, which is perfect for a senior on a fixed income.
The best type of permanent policy for most seniors is called Final Expense Insurance (or “Burial Insurance”). This is simply a small whole life policy designed for one job: to cover your final expenses.
At a Glance: Term vs. Final Expense
- Policy Goal:
- Term Life: Temporary (like a mortgage)
- Final Expense: Permanent (like a funeral)
- How it Lasts:
- Term Life: Expires (e.g., after 10 or 20 years)
- Final Expense: Never Expires
- Your Premium:
- Term Life: Skyrockets at renewal
- Final Expense: Locked in for life; never increases
The "No-Exam" Option: The Easiest Path for Seniors
In the past, getting a policy required a full medical exam. Today, this is no longer necessary. You have two easy, no-exam options:
- Simplified Issue: You answer a few health questions on the application (but no exam). If you are in average health, you can get approved in minutes for a low rate and immediate coverage.
- Guaranteed Issue: You answer zero health questions. Approval is guaranteed, regardless of your health history. This is the perfect solution for anyone who has been turned down before.
How Much Coverage Do I Actually Need?
This is the best part: you are no longer trying to replace 30 years of salary. That old policy was designed to pay off a 30-year mortgage and replace an income.
Your new goal is different. It’s not about replacing income; it’s about protecting your savings. The goal is to cover your final bills so your family doesn’t have to touch their own savings or use a credit card.
So, how do you find your perfect number? It’s a simple, 3-step calculation.
Step 1: The Main Expense (The Funeral) Start with the primary cost, the average funeral with a burial can be between $8,000 and $12,000. It’s always smart to aim for the high end to be safe.
- Your Number, Step 1: $12,000
Step 2: The “Other” Final Bills This is the part many people forget. Think about any other small, lingering debts you don’t want to pass on to your family. Be honest:
- Final medical co-pays or hospital bills?
- A lingering credit card balance?
- A small car loan?
- Let’s say, for this example, this adds up to $3,000.
Step 3: The “Peace of Mind” Buffer This is the most important part. After the bills are paid, do you want to leave a little extra? This buffer can be a final gift, cover an unexpected travel cost for a loved one, or simply ensure there’s more than enough. It’s the “peace of mind” part of the plan.
- A common buffer is $5,000.
Now, let’s add it up: $12,000 (Funeral) + $3,000 (Bills) + $5,000 (Peace of Mind) = **$20,000 Total**
You can see how for most seniors, a policy between $10,000 and $25,000 is the perfect amount. It’s not a random number; it’s the right number. It’s enough to cover the funeral, pay every final bill, and leave a little extra, ensuring your family feels your love, not a financial burden.
Find Your "Peace of Mind" Number
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A Feature You Should Look For: Accelerated Death Benefit
This is a powerful “living benefit” that is often included for free. This rider allows you to access a large portion of your own death benefit while you are still alive if you are diagnosed with a terminal illness. This money can be used to pay for medical care or get your affairs in order.
How Much Does It Cost?
The most important factor is that your rate is based on your age when you apply. The younger you are when you get your policy, the lower your locked-in rate will be.
For example, a $15,000 final expense policy for a healthy, non-smoking 65-year-old woman can often be found for between $50 and $75 per month. That’s a fixed, predictable cost that never increases.
How to Buy Your Policy
Once you know what you need, the process is simple and can often be done right over the phone or online in under 30 minutes. Here’s a breakdown of what to expect.
1. Get Multiple Quotes (The Smart Way)
We recommend getting quotes from a handful of companies to find the best deal. Prices for the exact same coverage can vary significantly between insurers.
The easiest way to do this is to work with a trusted, independent broker. Here’s the key difference:
- A “captive agent” (who works for one big, specific company) can only sell you their one product.
- An independent broker (like Sagewise) works for you. Their job is to compare 10–15 top-rated companies at once to find the absolute best plan and price for your specific age and health situation.
2. Compare the Companies (Not Just the Price)
The cheapest policy isn’t always the best. This is a promise your family will rely on, so you want a company that is reliable and easy to work with.
When you have your quotes, look at these three things:
- Price: Is the premium affordable and guaranteed to never increase?
- Financial Strength: This is a “grade” that shows if the company has the money to pay its claims. Look for a rating of “A” or higher from an independent agency like AM Best. This ensures the company is secure.
- Customer Service: How easy is it to pay your bill? More importantly, how does the company treat beneficiaries? You are buying this to make your family’s life easier, so choose a company with a good reputation for paying claims quickly.
3. Finish Your Application (Honestly and Accurately)
The application itself is fast, often just a few minutes over the phone or online. To make it go smoothly, it’s helpful to have this information handy:
- Your doctor’s name and contact information.
- A list of your current medications.
- The full legal name(s) and date(s) of birth of your beneficiaries.
Most importantly, always be honest on your application, especially about your health. If an insurer finds out that a serious condition was intentionally hidden, they have the right (usually within the first two years of the policy) to contest the policy or deny the claim.
Being accurate and honest on your application is the #1 way to guarantee that your family will have a smooth, fast, and unquestioned payout.
You're Approved. You're Not Done. (The 3 Final Steps)
Getting your policy approved is a huge step, but you are not quite finished. Your policy is just a piece of paper until you complete these three final, critical steps. This is how you turn your policy into a real, “Peace of Mind” plan.
1. Formally Designate Your Beneficiary (This is Critical) This is the single most important step. Your beneficiary is the person who gets the money.
- Warning: The person you name on this form overrides your will. If your will says “my daughter” but your policy names “my ex-spouse,” your ex-spouse gets the money.
- What to do: Get the beneficiary form from your insurer. Name a specific adult as your “Primary Beneficiary” (e.g., “Jane A. Smith”). Then, always name a “Contingent Beneficiary” (a backup, e.g., “Robert J. Smith”) in case your primary beneficiary is not able to claim the policy.
2. Tell Your Beneficiary (Don’t Make it a Secret) A policy your family can’t find is worthless. This is a common and tragic mistake.
- What to do: Take your beneficiary (e.g., your adult child) aside. Tell them: “I’ve taken care of my final expenses. It’s a gift to you, so you don’t have to worry. The company is [Company Name], and you are the beneficiary. The policy documents are [Location].”
3. Create a “Peace of Mind” Folder This makes Step 2 even easier. Get a simple folder, label it clearly, and put it with your other important documents.
- What to include:
- The policy’s “Declarations Page” (the first page with the company name, policy number, and coverage amount).
- The main phone number for the insurance company’s “Claims” department.
- A copy of your agent’s or broker’s business card.
- What to do: Tell your beneficiary and the executor of your will exactly where this folder is.
- What to include:
Stop Wasting Money. Get the Right Insurance.
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Frequently Asked Questions (FAQ)
“Final expense” is a type of “whole life” policy. “Whole life” is the broad category. “Final expense” just refers to a smaller whole life policy (e.g., $15,000) that is designed to be simple, affordable, and easy for a senior to qualify for.
This is a loving gesture, but it can be a financial trap. It forces your children to use their savings or a credit card at a very stressful time. A final expense policy is a small, fixed monthly payment you make, so that your kids get a tax-free check to handle everything without any financial burden.
This depends on the plan. A “Simplified Issue” plan (with health questions) provides full, 100% coverage from the very first day. A “Guaranteed Issue” plan (with no health questions) typically has a 2-year “graded benefit,”.
This is a common and important worry. All policies have a “grace period,” which is usually 30 days. This means that if you miss a payment, your policy will not be immediately canceled. You have a window to “catch up” without losing your coverage.
This is a very smart question. In some cases, it is possible. However, you are not buying an “investment”; you are buying “protection.” A final expense policy is a safety net. Its purpose is the guarantee that the money is there for your family, whether you pass away tomorrow or in 30 years. You are paying for the peace of mind that the bill is 100% covered.
