Life Insurance for Retirees: Options, Strategies, and Tips
If you are approaching retirement or have recently retired, your finances are probably your key focus right now.
You want to make sure all of your investments and income sources are in order so you can enjoy your golden years, afford the necessary medical care, and leave money behind for your loved ones.
Every day, JRC Insurance Group helps countless clients in their 60s and 70s find affordable life insurance. In this article, we’ll outline the options that might be available to you, along with different use cases and tips to help you make the most of your coverage.
Here’s what we'll cover in this post:Quick Article Guide
Types of Life Insurance
If you’re new to life insurance, don’t let the jargon scare you away. Remember, you’re putting the time into finding a policy now to protect your family from financial hardship after you pass away. Here’s a quick guide to help you understand the three main types of life insurance policies you’ll come across:
Term Life
Term life insurance is the simplest, and usually, the most affordable type of life insurance available. It provides tax-free money for your spouse or heirs to cover income loss, burial costs, and final expenses in the event of your death. Term life insurance offers coverage for a set period of time – this period of time is referred to as a “term”.
During the term of your policy, your life insurance rates cannot increase and your coverage cannot decrease, regardless of changes to your health. Most companies offer terms for 10, 15, 20, 25 or 30 years depending on the age of the applicant.
Whole Life
True to its name, whole life insurance usually provides “permanent coverage,” that is designed to last for your entire lifetime, rather than a set number of years.
Whole life insurance is often expensive because it provides a fixed premium until age 80 or later. In addition, many whole life insurance policies do not require a health exam so the insurance companies must charge higher rates to safeguard their margins.
Some whole life insurance policies also offer an additional feature called cash accumulation, which is an interest-bearing account that (theoretically) builds a return over time. But beware, cash accumulation is not a money tree; it takes many years to build a sizeable amount of money and life every other form investment, it comes with a market risk. If you’re considering a whole life insurance policy this article on cash accumulation is an absolute must-read.
Universal Life
Universal life insurance is another type of permanent life insurance that usually comes with cash accumulation. However, since many investment-backed, or “non-guaranteed,” universal life policies fail to perform well, we usually recommend guaranteed universal life (GUL) over non-guaranteed options.
Guaranteed universal life functions similarly to term life, except you lock in coverage to a specific age rather than for a set number of years. Compared to whole life insurance, guaranteed universal life insurance is less expensive and it can be customized to provide coverage to the age of your choice: 90, 95, 100, 105, 110, or even 121. See a complete comparison between non-guaranteed and guaranteed universal life insurance here.
Leaving an Inheritance with Life Insurance
Guaranteed universal life insurance can be a great way to lock in coverage that you will not outlive. This is a common concern for many retirees, because they want to be sure they’re able to leave behind at least a reasonable sum of money to their heirs.
GUL policies are often called “term to 90,” “term to 95,” or “term to 100” life insurance because they work just like a term policy, with rates and coverage guaranteed to a specific age. In quite a few cases, it even turns out that a GUL policy offers longer coverage and greater savings than term life insurance.
The tables below show average rates for a male in excellent health seeking “lifetime” coverage or a GUL policy to age 90, 95, or 100. You may notice that at age 75, you could buy a 15-year term life policy with a $500,000 death benefit for roughly $1,170.34 Or, you could lock in the same coverage up to age 95 with a GUL policy that would cost roughly $1,494.00.
Monthly Rates for a MALE in Excellent Health - To Age 90
| Current Age | $100k of Coverage | $250k of Coverage | $500k of Coverage |
| 70 | $198.93 | $439.05 | $851.28 |
| 71 | $211.79 | $468.09 | $909.08 |
| 72 | $224.65 | $497.12 | $966.79 |
| 73 | $237.53 | $526.19 | $1,024.50 |
| 74 | $248.12 | $550.14 | $1,072.14 |
| 75 | $257.08 | $570.39 | $1,112.52 |
| 76 | $324.00 | $797.50 | $1,590.00 |
| 77 | $338.00 | $835.00 | $1,665.00 |
| 78 | $373.00 | $922.50 | $1,840.00 |
| 79 | $391.00 | $967.50 | $1,925.00 |
*Displayed monthly rates are accurate as of 12/30/22 and are provided for illustration only.
Monthly Rates for a MALE in Excellent Health - To Age 95
| Current Age | $100k of Coverage | $250k of Coverage | $500k of Coverage |
| 70 | $240.80 | $535.58 | $1,062.22 |
| 71 | $258.00 | $589.50 | $1,172.07 |
| 72 | $274.40 | $623.72 | $1,241.00 |
| 73 | $292.20 | $660.75 | $1,315.50 |
| 74 | $312.20 | $702.50 | $1,398.50 |
| 75 | $333.27 | $750.25 | $1,494.00 |
| 76 | $405.00 | $1,002.50 | $2,000.00 |
| 77 | $429.00 | $1,062.50 | $2,120.00 |
| 78 | $472.00 | $1,172.50 | $2,335.00 |
| 79 | $503.00 | $1,250.00 | $2,495.00 |
*Displayed monthly rates are accurate as of 12/30/22 and are provided for illustration only.
Monthly Rates for a MALE in Excellent Health - To Age 100
| Current Age | $100k of Coverage | $250k of Coverage | $500k of Coverage |
| 70 | $262.50 | $601.00 | $1,195.50 |
| 71 | $280.90 | $641.00 | $1,275.00 |
| 72 | $299.70 | $682.00 | $1,357.00 |
| 73 | $320.60 | $727.75 | $1,448.50 |
| 74 | $342.80 | $776.75 | $1,546.50 |
| 75 | $367.30 | $831.00 | $1,654.50 |
| 76 | $440.00 | $1,072.00 | $2,120.00 |
| 77 | $469.00 | $1,162.50 | $2,320.00 |
| 78 | $517.00 | $1,282.50 | $2,560.00 |
| 79 | $554.00 | $1,377.50 | $2,750.00 |
*Displayed monthly rates are accurate as of 12/30/22 and are provided for illustration only.
Creating the Rewarding Retirement You Deserve
With a GUL policy lasting to age 90 or later, you can spend your retirement savings and still leave a legacy, tax-free. The article in the link explains how you can use GUL to live in the moment and be less frugal—all while leaving behind money that is completely tax-free, compared to any savings you were to pass down that would be subject to taxes. The government does not tax a life insurance payout because the policyholder had already paid the premiums with taxable income.
Mitigating Medical Costs with a Long-Term Care Rider
According to the LongTermCare.gov, someone turning age 65 today has nearly a 70% likelihood of needing some form of long-term care. When you consider that the 2021 average cost for a private room in a nursing facility—usually not covered by Medicare or health insurance—was $9,033.75 per month, it becomes clear that long-term care expenses can be difficult for a family to keep up with and can set the stage for financial struggles after the elderly family member dies.
Long-term care insurance is often purchased as an add-on, or “rider” to a life insurance policy. A long-term care rider covers the daily care needs of the elderly, such as bathing, grooming, dressing, and eating and provides a daily benefit amount decided by and paid to the family. This might be $150, $250, $300—whatever fits your needs and budget. Learn more about long-term care insurance and long-term care riders here.
Life Insurance for Pension Maximization
Are you among the lucky Americans with a pension plan? Consider using life insurance as a supplement to allow you to accept the full benefit rather than the reduced spousal benefit.
Life insurance can provide the same protection for your spouse that you seek in the spousal benefit, and in many cases, the numbers are favorable in comparing the cost of a life insurance policy vs. the amount of money left on the table for a pension with surviving spouse benefits. Check out our guide to pension maximization for an in-depth look at this strategy.
Life Insurance for Estate Planning
Currently, the federal estate tax exemption is at an all-time high of $12,920,000 per individual. However, in 2026 this number will revert to approximately $6,000,000. If your estate is worth more than $6,000,000, or if you live in state with estate taxes, a life insurance policy could help you reduce estate taxes on the assets you intend to leave behind.
Life insurance is often purchased by high-net-worth families to protect their estate and minimize the tax burden their hiers will face. Our independent agency offers both individual policies and lower cost "second to die" covererage that pays a death benefit when both spouses pass away. To give you an idea of how thorough we are, here’s a real-life example:
We recently worked with an older gentleman who uses life insurance to effectively shield his two children from estate taxes down the road. He was looking to buy a third second-to-die policy. By shopping 63 top insurance carriers, we were able to help him funnel the cash value from his two second-to-die cash accumulation accounts toward one policy.
This allowed him not only to condense his life insurance from a prospective three plans down to one, but also secure 15% more coverage and save roughly $24,000 per year in premiums—all at zero extra cost. Now, he pays no monthly premiums and has complete peace of mind. He was even able to put the residual money he was going to spend on a third policy into a trust fund instead.
Are you looking to involve life insurance in your estate planning? Be sure to avoid these 7 costly errors.
Covering Burial Costs and Final Expenses
If you already have money to leave behind to your spouse or heirs, we might recommend a minimalist policy to cover final expenses and burial costs. Even if your legacy is relatively large, having a policy to cover the cost of your funeral will help to make your loved ones’ lives a little easier through a time of grief.
Final expense policies carry death benefits between $5,000 and $25,000. Just like all other life insurance policies, the money is paid to your beneficiaries tax-free, in a lump sum if they wish, or in monthly installments. The two main things to look for in a final expense policy are a fixed rate and coverage for your entire lifetime. Just like everything else we’ve covered in this article, we have plenty of insight to share with you on final expense insurance.
How to Shop the Market
We are always happy to share tips to help you succeed in your search for the right life insurance policy, but the easiest way to find and compare options is to work directly with us. As independent agents, we’re able to offer life insurance from 63 top-rated insurers, and many providers even cater specifically to retirees.
Make shopping for life insurance easy on yourself and call JRC at 855-247-9555. If you want to jumpstart the process, you can even get a free quote online! Just click the button below, and we’ll respond with accurate quotes gathered from dozens of top-rated insurance companies.
Clifford Pendell
Managing Partner and Co-founder
Cliff is a licensed life insurance agent and one of the owners of JRC Insurance Group. He has helped thousands of families of businesses with their life insurance needs since 2012 and specializes with applicants who are less than perfect health. In his spare time he enjoys spending time with family, traveling, and the great outdoors.
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