How Much Life Insurance Do I Need If I Am Retired With No Children?
For most people, the answer is yes.
In many cases, people do still need life insurance coverage after retirement. Those with employer funded policies often wonder, “Do you lose life insurance when you retire?”
Others may want to know, “Is life insurance a good investment for retirement?” Again, the answer is yes. For many people, life insurance functions as a good investment tool for retirement, especially if you invest in a permanent policy at a young age.
Even for those who are retired with no children, there still may be a few reasons that you should consider life insurance coverage - even it's just a small amount.
Here’s what we'll cover in this post:
Quick Article Guide
Here’s what we'll cover in this post:
Why Do I Need Life Insurance If I Am Retired and Have No Children?
For the most part, the reasons people with no children in retirement need life insurance are the same as those who have children. The only difference is that they may need less coverage, and not have to plan for college tuition/financial dependency when they are gone.
1. Long Term Care
Roughly 70% of Americans need some form of long-term care in their lifetime. This can be an incredibly large financial burden, regardless of how comprehensive the care is. The average cost of this care in the United States is between $6,000 and $8,000 per month.
Not everyone is prepared for this. If you don't have another financial avenue through which to cover long-term care, life insurance with a specific Long-Term Care Rider might be the perfect solution.
Want to learn more about planning for long-term care? These comprehensive resources can guide you through the process, with everything you need to know:
2. Burial and Final Expense Costs
No one wants to leave their family, brothers, sisters, spouse, or extended family with unnecessary debt when they pass. And yet, that is what happens to many people who fail to take out some sort of coverage for their burial and funeral costs.
The average funeral in America is around $12,000. Not planning for this can make for excess debts on behalf of your family, which can be a burden. Burial life insurance policies are designed specifically for this, or you can always factor these costs directly into your life insurance coverage.
Looking to learn more about burial insurance and how much it costs? Here are some helpful guides:
3. Supporting Your Spouse
If you are married, you still have your spouse to consider. If you are the sole provider for your spouse, consider what would happen in the event you passed away before them.
Even after retirement, there are still financial needs that should be accounted for. Purchasing a life insurance policy for retirement can give you peace of mind, knowing your spouse is financially safe in the event of your death.
4. Creating An Estate or Trust
Creating an estate or trust is one of the best ways to make sure that your wealth and assets are distributed properly after your death. They are also an important tool for protecting your remaining family from estate taxes.
Purchasing a permanent life insurance policy is one way that you can easily create an unbreakable trust in order to protect businesses, assets, and wealth.
Have assets to protect in retirement? Life insurance may be the perfect tool. Learn more about estate and trust creation using life insurance with these helpful resources:
5. Covering Remaining Debts
If you have any remaining debt, which plenty of people do after retirement, it is important to consider how this will be paid for in the event of your death. Life insurance policies can be used to handle remaining debts, and protect your family from inheriting it.
Any remaining debt you have when you die, whether a mortgage, car loan, credit card debts, etc… all have to be paid for in some way or another. Without a way to do this, the financial burden falls on remaining family members.
6. Leaving A Legacy
Perhaps you want to leave a legacy behind when you are gone. You can choose to take out a life insurance policy and select a nonprofit organization or a charity as your beneficiary. Life insurance allows you to leave behind a very powerful legacy by helping to support a cause that is near and dear to your heart.
Or, you can also help nieces, nephews, or extended family members to get additional coverage by purchasing a life insurance policy that provides for them in the event of your death. For example, some companies allow you to purchase child’s life insurance for family members. Policies like this can then become converted or used by the children once they reach adulthood.
7. Pension Replacement and Maximization
In retirement, sometimes pensions do not work as planned, or do not go as far as you may have thought. In these cases, there is a strong need to supplement or maximize your pension benefits.
This is one of the reasons why retired people should consider life insurance coverage. There are plenty of ways that you can use life insurance to help supplement your pension plan, especially if you begin planning it from a young age.
Want to learn more about using life insurance to maximize your pension benefits? We wrote these helpful guides just for you:
8. Supplement Employer Life Insurance Coverage
In some cases, you might not have life insurance coverage through your employer. In other situations, coverage may expire after retirement, or not be enough.
A lot of people who have group coverage through their work do not understand the limitations of their life insurance, and as a result often have to deal with uncomfortable financial situations they thought were covered.
If you have life insurance through an employer and are thinking about retiring soon, it is extremely important that you understand what the policy protects, and how this will change in retirement.
Planning for these gaps in coverage is one of the main reasons that retired people with no children need life insurance coverage. It is important to plan for this sooner than later, as life insurance rates only increase with age, as policy options decrease.
How Much Life Insurance Do Retired People Without Children Need?
When it comes to planning for retirement, your life insurance needs will largely be based on all of the factors above. Most importantly, you should at least factor in:
- Paying off debts
- Funeral and final expenses
- Providing for your spouse
- Maximizing pension benefits
When it comes to evaluating your specific needs, we strongly suggest that you speak with an independent life insurance agent who can help you identify your precise needs, compare your options, and find the best rates for your coverage.
If you are looking to find the most affordable life insurance for people in retirement, give us a call. At JRC Insurance Group, we work with the best life insurance companies in the country, and can find you the best coverage, regardless of your situation.
Who Doesn’t Need Life Insurance In Retirement?
No matter how financially stable you are, there are very few people who have no need for life insurance altogether. At the very least, you should consider purchasing burial insurance to cover the cost of final expenses. Otherwise, you will leave a financial burden on your family when you pass.
What Type of Life Insurance is Best for Retired People with No Children?
Depending on the type of needs you have for coverage, there are 4 types of life insurance policies that are best for retired individuals with no children.
1. Term Life Insurance
With term life insurance, you can take out a policy in increments of 10, 15, 20, 25, or 30 years. Most companies allow you to renew your term even after the term policy has expired until age 95. Many companies also allow you to convert your term policy into permanent coverage within a certain time period.
With most term policies, your premiums remain level or decreasing, which means the premiums you pay stay the same throughout the duration of the term, or they decrease with time while death benefits decrease.
For people who are in good or excellent health, this will be the most affordable life insurance policy in terms of monthly costs per thousand dollars of coverage.
This type of life insurance policy is best for people who plan on their financial needs changing over time. It is also great for people in good health who are looking to find affordable coverage. Lastly, it is best for people who only need coverage for a specific period of time, or who may want to convert to permanent coverage later in life.
Want to learn more about term life insurance in order to determine if it is best for you? These resources have everything you need to know:
2. No Exam Life Insurance
No exam insurance policies are much faster to obtain. The underwriting process is shortened, without the need for medical examination in order to obtain coverage. For some policies, you will need to answer a few health related questions.
This can result in extremely fast coverage, with some companies offering 48 hour or less turnaround time.
As a result of the higher risk insurance companies take on with this type of policy, the cost is slightly higher. However, people who are in good health can usually obtain no exam life insurance at a reasonable and affordable price that is fairly close to traditional coverage.
We do not recommend this type of coverage for people unless they have a specific reason for opting out of the medical exam, such as:
- Fear of needles/examination
- Pre-existing health conditions
- Need life insurance coverage fast
Looking for more information on no exam life insurance for retirees? These comprehensive guides will help you get more information:
3. Burial Life Insurance
Burial insuranceis essentially the bare minimum life insurance policy that you can take out. Coverage amounts on these policies are usually less than $50,000, and are specifically designed to cover final expense costs.
Some specific burial insurance plans called final expense insurance only allow people to cover these costs. Other plans are pre-paid, with the services, headstone, etc… all chosen and paid for in advance. Typically, pre-paid plans are purchased through funeral homes exclusively.
This type of life insurance policy is best for retirees who already have coverage, and want to supplement it with final expense insurance, or for people who only need a very small amount of coverage designed to cover these expenses.
Usually, rates for these policies are extremely cheap, though expensive when compared on a cost per thousand basis - because these policies are guaranteed to pay out no matter what age you die.
Lastly, burial insurance is best for people who have pre-existing health conditions that do not allow them to qualify for traditional coverage, or who are too old for it.
Want to learn more about burial insurance plans? Here are some helpful resources:
4. Permanent Life Insurance
Permanent life insurance policies let you take out coverage that remains in effect for your entire life, or until the maximum policy age (usually 121).
Permanent policies are best known for their cash value accumulation, which differentiates them from term policies. Depending on the way this cash value is accumulated, there are many types of permanent life insurance plans, including:And many more…
This cash value can be borrowed against with zero interest - as a loan to yourself. Each policy accumulates this cash value at a different rate and with different investment vehicles.
If your objective with life insurance is to create an estate, or have coverage through your entire life, this is the best type of policy for you.
However, for retired people who are not in this position, it is not recommended that you take out this type of policy, as they are the most expensive in terms of cost per thousand, especially as you get older.
Looking for more information on permanent life insurance policies for retirees? Here are some detailed guides that will help:
How Much Does Life Insurance for Retired Individuals Cost?
It is important to note that life insurance rates are affected by a few major factors:
- Family Health History
- Policy Type
- Coverage Needed
Term and Whole Life Insurance Rates
Note: All life insurance rates below are for people who are in preferred health, and are non-smokers.
|Age||Policy Type||$100,000 Male||$100,000 Female||$250,000 Male||$250,000 Female||$500,000 Male||$500,000 Female|
|55||10 Year Term||$20.38||$17.60||$37.41||$28.19||$67.14||$49.72|
|55||20 Year Term||$33.75||$24.23||$60.41||$45.24||$113.32||$83.33|
|55||30 Year Term||$67.71||$49.36||$119.27||$91.18||$231.94||$175.97|
|60||10 Year Term||$29.76||$24.08||$58.56||$40.74||$109.17||$72.59|
|60||20 Year Term||$52.34||$37.20||$105.81||$74.30||$200.76||$142.22|
|65||10 Year Term||$52.85||$34.81||$100.48||$66.08||$188.67||$121.84|
|65||20 Year Term||$96.98||$65.36||$195.57||$134.29||$384.77||$257.40|
|70||10 Year Term||$85.83||$59.29||$175.72||$109.13||$313.20||$197.13|
|70||20 Year Term||$201.68||$167.85||$407.00||$362.29||$790.31||$697.40|
|75||10 Year Term||$149.84||$110.07||$328.95||$216.27||$631.96||$417.46|
|75||15 Year Term||$273.93||$185.22||$588.41||$388.44||$1,170.42||$770.49|
|80||10 Year Term||$383.52||$291.58||$778.39||$568.65||$1,497.28||$1,130.50|
*Displayed monthly rates are accurate as of 07/13/2022 and are provided for illustrative purposes only.
Note at that after 80, the only available term life insurance policies are 10-year policies.
Burial Insurance Rates
The rates below are for people who are in Standard health.
|Age||$5,000 Male||$5,000 Female||$10,000 Male||$10,000 Female||$25,000 Male||$25,000 Female||$40,000 Male||$40,000 Female|
*Displayed monthly rates are accurate as of 07/13/2022 and are provided for illustrative purposes only.
Finding Affordable Life Insurance in Retirement
Now that you understand how much life insurance you need in retirement, it is important that you take the right steps in order to find affordable coverage for you and your spouse.
The best way to do this is to work with an independent life insurance agent who can help you compare rates and policies from dozens of the best life insurance companies on the market.
At JRC Insurance Group, our agents work independently of any one company, and we work with 63 of the best life insurance companies for retirees. This allows us to help our clients find the best coverage for their specific situations, saving them thousands, and allowing lots of customization.
If you are retired without children, and want to learn more about how much coverage you need, what companies are best, and what your options are, give us a call toll free at: 855-247-9555. Or, send us a message with your questions directly, here.
Or, if you want to compare life insurance rates from some of the best companies on your own, use the calculator below to compare quotes instantly!
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.