Why You Might Still Need Life Insurance in Your 50s and 60s
Thought you were past all that by this age? Well, if you have a mortgage that would be tough for your spouse to pay off or grown children you are supporting long term, you might be a candidate for life insurance.

The Baby Boomers get credit — and blame — for how they changed work, society and pop culture over the years. Now, with 10,000 Boomers turning 65 every day through 2030, this powerful generation is well on its way to redefining how we plan for retirement, including the role life insurance can play.
Three major forces are driving the changes. First, the obvious. People are living longer. According to the Social Security Administration, a 65-year-old can expect to live 19 to 22 more years, on average, and one in three will live into their 90s. Compare that to 1960, when a 65-year-old man would live an average of 13 more years.
Second, not only are people living longer, they’re also more active and in better overall health. As a result, retirement is becoming less about exchanging work for leisure at age 65. Instead, 44% of workers now envision phasing into retirement, transitioning into part-time work, entrepreneurship and even encore careers at age 65 and beyond.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Finally, financial concerns are the third and perhaps the most significant reason why retirement today looks different now than in past generations. Boomers are heading into their retirement years with more debt and dependents than ever before. As of 2016, the median consumer debt for households headed by someone aged 65 or older was 4.5 times higher than in 1989. And 59% of Boomers who are parents report they are financially supporting children between ages 18 and 39, citing reasons like college costs, student loan debt and a tough job market for recent graduates.
It’s financial responsibilities like these that are prompting many retirees and pre-retirees to rethink their life insurance needs. Whether you’re 30, 60 or even 80, if you have people who would be financially impacted if you pass away, life insurance can be an essential element of your financial plan.
Life insurance for the over-50 crowd
The good news is life insurance is more available and affordable than ever. Even 80-year-olds and people with a range of health situations have options for coverage.
When choosing coverage, a crucial decision is whether term or permanent life insurance is the best fit for your needs.
- Term insurance is for when you have a temporary need for coverage of anywhere from five to 30 years. Say you still have several years left on a mortgage and want to make sure your family isn’t burdened with paying off the house if you pass away. In this case, a 10- or 15-year term insurance policy might be the most cost-effective way to cover your needs.
- On the other hand, if you have a more permanent goal, e.g. you want to leave something to your heirs when you pass away or want to make sure there is money to take care of a special needs child who will always need care, a permanent insurance policy, like whole life or universal life, could be a better fit. As the name suggests, permanent insurance is meant to be around for the rest of your life and will eventually pay a death benefit as long as you keep paying the premiums.
While a permanent policy may sound great, a term life insurance policy is much cheaper than a whole life policy, even when you’re purchasing it at age 60 or 70, so it’s important to buy only what you need.
Here’s an example: We recently helped a 60-year-old client purchase a life insurance policy to provide coverage, in the event of his death, for the 15 years remaining on his mortgage. A 15-year, $500,000 term life policy made the most sense for his situation. Because he was in good health, the premiums were $180 per month. If he had purchased a permanent policy, the cost would have been over $500 per month.
Here’s another example: A client preparing for retirement had a pension that would only pay while he was alive. If he passed away and the pension payments stopped, his wife’s monthly income would decrease dramatically. In this situation, a permanent policy was the right option, because he wanted to ensure that, no matter how long he lived, at the time of his passing there would be funds to help replace his lost pension income for his wife so she could continue to be independent. A 20-year term policy might have gotten the job done, but they wanted to be certain. In the event his wife passes away before he does, the death benefit will go to his children. In this case, a term policy would have been cheaper, but it would not have accomplished their goals, so the permanent policy made sense.
You have some options to look into
When considering permanent life insurance, it’s always critical to dig into the policy details to understand the benefits and costs that are guaranteed vs. what’s dependent on asset returns or the insurer’s dividends. When you’re living on a fixed retirement income, these types of surprises can be financially devastating.
In addition, many permanent life insurance policies offer optional riders that enable you to tailor the coverage to better fit your needs. For example, a long-term care rider that allows you to use some of your death benefit to cover nursing home costs might be worth adding if you don’t already have long-term care insurance.
Here’s the bottom line. As you define your retirement, don’t overlook the role life insurance can play. And, more importantly, don’t assume that it’s too late to get the coverage you need at a reasonable price.
If you’re interested in current pricing, we offer free term life insurance quotes up to age 65 on our website, with quotes for older ages and permanent products available by request.
Dennis Ho is co-founder and chief executive of Saturday Insurance, an online independent insurance agency. With over 20 years of industry experience, Dennis has a passion for insurance and the role that it can play in building financial security. Dennis is a Fellow of the Society of Actuaries and a CFA Charterholder. Originally from Winnipeg, Canada, Dennis now resides in New Jersey with his wife and three young children.
-
Stock Market Today: Stocks Slip to Start Jobs Week
Coming off a fifth straight weekly win, the main indexes took a breather ahead of a busy week of jobs data.
By Karee Venema Published
-
Walgreens Launches Digital Tool To Help Save On Prescription Costs
Walgreens says its Rx Savings Finder will help customers compare coupon prices to get the best deal.
By Jamie Feldman Published
-
Why More Retirees Might Come Out of Retirement
It’s often not solely because of financial reasons, but because of a lack of purpose in retirement. This financial expert can relate.
By Chris Blunt Published
-
What Would Accreditation Change Mean for Real Estate Investors?
Investors determined by a test to be ‘financially savvy’ would be allowed to invest in ways that they can’t now without having a certain level of assets.
By Edward E. Fernandez Published
-
Five Simple Year-End Tax Tips to Set Up a Successful 2024
If you wait until the new year, you may miss out on some valuable tax planning strategies. Here’s what you need to know before closing out 2023.
By Julie Virta, CFP®, CFA, CTFA Published
-
Six Estate Planning Tips for Younger Generations
Millennials and Gen Zers are taking their estate planning seriously. These tips can help make the process seem less daunting.
By David Weinstock, CFP®, AEP®, CPA Published
-
Year-End Tax Planning for a Financially Healthier Retirement
Getting your tax ducks in a row for the end of the year can decrease your tax liability and make the most of your income, now and in retirement.
By Ryan Marston, Investment Adviser Representative Published
-
Where to Start Financially After a Life-Changing Diagnosis
Dealing with an illness, yours or your child’s or that of another loved one, is hard enough without adding financial duress. Here are some considerations and suggestions for covering expenses.
By Stephen B. Dunbar III, JD, CLU Published
-
Six Ways to Prepare for Widowhood and Protect the Surviving Spouse
No one wants to have to plan for losing their spouse, but having plans in place and knowing what to do when the time comes can alleviate at least some of the stress.
By Tyler Hill, Investment Adviser Representative Published
-
Creating a Blended Family? Three Key Steps to Consider
Blended families can make your finances and estate extra complicated, but you can head off some of those issues with careful planning.
By Adam Frank Published