Top reasons to get life insurance if you're 60+
Whether you previously had a term life insurance policy that expired or you never had life insurance before, considering a new policy as you cross the 60-year milestone can make sense. Though it may be for a different set of reasons than that of younger people, you shouldn’t assume that getting life insurance in your 60s is a waste of money.
Like with all financial decisions, making the choice to get life insurance is highly dependent on your current circumstances, such as whether you're working or retired; if your house is paid off or you have other debts; if you have financial dependents or grown children; or if you want to leave a financial legacy.
But as you approach your retirement years, as part of your overall financial planning, it’s a good idea to add assessing your life insurance needs to your checklist. Take a look at some of the scenarios for which getting life insurance in your 60s might be a smart move.
If you’re still working
For anyone in their 60s who is still working, your income is probably still funding most or all of your lifestyle. If you and your spouse still rely on your income, helping to secure it with a life insurance policy is a layer of protection worth having. This is especially true if your partner is already retired or is younger and doesn’t earn enough on one income to cover the household expenses.
If your net worth is significant
People who have large estates that they wish to pass on to loved ones could inadvertently be saddling them with a huge expense – federal estate taxes. Permanent life insurance is one way to help ensure that this cost will be covered so that your heirs do not have to liquidate their inherited assets to pay it.
If you have financial dependents
Nowadays, it’s not uncommon for people in their 60s to be financially supporting family members. For example, you might have a special needs adult child who needs long-term care, or maybe you’re raising a grandchild or helping an adult child get by. In fact, a 2023 survey by BankRate revealed that 68% of parents of adult children have made or are currently making a financial sacrifice to help their kids financially.
Having adequate life insurance coverage could be worth considering so that your family members are left with a financial cushion to help them get by should something happen to you.
If you want to supplement your retirement funding
A whole life insurance policy, thanks to its cash value component, can act as an extra source of income for people when they retire.
If you have existing debts
Even in your 60s or beyond, you might still have outstanding financial obligations, such as a mortgage, auto loan, or medical debts. Life insurance can help cover these liabilities so they won't fall onto your loved ones.
If you want to cover funeral expenses
The cost of a funeral and burial can be significant, which can be tough for the family you leave behind to manage. Life insurance can help provide the necessary funds to cover these final expenses, ensuring your family doesn't have to experience added financial stress during their time of grief.
Life insurance options at 60+
If you’re buying life insurance in your 60s, you should expect to pay more than someone who is in their 30s, 40s, or even 50s. That said, depending on your financial situation and your budget, there are still a couple of viable options for you.
Term life: If you are 65 or younger and have good general health, a term policy is the less expensive route. For example, you might consider a 20-year term, which will take you into your 80s, or a 30-year to get to your 90s.
Simplified whole life insurance: If you’re looking for lifetime coverage after age 65, this life insurance option allows you to get a policy without a medical exam. You’ll just need to answer some health questions.
Don’t overlook life insurance just because you turn 60
While the cost of life insurance does increase with age, the financial security it can provide might be worth it even if you're 60 or older. It helps to offer a safety net for your dependents, covers your financial obligations, and can even allow you to leave a lasting financial legacy.
As always, it's essential to discuss your specific needs and circumstances with a financial advisor or insurance expert to determine the best life insurance policy for you. Remember, it's never too late to take steps towards financial security.
ChatGPT was used for idea generation, but the author made significant modifications and takes ultimate responsibility for the content.