Buying life insurance is a good way to protect the person or people that are most important to you. When you're young and have a spouse and family to support, it's important to buy enough life insurance to replace your income multiple times over in case you pass away. When you're older, you may not need as much coverage. But it's a good idea to have some life insurance nonetheless.
How much insurance should you have at age 70?
Some people don't feel the need to have life insurance at all at age 70. The reason? A big purpose behind life insurance is to replace income. But by age 70, many people are retired and therefore aren't earning an income. So if there's no paycheck to replace, you might assume you don't need life insurance.
Now, the reality is that you shouldn't need as much life insurance at age 70 as at a younger age. But having some is a good idea.
When you're younger, you're generally told to aim for enough life insurance to replace your salary 10- to 12-times over. So if you earn $75,000 a year, you'd probably want a minimum of $750,000 in coverage. At age 70, rather than base the amount of life insurance you need as a multiple of your retirement income, you may instead want to get enough to cover larger expenses your spouse or survivors might struggle to pay for in your absence.
For example, let's say you and your spouse each get a Social Security benefit and have an IRA you can withdraw from as well. Social Security is designed to keep paying for life, so if you pass, you don't have to worry about that income going away for your spouse. And if you're managing your IRA well, your money might last throughout retirement.
In that situation, what you may want life insurance to do is pick up the tab for larger costs, like home repairs and funeral expenses. If you still owe money on a mortgage, you may also want your policy to pay off the balance so your surviving spouse is left with one less thing to worry about.
So let's say you owe $120,000 on your house and you estimate funeral costs at $10,000. Let's also say you want to leave your spouse with a cushion for a bigger home repair. In that case, you may decide to get a $150,000 policy.
Remember, life insurance can be expensive to put in place when you're older. You may want to be judicious with the amount of coverage you get so it's affordable to you.
One option worth looking at
Since life insurance can be costly at an older age, you may want to look at final expense insurance -- a policy that's designed to cover end-of-life expenses specifically. Progressive says that the average funeral, for example, can cost $10,000 or more. So it could pay to buy coverage to specifically not leave your loved ones to bear that burden.
Either way, the amount of life insurance you buy isn't a number you have to calculate on your own. If you have a financial advisor you work with, have them help you determine the right amount of coverage to put in place.
You may also want to loop your potential beneficiaries in on that conversation so that everyone is on the same page. You may be surprised -- in a good way -- at how much peace of mind getting life insurance brings you when you're 70 years old.
FAQs
Retirees must balance life insurance benefits against the ongoing costs, especially if they lose their job-based coverage. If you retire with debt or still earn some income for your family, keeping life insurance in retirement is a good idea.
How much does life insurance cost for a 70 year old? ›
A healthy 60-year-old can pay between $63 and $83 per month for a 10-year term life insurance policy with a $250,000 death benefit. A healthy 70-year-old can pay between $174 and $245 per month for the same coverage, and a healthy 80-year-old could pay between $718 and $960 per month.
What type life insurance is best for 70 year old man? ›
Final Expense Life Insurance for Seniors Over 70 or 75
Burial insurance for seniors has much lower premiums than many other types of life insurance, and rather than taking a health test, you only need to answer a few simple health questions on the application.
How much life insurance should a senior get? ›
What is the rule of thumb on how much life insurance coverage you need? Consider getting up to 30X your income between the ages of 18 and 40; 20X income at age 41-50; 15X income at age 51-60; and 10X income for age 61-65.
At what age should you stop buying life insurance? ›
There isn't any age cut-off that makes life insurance no longer worth it; it's all about your personal situation. That being said, it is often worth having life insurance after 65 if you have dependents who rely on you financially.
What does Colonial Penn give you for $9.95 a month? ›
A unit of Colonial Penn coverage is the life insurance benefit amount you receive for $9.95 per month. Your age and gender determine the exact amount of insurance coverage a single unit provides. The older you are, the more units you will need to purchase in order to get an adequate death benefit.
What is the best insurance company for seniors? ›
6 Best Life Insurance Companies for Seniors
- Fidelity Life: Our top pick for seniors.
- MassMutual: Our pick for guaranteed issue coverage for seniors.
- State Farm: Our pick for customer satisfaction.
- Northwestern Mutual: Our pick for a personalized experience.
- Mutual of Omaha: Our pick for accelerated death benefits.
Life insurance can suit people in all stages of life. If you're over 75, you may benefit from using a policy to help protect your beneficiaries financially, aid in estate planning, and help loved ones cover final expenses.
What is better, whole life or term life insurance? ›
The pros and cons of term and whole life insurance are clear: Term life insurance is simpler and more affordable but has an expiration date and doesn't include a cash value feature. Whole life insurance is more expensive and complex, but it provides lifelong coverage and builds cash value over time.
Does life insurance pay out after 70? ›
Life insurance options for over-70s include over-50s plans, whole of life policies, and term insurance policies. Premiums and cover differ depending on your health, age, coverage requirement, and policy type. Policies are often taken out to ensure the future financial well-being of dependents.
Life insurance is more expensive the older you are. When you are younger, you have longer to live and the life insurance company has more years to invest your premiums to try to cover the death benefit they will pay one day.
What happens to life insurance when you turn 70? ›
Coverage changes
Once you turn 70, the Optional Term Life Insurance you continued at retirement reduces to a percentage of the amount you had before you turned 70. For example, at age 70, you will only receive 65% of the amount of coverage you elected before you turned 70.
Is life insurance at 70 worth it? ›
Many people in their 60s and 70s may no longer need life insurance. They may have already paid off the house, stopped working, sent the kids off to care for themselves or accumulated enough assets to offset the need for life insurance. But sometimes buying or maintaining a life insurance policy over age 60 makes sense.
What does Dave Ramsey recommend for life insurance? ›
Core Ramsey Teaching: You only need life insurance while you have people depending on your income. Buy a 10–20-year term policy worth 10–12 times your annual income. Since life insurance is only for the short-term, you should only buy term life insurance. (Hence the name.)
What is the rule of thumb for life insurance? ›
Life insurance experts suggest having enough coverage to replace at least 10 years of your salary. 2 In this case that would be $400,000. You could also add some extra as a buffer for inflation and other unexpected costs. For this example, then, a $500,000 policy might be reasonable.
At what age is it too late to get life insurance? ›
Many life insurers don't issue term life insurance policies after the would-be policyholder reaches a certain age, with limits ranging from 75 to 90 years of age. If you're 55 or older, you may find it difficult to find term life policies up to 30 years or longer.
What is the most common age to buy life insurance? ›
The majority of people start thinking about a life insurance policy when they reach the age of 30. The reasons are clear: many people decide to start a family at this age or already have a small child or children.
