Skip to main content

The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

Your web browser is out-of-date. For the best experience, please update to a modern browser like Chrome, Edge, Safari or Mozilla Firefox.

Freedom 55 Financial is a division of The Canada Life Assurance Company and the information you requested can be found here.

Term life insurance for retirees and seniors

Key takeaways

  • Seniors and retirees may still need life insurance coverage.
  • Term life insurance can be a great fit for seniors because of its flexible term lengths.
  • Term life insurance is often more affordable than other life insurance, ideal for those on a fixed income.

No matter what stage of life you’re at, we all want to ensure that our loved ones won’t be left to struggle financially when we die.

That’s why life insurance – which gives your loved ones an insurance payout when you die – can be a great idea, even for retirees and seniors.

Do retirees and seniors really need term life insurance?

This will depend on your individual situation, but there are a few reasons seniors and retirees might benefit from life insurance:

  • You have outstanding debt, like a mortgage or credit card bills, that your family would struggle to pay without you.
  • You haven’t set aside money to pay for your funeral.
  • You don’t have any other life insurance coverage, or you’d like to add to your existing coverage.
  • Your spouse would be left with an income gap without your pension or other income.
  • You still have dependents, like adult children or grandchildren who might live with you.
  • You had life insurance coverage through your workplace benefits, but you lost it when you retired.

Compared to other kinds of life insurance, term life insurance is usually more affordable, and offers more flexibility.

For example, you can purchase 10-year term life insurance, which might be just long enough for your mortgage to be paid off, or for any dependents to become financially independent.

This could also be a great way to use the “ladder strategy” for life insurance. This is when you buy multiple term life insurance policies with different term lengths and coverage amounts.

The ladder strategy enables you to lock in your premium payments now when you are younger and healthier, and customize your coverage to your financial needs, which might lessen over time.

For example: Bill is 55 and just retired. He still has to pay off his mortgage of $80,000, which he estimates will take 10 more years. In the longer term, he wants to be able to leave some money for his children..

To accomplish this, he could apply for a 10 year term life insurance policy for $100,000 to cover his mortgage and his funeral if he were to die in this time period. He could also get a 15 year term life insurance policy for $100,000, which will go to his children because he will have paid off his mortgage by then.

This enables him to have the coverage he needs when he needs it without being stuck paying higher premium payments for coverage he no longer needs later in life.

When might term life insurance not be right for seniors or retirees?

If you don’t have any outstanding financial obligations, term life insurance may not be the right fit for you.

If you’re already happy with what you’ve been able to set aside for your loved ones in your will using other assets or insurance coverage, it also might not make sense to get additional term life insurance coverage.

Age and health are both factors that insurance companies use to calculate your premium payments, which is what you pay each month for your insurance coverage. If you’re older and have health issues, the higher cost premium payments may not make financial sense for you.

What’s next?

  • Make sure you review your life insurance coverage annually with a professional, in the same way you’d review other elements of your financial plan.
  • If you’re interested in life insurance, get an instant online quote.

The information provided is accurate to the best of our knowledge as of the date of publication, but rules and interpretations may change.  This information is general in nature, and is intended for informational purposes only. For specific situations you should consult the appropriate legal, accounting or tax advisor.  

Related articles