10 best places to retire in Australia

Life Insurance for Retirees

Just because you’re no longer working full-time, it doesn’t mean you can’t still benefit from life insurance cover.

Retirement is a time when you can relax and take things easy, enjoying a life free of responsibility and obligation. If you’ve left the workforce and you don’t have the same financial commitments you did when you were younger, you might think that life insurance cover may no longer be necessary.

However, you might be surprised to learn that life insurance for retirees can still offer a long list of important benefits, and it’s well worth considering your cover needs during retirement. So how can you assess your cover needs and find the best life insurance for retirees?

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Coverage is the amount of money that you will be paid in the event of a claim. An insurance consultant can help you determine an appropriate amount. Calculator
Provides a lump sum payment if you become totally and permanently disabled and are unable to return to work.
Provides a lump sum payment if you suffer a serious medical condition. Cover can be taken out for 40-60 medical conditions depending on the policy you choose.
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Get a quote from these direct insurers

Product details Maximum cover Maximum Entry Age Cooling-off
(days)
Life Insurance
Life Insurance
Choice of cover options and flexible premiums to suit budget. No lock-in contracts and fast application. $1,500,000 65 30 Get quoteMore info
Life Insurance
Life Insurance
Get flexible life insurance up to the sum of $2,000,000. $2,000,000 59 21 Get quoteMore info
Real Family Life Insurance
Real Family Life Insurance
Get a refund of 10% of the premiums you've paid (in the first 12 months) with The Real Reward™ . $1,000,000 64 30 Get quoteMore info
Term Life Insurance
Term Life Insurance
A simple life insurance product that can offer up to $1,500,000 in a lump sum payment on death or diagnosis of terminal illness. $1,500,000 69 30 Get quoteMore info
NobleOak Term Life Insurance
NobleOak Term Life Insurance
Get a quote for up to $15 million in life insurance cover. Cover can be tailored to meet your personal needs. $15,000,000 69 30 Get quoteMore info
Woolworths Life Insurance
Woolworths Life Insurance
Receive a discount of 10% on life insurance as a Woolworths Rewards Member. T's and C's apply. $1,500,000 65 30 Get quoteMore info

What is the maximum age of entry from each insurer?

The maximum entry age is the maximum age you can be before you can't apply for cover under a policy. The expiry age is the age when your cover will cease

BrandsMaximum entry ageExpiry age
75
100
74
99
75
100
69
99
64
99
69
80
Macquarie (Zurich)
65
99
79
99
70
100
70
85
59
75
75
100
69
99
Virgin6580

*Maximum entry age will depend on the premium you choose and any additional options. Always check with the Product Disclosure Statement (PDS).

Is life insurance still necessary if I retire?

The first question you need to ask is whether you actually need life insurance. Unfortunately, there is no easy answer to this question as it really depends on your own personal circumstances and needs.

Consider the financial impact your death, serious illness or injury could have on your loved ones. If your kids are self-sufficient, your spouse has an adequate retirement income and you don’t have any debt, you may decide that you don’t need life insurance. After all, the point of life insurance is to replace your income when you die unexpectedly. It may not be necessary if you don’t have any income that you need to replace.

However, there are plenty of situations when life insurance after retirement could be a good idea:

  • If you are still paying off debt. If you’re still paying off your mortgage, a business loan or any other type of debt, you won’t want that debt to burden your loved ones if you die.
  • If you have dependent children. For example, you might have a child with special care needs or a child who is attending university.
  • If your spouse isn’t self-sufficient. If your spouse relies on you for financial support, or if your spouse stands to lose a substantial portion of their retirement income when you die, life insurance can be beneficial.
  • If you want to leave something behind. Do you want to help your loved ones cover the cost of your funeral or simply ensure they receive a little financial support when you pass away? Life insurance could be the answer. You could even nominate a favourite charity as a beneficiary if you wish, leaving behind a lasting legacy.

In these circumstances, purchasing life insurance means you can rest easy knowing that if you die, the people who depend on you will receive the support they need.

How much will life insurance cost at retirement, before and after.

MaleFemale
PolicyMonthly premium*PolicyMonthly premium*
MLC Insurance$620.40MLC Insurance$368.47
Zurich Futurewise$625.29Zurich Futurewise$379.02
CommInsure Protection$639.25CommInsure Protection$379.95
AIA Priority Protection$644.30AIA Priority Protection$423.95
ClearView LifeSolutions$650.02ClearView LifeSolutions$386.82
TAL Accelerated Protection$655.96TAL Accelerated Protection$431.32
Zurich Wealth Protection$679.23Zurich Wealth Protection$406.03
AMP Flexible Lifetime Protection$686.79AMP Flexible Lifetime Protection$426.04
BT Protection Plans$686.87BT Protection Plans$418.09
Asteron Life Complete$687.58Asteron Life Complete$469.51
AMP Elevate$696.97AMP Elevate$492.33
OnePath OneCare$724.53OnePath OneCare$451.41
Average$666.43Average$419.41

*Disclaimer: These prices where drawn from the finder.com.au life insurance comparison engine and were accurate when this article was published on April 4th 2017. Please note the prices are subject to change and may vary depending on your personal situation and finances.

Should I change my life insurance when I retire?

It’s important to regularly review your life insurance policy throughout your life to make sure it always matches your cover needs. This is especially true when you reach retirement. Your policy may have provided perfect cover when you were working full-time, paying off a mortgage and supporting a young family, but that same level of cover may be far too much now that you’re retired.

If you’re approaching retirement or have recently left the workforce, now is the time to sit down and consider your life insurance needs. Think about your financial situation, your dependants and your obligations to decide whether you still need cover. If you do continue to need cover, does your current policy provide an adequate level of cover, or are you paying too much for a high level of cover you no longer need?

Although you don’t necessarily have to change your policy when you retire, it’s definitely worth considering whether the level of cover you have is right for you. Ask your financial planner or insurance broker to help you assess your financial and personal situation and make sure you have the cover you need.


Will I be paid if I cancel my life insurance?

In most cases, you will not be paid if you cancel your life insurance policy. Regardless of whether you have term life cover, TPD insurance, trauma cover or funeral insurance, the only time when you can cancel cover and receive a full refund is within the cooling-off period (usually a maximum of 30 days after you take out cover). Cancelling after this time means that you will not receive a refund of any premiums you have paid.

If you’ve recently retired and you’re considering cancelling your life insurance, make sure you’re absolutely certain that you no longer need cover. If you change your mind and decide that you need to purchase a new policy, your new premiums will usually be much more expensive than before.


What should I be looking for in a policy?

If you’ve decided that life insurance after retirement is the right option for you, look for the following features when comparing policies:

  • Simplified cover. Most retirees won’t need all the bells and whistles and optional extras that come with some life insurance policies. In most cases, you will find all the cover you need in a basic policy, so make sure you’re only paying for the features you need and none you don’t.
  • Adequate sum insured. While $1.5 million of life cover may have been necessary when you were 20 years younger, it may be excessive in your current circumstances. Consider your financial situation and obligations to choose a more suitable sum insured.
  • Expiry age. While most life cover policies have an average expiry age of 99, TPD and trauma insurance policies commonly have much younger expiry ages of 65 or 70 years. Make sure you’re aware of this when shopping around for cover.
  • Premium freeze. Life insurance premiums increase as you age, so choosing a policy with a premium freeze option allows you to “lock” your premiums at the same level. This means your level of cover will reduce slightly each year.
  • Benefit indexation. Most policies will increase your sum insured each year so that it keeps pace with inflation. This is an important feature because it guarantees that the level of cover you choose increases in line with the rising cost of living.
  • Guaranteed future insurability. Policies with this feature allow you to increase cover without having to undergo additional medical underwriting.
  • Funeral advance benefit. Many life cover policies include a funeral advance benefit, which provides a portion of the sum insured as an advanced benefit payment to help your loved ones cover the cost of funeral expenses.
  • Affordability. Any life insurance policy you choose must be affordable throughout retirement. Make sure you can comfortably meet the cost of premiums and compare quotes from multiple providers to make sure you get value for money.

Other tips to help you choose the right cover

  • Consider your cover needs. The first step when choosing life insurance is to think about what type of cover you need and how much. Do you want life cover that pays a lump sum benefit when you die, or could you benefit from another option such as total and permanent disability (TPD) insurance? Also make sure you consider the financial impact your death, serious illness or injury could have on your loved ones to determine how much cover you need.
  • Compare your options. Don’t just choose the first policy you come across; compare the features, exclusions and cost of several policies to get a clear idea of which insurer offers the best deal.
  • Look beyond the cost. Cost will always be an important consideration when buying insurance, but it shouldn’t be the only one. Remember to compare life insurance quotes along with the features and benefits each policy offers. This will help you find the best value for money.
  • Get expert advice. Life insurance is complicated and can be confusing for most people. That’s why you should find an experienced insurance broker to help you assess your cover needs, understand how life insurance works, compare a variety of policy options and find the cover that’s right for you.

Is funeral insurance more suitable?

The higher level of cover offered by a life insurance policy may be more than some retirees actually need. Rather than paying for cover you don’t require, it might be worth your while looking for a more affordable insurance option that can still provide financial support for your loved ones when you die.


Benefits of funeral insurance

Funeral insurance provides a lump sum payment to your beneficiaries when you die, helping them to cover the cost of your funeral and any other immediate expenses that arise. You can choose your level of cover based on your financial situation with a maximum benefit of $30,000 available.

Another advantage of funeral insurance is that it’s quick and easy to apply, with no medical or blood tests required. Guaranteed acceptance is typically provided to applicants under 80 years of age, making funeral insurance especially worth considering if you’ve been refused life insurance cover.

Drawbacks to consider

However, as with any type of insurance, there are some traps and pitfalls you should be wary of. The key thing to remember when shopping for funeral insurance is to look for a policy with capped premiums. This will ensure that you will never pay more for cover than the sum insured under your policy.

Regardless of whether you want life insurance or funeral insurance in your retirement, the best thing to do is ask an experienced insurance broker for help. An insurance broker will help you compare a wide range of policies and find the best cover for your needs.

Compare life insurance quotes for retirees

* The offers compared on this page are chosen from a range of products finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking financial advice and consider your personal financial circumstances when comparing products.
Picture: Shutterstock

William Eve

Will is a personal finance writer for finder.com.au specialising in content on insurance. While he cannot give personal advice to clients, Will enjoys explaining the intricacies of different types of protective cover to help individuals and businesses find affordable cover that won't leave them underinsured.

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