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What is the minimum amount of life insurance I should have in retirement?

Why do I need whole life insurance in retirement? 

Whole life insurance is permanent. When young, many people carry term life insurance. Term life insurance only covers a certain amount of time, typically 10-30 years. After this time period is up, the policy expires and is no longer valid. 

Most people buy term insurance when they get married, buy a house, or have a child. When you are in your 20s or 30s, this makes sense. But when the policy expires in your 50s or 60s, you are still going to need coverage. Why? 



Attorney Fees




6-12 months of income replacement




Whole life insurance covers you for the rest of your life. In retirement, you are going to need a policy you cannot outlive. 

Even if you have $25,000 in your savings account or in your IRA, it is not easily accessible for your loved ones. It can take weeks, if not months, to get access to this money. Life insurance pays out very quickly. Your family needs immediate funds, especially to pay for things like the funeral and attorney fees that cannot be put off until you can access accounts. 

Another reason for this minimum life insurance: income replacement. When you die, your bills do not die with you. Your house doesn’t get sold right away. Your utilities are not immediately turned off. Your family is going to still have to pay the bills, and giving them the life insurance will help to make sure they are not scrambling to find the money.

The income replacement is especially important if you are leaving behind a spouse. The bills do not get cut in half when you die, but your Social Security check does go away, leaving a large gap in income. Having this $25,000 can give your spouse time to adjust their finances where needed. 

Examples of Whole Life Insurance Policies in Retirement

Below, we will go over 2 real policies that provide a $25,000 death benefit. Both of these are policies that we sell to our clients now. 

Whole Life Insurance Policy 1 Example 



Age 60

Age 70

Age 80

Age 60

Age 70

Age 80







This policy has no health questions. That means no matter your health condition, you can get approved for this policy. Smoker rates are also the same for this policy, meaning if you smoke, the prices do not change at all. 

The catch with this is that if you die in the first 24 months of the policy, your family gets the premium paid + 10% back, not the $25,000 death benefit. After 24 months, they get the full benefit.

While it doesn’t seem like much, even if you die in the first 2 years, this money can still help your loved ones significantly. 

Whole Life Insurance Policy 1 Example



Age 60

Age 70

Age 80

Age 60

Age 70

Age 80







This policy is priced a little lower than Policy 1. This is due to the fact that they do ask some health questions. They are not extensive, and there is no height and weight chart, but if you are seriously ill you will not be able to qualify for this policy.  

Smokers will pay more for this policy than the above quoted price. This is going to be true for most life insurance products. 

If you qualify for this policy based on the health questions, you also do not have the 24 month waiting period that Policy 1 has. No matter when you die, your family gets the $25,000 death benefit. 

When looking at these two policies, you can see that if you are relatively healthy and can answer a few health questions, you are going to get a better rate. We even have options that are lower in cost if you can answer some more stringent health questions. Working with a broker is going to give you the ability to find the best priced policy for which you can get approved.  

You can also see that the younger you apply, the more affordable insurance is going to be. Do not delay. While you can still get approved even with health issues at an older age, it is not going to be cheap. 

There are other life insurance options besides these, and the prices are just examples, but they can give you a good estimate of what you should expect when looking whole into life insurance in retirement. 

Remember, $25,000 is a minimum we recommend for whole life insurance in retirement. Many people will need more than this. Cardinal can help you evaluate your situation, see how much you might need, and find the right policy for you! 


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Finishing Well
Finishing Wellhttps://www.cardinalguide.com/finishing-well/
Retirement planning involves a lot more than just managing your money. This show is the complete guide to planning for and living in retirement, helping families finish well. Host Hans Scheil will discuss a new topic every week ranging from Social Security and Medicare to IRAs and taxes. Follow along each week by downloading the corresponding chapters below for free! New episodes air: Finishing Well Schedule on Truth Network
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