Your golden years should be about enjoying the life you've worked hard to build. But as you approach retirement, it's natural to think about the future and wonder what happens to your life cover.
Many Australians in their 50s, 60s and 70s ask the same questions. Do I still need life insurance now the kids are grown? What happens to the cover I have through work or super? How do I make sure my loved ones are looked after?
The good news is that there are straightforward options available. This article walks through the key questions people ask about life insurance in retirement. At Golden Insurance, we understand this stage of life come with its own challenges. We're here to help you find peace of mind for your loved ones' future.
Do I need life insurance when I retire?
There's no one-size-fits-all answer. The key question is whether your loved ones would struggle financially if you were no longer around.
Life cover can help people who have a partner or loved ones who rely on their income, a mortgage or debts that need paying off, or a wish to leave a specific legacy.
Golden Life Insurance can help give your loved ones a brighter tomorrow. It provides a lump sum they can use however they choose. Read our guide to learn more about how life insurance works.
Can I still get a new policy when I retire?
In many cases, yes. If you already have a policy in your own name, it usually continues as long as you keep up with payments.
Getting new cover later in life is possible, but options can narrow quickly, and premiums tend to rise with age. Cover inside super often ends around the mid 60s to around 70. Outside super, insurers set their own maximum entry ages.
Your health, smoking status and higher-risk hobbies may influence your premiums. That's why keeping an existing policy can be easier than buying new cover later.
If you want to take out a policy, Golden Life Insurance is designed for Australians aged 40 and 80. The application is simple. There are no medicals, blood tests, or complicated forms. Just answer a few health and lifestyle questions over the phone and you’re all set.
What do I need it for?
Life insurance is about protecting the people you love from financial stress during an already difficult time. Even in retirement, there can be good reasons to keep some cover in place.
A lump sum could help your loved ones with:
- Paying off the home loan
- Taking care of debts
- Covering funeral costs
- Helping a partner stay in the family home
- Providing a gift for children or grandchildren
Golden Life Insurance provides a lump sum of up to $250,000, depending on your age when you apply.1 Your loved ones can use it for mortgage repayments, debts, everyday bills, funeral costs or as a gift for family. It's their choice.
When do I not need it?
Sometimes keeping life cover may not be a priority. If nobody depends on you financially and you have enough assets to cover remaining costs, you might choose to reduce or cancel your cover.
The Moneysmart life insurance calculator notes that if you have no people who depend on you financially, you may not need life cover. If your super, investments and savings are enough to cover debts and ongoing needs, additional cover may not add much value.
That said, cancelling cover completely may mean you lose the option if things change down the track. It’s worth weighing up lower premiums today against the potential impact on your loved ones.
Will my group life insurance expire when I retire?
Many Australians have death in service benefits through their employer, often via a super fund's group life policy. This cover is usually tied to your job. That means death in service benefits often stop when you retire or leave your employer, unless you take steps to keep them. Most super funds also have maximum ages where cover stops for all members.
Funds must cancel insurance on inactive accounts after 16 months, unless you opt in. Once employer contributions stop, your account may become inactive.
Golden Life Insurance sits outside your employer arrangement. It's not tied to a specific job, so you can keep your cover no matter where life takes you.
Do I get it through my superannuation?
Many Australians first come across life cover through their super fund. When you join, it often includes default death and disability insurance. Premiums are taken from your super balance.
APRA notes that many Australians hold cover this way. Default cover through super can be simple and convenient while you're working.
Points to keep in mind:
- It’s usually automatic, but some members may need to opt in
- The amount varies by fund, and it isn’t tailored to your situation
- Premiums reduce your retirement savings over time
- Cover generally ends in the mid 60s to around 70
For some people, a separate policy can work alongside super fund cover or replace it in retirement. Golden Life Insurance offers cover up to $250,000, depending on your age when you apply.1
If I do get it through my super, do I need to keep contributing?
If your cover sits inside super, keeping the account active matters. Funds must cancel insurance on accounts that haven't received contributions for 16 months, unless you tell them you want to keep it.
The ATO's explanation of inactive low balance accounts sets out how funds treat inactive accounts. Once employer contributions stop, your account can become inactive. Funds will contact you before cancelling insurance.
If cover through super no longer suits your needs, you might look at personal cover where you pay premiums directly. Either way, it's important to make sure you can get cover first before cancelling any cover held through super.
How much cover will I need?
The right amount depends on what you want the money to achieve for your loved ones. For many people, the goal shifts from replacing long term income to clearing debts and making sure a partner is looked after.
A common approach is to add up what needs paying. Mortgages, debts, funeral costs, living expenses for your partner. Then subtract what your loved ones would receive from super, savings and other entitlements. This gap-based approach can help you find a starting point.
Many retirees find the gap is smaller than it was earlier in life, especially if the home loan is under control and the kids are independent.
How much will it cost?
Premiums depend on your age, health, smoking status, cover amount and whether the policy is inside or outside super. Costs generally rise as you get older.
For many older Australians, default cover through super reduces while premiums increase. You may end up paying more from your super balance for less protection.
For more detail on pricing factors, you can read about how much does life insurance cost. With Golden Life Insurance, you can arrange everything in minutes – all you need is your phone. With 100% early payout for terminal illness,2 a straightforward claims process and immediate cover,1 you can arrange everything in minutes – and make your golden years shine.
If you have any questions, or would like to get a quick quote, our team of Australian-based Life Insurance specialists would be delighted to help. Simply give us a call on 1800 417 667.