What Happens to Life Insurance After Retirement?

What Happens to Your Life Insurance When You Retire?

Life insurance is a critical part of your financial protection plan during your working years, but what happens to it when you retire? As your income changes and your dependents become more financially independent, your life insurance needs may shift. It’s important to evaluate whether to keep, adjust, or let go of your life insurance coverage during retirement.

If you have term life insurance, your policy may expire around retirement age. In this case, you’ll need to decide whether to:

• Let the policy lapse if your financial obligations have decreased

• Renew the policy annually (often at a higher premium)

• Convert it to a permanent life insurance policy if that option is available

For those with permanent life insurance like whole or universal life, the policy continues even after you retire—as long as you keep paying the premiums. These policies often build cash value, which you can use as a tax-advantaged supplement to your retirement income. Some retirees even use this value to help pay premiums or cover unexpected expenses.

Your retirement plan and family situation play a big role in this decision. If you still have dependents, outstanding debts, or estate planning goals, keeping some life insurance coverage may be beneficial. It can also help cover final expenses or leave a financial gift to loved ones.

Before making any changes, review your current policy and retirement goals. A licensed advisor or insurance expert—like those at ProvaLife—can help you decide the best course of action to align your life insurance with your next chapter.

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