As retirees plan for their later years, life insurance remains a valuable tool to protect their legacy and provide for loved ones. In 2025, with 20% of the U.S. population aged 65 or older (U.S. Census Bureau), demand for tailored life insurance options for retirees is growing. Premiums for life insurance vary widely, from $500–$5,000 annually depending on coverage and health, while the average payout can cover funeral costs ($7,000–$12,000) or leave a financial cushion (LIMRA, 2025). This guide explores the best life insurance options for retirees in 2025, offering strategies to secure affordable coverage and ensure peace of mind.
Why Retirees Need Life Insurance
Life insurance for retirees serves purposes beyond young families, such as covering final expenses or supplementing retirement income. With healthcare costs averaging $315,000 for a retired couple (Employee Benefit Research Institute), a policy can ease the burden on spouses or heirs. It also allows retirees to leave a legacy, like a charitable donation or debt repayment.
Key benefits of life insurance for retirees:
- Pays for funeral and burial costs (average: $9,000 in 2025).
- Provides income for a surviving spouse (e.g., $10,000–$50,000).
- Covers medical debts or long-term care gaps.
- Supports charitable causes or estate planning.
Types of Life Insurance for Retirees
Retirees can choose from several life insurance plans suited to their age and financial goals. Below is a comparison:
| Plan Type | Coverage | Average Annual Cost | Best For |
|---|---|---|---|
| Term Life | Fixed term (e.g., 10 years), death benefit only | $500–$1,500 | Retirees needing short-term coverage |
| Whole Life | Lifelong coverage, cash value growth | $2,000–$5,000 | Long-term legacy planning |
| Universal Life | Flexible premiums, adjustable death benefit | $1,500–$4,000 | Retirees with variable income |
| Guaranteed Issue | No medical exam, small death benefit | $1,000–$3,000 | Older retirees with health issues |
Tip: Guaranteed issue plans suit retirees over 70 with health concerns, while whole life offers lifelong security for estate planning.
Key Factors to Consider
When selecting life insurance in 2025, retirees should focus on these factors:
- Health and Age
Premiums rise with age and health risks. A 65-year-old in good health might pay $1,200/year for term life, while an 80-year-old with conditions like diabetes could face $3,000/year for guaranteed issue (LIMRA, 2025). Apply early to lock in lower rates. - Coverage Amount
Aim for $10,000–$50,000 to cover funeral costs and debts, or $100,000+ for significant legacies. Over-insuring can increase premiums unnecessarily. - Policy Type
Term life is cost-effective for 10–20 years, while whole or universal life builds cash value (1–2% annual growth) for retirement flexibility. - Medical Exam Requirements
Guaranteed issue policies (up to $25,000 benefit) require no exam, ideal for those with chronic conditions, though premiums are higher. - Premium Affordability
Retirees on fixed incomes should choose plans with level premiums (e.g., $100–$400/month) to avoid future rate hikes.
Top Life Insurance Providers for Retirees in 2025
Based on affordability, coverage, and customer reviews, here are three recommended providers:
- Mutual of Omaha: Offers guaranteed issue and term plans. Average premium: $1,800/year. Ideal for older retirees (4.7/5 on Trustpilot).
- Prudential: Provides whole and universal life with cash value options. Average premium: $2,500/year. Great for long-term planning.
- AIG (American General): Features flexible universal life policies. Average premium: $2,000/year. Best for retirees with fluctuating needs.
Tip: Use SafePolicyNow’s quote tool to compare these providers based on your age, health, and coverage goals.
Real-World Example
Consider Robert, a 72-year-old retiree in Florida with a $5,000 annual income. His funeral cost estimate was $10,000, and he wanted to leave $15,000 for his daughter. Using SafePolicyNow, he chose a Mutual of Omaha guaranteed issue policy ($2,000/year, $25,000 benefit) with no medical exam. When he passed in 2026, the policy covered his funeral and left $15,000, easing his family’s financial burden.
Common Mistakes to Avoid
- Delaying Purchase: Waiting until age 80 can double premiums (e.g., $1,500 to $3,000/year). Apply at 65–70 for better rates.
- Overlooking Health: Failing to disclose conditions like high blood pressure can void claims. Be honest during underwriting.
- Choosing Low Benefits: A $5,000 policy may not cover rising funeral costs ($9,000+). Opt for $10,000–$25,000.
- Ignoring Cash Value: Whole life’s cash value can supplement retirement; skipping it misses a financial tool.
How to Get Started
- Assess Your Needs: Calculate funeral costs, debts, and legacy goals (e.g., $10,000–$50,000).
- Compare Quotes: Use SafePolicyNow’s quote tool to evaluate Mutual of Omaha, Prudential, and AIG for cost and coverage.
- Check Health Eligibility: Decide if a medical exam is feasible or if guaranteed issue suits your health.
- Apply Online: Submit applications during open enrollment periods for faster approval.
- Review Annually: Adjust coverage as health or financial needs change.
Frequently Asked Questions
Q: How much does life insurance cost for retirees in 2025?
A: Premiums range from $500–$5,000/year, depending on age, health, and policy type (LIMRA, 2025).
Q: Can retirees get life insurance without a medical exam?
A: Yes, guaranteed issue policies (up to $25,000) require no exam, ideal for those over 70.
Q: Is life insurance worth it for retirees?
A: Yes, it covers final expenses and legacies, saving heirs $10,000–$50,000.
Conclusion
Life insurance for retirees in 2025 offers a way to secure your legacy and protect loved ones from financial strain. By comparing providers like Mutual of Omaha, Prudential, and AIG with SafePolicyNow’s quote tool, you can find affordable, tailored coverage. Start today to ensure your retirement plans include peace of mind for your family.
Sources:
- U.S. Census Bureau, “2025 Population Estimates”
- Life Insurance Marketing and Research Association, “2025 Life Insurance Trends”
- Employee Benefit Research Institute, “2025 Retirement Healthcare Costs”
- Trustpilot, “Life Insurance Provider Reviews”
Written by Daniel Angate, an insurance advisor with 10 years of experience, specializing in life and retirement coverage.
