By a Slightly Bewildered Retiree Who Read the Fine Print So You Don’t Have To
Let’s be honest: when most people think of life insurance in retirement, they picture one of two things:
- A dusty old policy purchased during the Carter administration that nobody can locate, or
- A well-coiffed man named Chad in a shiny suit trying to sell you something with “whole” in the title and an explanation that makes quantum physics look like preschool math.
Now, I’m not saying life insurance is misunderstood, but if it were a person, it would be that kid in middle school who always showed up with an accordion and a retainer and nobody sat with at lunch.
But fear not! I’m here to unearth the myths, separate fact from fiction, and—perhaps most importantly—make you laugh a little while doing it. Because if there’s one thing life insurance could use, it’s a better sense of humor.
Myth #1: “I’m retired. I don’t need life insurance anymore.”
Ah yes, the classic “I outlived the need for life insurance” line. This one’s up there with “I’m just going to check Facebook for a second” on the list of famous last words.
Truth:
If you’re single, have no debt, no heirs, and plan to leave this life with the same grace and financial simplicity as a Buddhist monk, then sure, maybe you don’t need life insurance.
But most of us have… stuff. Like a mortgage, a spouse, grandkids we’ve promised to help with college (after first surviving their parents’ financial illiteracy), and funeral costs that currently run about the same as a used Toyota.
Oh, and if you have a pension or Social Security that stops or drops significantly after you go off to the great shuffleboard court in the sky, your spouse might appreciate something that fills the gap. Life insurance, when used properly, is less about dying and more about making sure someone else doesn’t go broke because you did.
Myth #2: “It’s too expensive.”
This is the part where people squint at you and say, “It’s a scam, right?!” Usually while hiding a drawer full of Beanie Babies they once called an “investment.”
Truth:
Life insurance is only expensive if you buy the wrong kind, from the wrong person, at the wrong time, for the wrong reason.
Yes, if you’re 82 and chain-smoke Virginia Slims while BASE jumping, your premium might be a bit high. But if you’re healthy and strategic, permanent life insurance (especially cash value policies like indexed universal life or whole life) can actually be a powerful, tax-advantaged asset in retirement.
We’re talking about policies that build cash value you can access later—kind of like a Roth IRA, except with fewer contribution limits and more tuxedos in the marketing brochures.
Myth #3: “It’s only for my heirs.”
This is the point where people say, “I don’t need to leave anything behind. My kids can fend for themselves. I gave them life, braces, and a 2002 Honda Civic. They’re good.”
Truth:
First of all, you deserve a round of applause for surviving the teenage years and still giving them the car.
Second, modern life insurance isn’t just about death. With certain permanent policies, you can use it while you’re alive—to supplement retirement income, cover long-term care expenses, or just finally take that Viking River Cruise with Greta, your second cousin who’s never had a boyfriend but always has impeccable luggage.
Think of life insurance as part Swiss Army knife, part safety net, part financial Swiss chocolate.
Myth #4: “It’s too complicated.”
This one’s valid. Life insurance is often explained using terms like “non-direct recognition,” “guaranteed insurability riders,” and “modified endowment contracts,” all of which sound like things invented by people who failed their communications classes.
Truth:
Yes, it can be confusing—but so was your cable bill and you figured that out (mostly). With the help of a fee-only insurance fiduciary—or at the very least, someone who isn’t paid entirely on commission—you can understand what you’re buying.
It doesn’t have to be a mystery wrapped in an enigma wrapped in a twenty-year surrender charge.
Who Is Life Insurance Actually For in Retirement?
Let’s cut through the clutter with a quick list, because even Bill Bryson gets tired eventually:
- Married retirees who want to make sure their spouse doesn’t end up eating ramen in a studio apartment because one Social Security check vanished.
- People with estates over $1 million who want to pass on money without handing a third of it to Uncle Sam.
- Grandparents who want to leave a legacy that isn’t just a shoebox of Christmas cards and one of those green banker’s lamps.
- Anyone concerned about long-term care costs, who’d rather tap a policy than drain their portfolio or rely on the kindness of Cheryl, their slightly resentful niece.
A Final Word from the Retirement Soapbox
Look, I get it. Life insurance isn’t glamorous. It doesn’t come with a tote bag or a toaster. You can’t brag about it at the golf course. But it is one of the few financial tools that can provide certainty in a world that increasingly feels like it was written by a caffeinated raccoon.
So if you’re a retiree—or planning to be one someday—don’t dismiss life insurance out of hand. Learn the truth, ignore the hype, and if a man named Chad ever hands you a brochure with gold trim and the words “guaranteed income for life,” just ask some questions.
And remember: unlike Beanie Babies, life insurance can actually be worth something.
This post is adapted from my book “The Life insurance Secret: How to Grow Rich Using Cash Valye Life Insurance, available at Amazon.com in paperback and eBook format.
Disclaimer: This post is for informational and mildly humorous purposes only. It is not financial advice, legal advice, or life coaching—although it may be the most fun you’ve ever had reading about life insurance. Talk to a licensed advisor before making any decisions. And don’t trust anyone who wears both suspenders and a belt.