Weighing the Options of Life Insurance After 55

Understanding life insurance policies is a critical part of planning for a financially secure retirement.
Understanding life insurance policies is a critical part of planning for a financially secure retirement.

Bring up the subject of cash value vs. term life insurance policies over dinner with friends and you’re likely to start a heated debate or be greeted by a series of blank stares. In the discussion of life insurance after age 55, it often seems that people either have very strong ideas about the right course of action or they have avoided thinking of the topic as much as possible. Yet life insurance is a complex issue with options that can be tailored to meet many different needs.

The first step when considering life insurance is to understand the difference between term and cash value policies.

Term Life Insurance

Term life insurance is much like car or travel insurance. You pay premiums for a set period (term) and hope that you never have a reason to use it. A term policy only pays out if you die. It has no cash value, which means it cannot be borrowed against or cashed out.

Whole Life Insurance

Whole life insurance (also called permanent or universal insurance) is a cash value policy with a death benefit that never expires. You pay premiums toward the policy and it builds cash value which you can borrow against or cash out if needed. The downside to whole life is that the premiums are much more expensive than what you would pay for a term life policy.


One way to approach life insurance is to pay as little as possible for a term policy and use the money you save (by not buying whole life) to invest in an IRA which is likely to yield higher returns. This often makes sense for young people who are concerned about dying before their children are grown or have one at-home parent who would need extra financial support if their spouse should die. A 15- or 20-year term policy would provide emergency funds in the event of a tragedy.

No Life Insurance

However, older adults whose children are grown and self-sufficient do not have the same needs. Older adults have to imagine how death would impact their current finances. If both spouses are no longer working and living on stable retirement savings, there may not be much financial impact beyond the cost of funeral expenses. If life insurance is no longer needed, you may be better off saving the money that would be spent on monthly premiums.

Elements To Consider

Yet not everyone agrees with the term life approach. Some people find that cash value life insurance policies are a good addition to their overall investment portfolio. They may feel that the expensive premiums are a worthwhile investment, as the policy does have a cash value. Whole life insurance policies can be a good idea for people with substantial wealth (or a thriving business) as they do provide some estate-planning and tax advantages.

If you already own a whole life insurance policy, remember that it does have value before your death. You can cash out the policy if you decide you no longer need it, or borrow against your policy without a credit check or the approval process needed for a bank loan. The downside to borrowing is that policy loans do accumulate interest, and both the interest and principal will be deducted from your death benefits if you die before repaying in full.

Investing in life insurance is a complex process with many different options. Meeting with an insurance agent will help you understand which options are best for your financial needs. Be sure to talk to more than one agent to compare your choices and make a well-informed decision.

Can you spot the $207,744 difference between these identical homes?

Financing is the difference!

Get the details in The 62+ Loan Homebuyers Guide.

55places Mortgage is a joint venture between Mutual of Omaha Mortgage and 55places.com.
Details here.

Share this post:

We're here to help! (800) 928-2055

Call us to speak with a customer service representative.

Subscribe to Our Newsletter

Get Weekly Updates

I agree that 55places and its affiliates, partner providers or agents may call, text, or email me about my inquiry, which may be made with automated means. I understand that my consent is not a prerequisite for buying a property. I may revoke my consent at any time by contacting [email protected] Message/data rates may apply. I also agree to 55places.com’s Privacy Policy and Terms of Use.

The Best Places to Snowbird in 2021

We’ve gathered 25 of the best places for snowbirds, including cities in Florida, Arizona, California, Texas, South Carolina, and Nevada. For each entry, we’ve also provided a list of recommended 55+ communities in the area. If you’re ready to find your own winter retreat this season, here are some of the best places to consider.

There are several 55+ communities in Philadelphia, Pennsylvania for 55+ homebuyers to choose from

55+ Communities in Philadelphia, Pennsylvania

There are over 120 active adult neighborhoods in the Philadelphia area. But if you want to be close to the best historic landmarks, museums, concert venues, shopping, and restaurants, you’ll want to settle near the heart of the city. There are four of 55+ communities in Philadelphia, and they are more affordable and offer more than you might think.

An older adult takes a continuing education course offered in his 55+ community.

Never Stop Learning: Continuing Education Programs in 55+ Communities

Many people look forward to retirement because they can finally stop focusing on work and start focusing on doing more of what they enjoy. Do you want to learn a new language, play an instrument, or try making a new craft? There are many benefits that learning something new can provide.

New 55+ Communities in the Philadelphia Area

The Philadelphia area is thriving with numerous 55+ communities offering new construction homes that are perfect for active adults. Check out 55places.com to see what’s new in the Philadelphia area.

55+ Communities Near the Philadelphia International Airport

Active adult homebuyers who seek homes for sale near an airport have options in several Pennsylvania and New Jersey suburbs, but real estate here is in high demand, so availability can be limited. The best advice? If you find something you like, grab it before someone else does!

55+ Communities With Condos for Sale Near Orlando

Condos are a great option for active adults who want to live in or near Orlando, Florida. Some condos are in communities on the water and others include golf courses, private restaurants, and recreation centers. Let’s look at some of the most popular 55+ communities with condos for sale near Orlando.

Is Greenville, South Carolina a Good Place to Retire?

If you’re considering retiring in the Southeast, Greenville in South Carolina should definitely be on your list of places to consider. This mid-sized city has quickly become one of the fastest-growing cities in the South. Here’s everything you need to know if you’re considering retiring in Greenville.

About 55places

We’re changing the way people 55 and older are searching for their perfect next place. With a national network of hand-selected real estate experts, plus comprehensive information, unbiased content, and on-the-go insight about thousands of communities across the country, we’re a trusted resource paving the way from here to home. Whether you’re interested in a low-maintenance single-level residence, an active lifestyle or age-qualified community, an intimate enclave, or anything in between, we can help you make your next move the best one yet.

Scroll to Top