Do You Still Need Life Cover in Retirement?

Life Cover: A Shifting Need

You’ve likely been told for decades that life cover is essential to protect loved ones, cover debt, and offer financial stability in uncertain times.

But once you retire, is it still worth the monthly premium?

At mCubed, we often work with retirees who still carry significant life insurance policies, whether individually purchased or inherited from their employer benefits. In a phase of life where income typically declines and expenses must be carefully managed, it’s natural to question: Is this one cost you can cut?

Life Cover Isn’t One-Size-Fits-All

Throughout your life, your need for life cover evolves. In early adulthood, with fewer responsibilities and minimal debt, the emphasis is often on protecting your income in the event of disability rather than death. As life progresses, the stakes rise, mortgages, dependants, and long-term commitments all increase, and so does the importance of having adequate life cover in place.

During these peak earning years, life cover plays a critical role: it ensures your family won’t be financially exposed should something happen to you. But once you approach retirement with your children grown, debts paid, and a solid financial plan in place, it’s time to reassess.

Re-Evaluating Your Needs After Retirement

If your spouse is financially secure through your pension and investments, and there are no large debts or dependants to support, maintaining a high-cost life cover policy may not make sense. That said, life cover can still be useful in certain circumstances, such as covering estate duties, final expenses, or supporting a surviving spouse if other income streams fall short.

Many retirement funds offer a continuation option that allows you to retain your group life cover without further medical underwriting. While premiums can be high, this might be worth considering if you still need the protection and cannot secure new cover due to age or health factors.

Practical Considerations

We often find retirees feel emotionally tied to their life cover policies. After years of paying into them, letting go can feel counterintuitive, even unnecessary. But it’s important to approach this decision with logic, not nostalgia.

Ask yourself: Does this policy still serve a clear purpose? Could that money be better used elsewhere, to bolster your retirement income, reduce debt, or improve your lifestyle?

If the policy no longer serves a vital purpose, consider alternatives. For instance, adult children could choose to take over premium payments in exchange for receiving the proceeds one day. This can preserve the value of the cover without draining your retirement income.

Get Expert Advice Before You Decide

Before you cancel, reduce, or continue your policy, it’s vital to conduct a detailed needs analysis with a qualified financial adviser. They’ll help you assess whether the cover still aligns with your broader retirement plan and guide you toward a decision that balances peace of mind with financial efficiency.

After all, retirement isn’t just about income, it’s about making every rand work for you.