Insurance solutions later in life


Three women: a grandmother, mother and daughter dance together in a kitchen.

Key Points

  • Life insurance can do more than provide financial support for your beneficiaries.
  • It’s good to revisit life insurance during your 50s and 60s as solutions may be more accessible and less costly than you might think.
  • An Ameriprise advisor will discuss different ways life insurance may help support specific financial goals and needs.

"My children are grown, and the mortgage is paid. At this stage, what can life insurance do for me?”

As you consider the question, it’s helpful to remember that life insurance can do more than aid your beneficiaries. With adjustments and planning, you can use life insurance to cover major expenses, protect retirement assets and generate/transfer wealth. Your advisor can show you options that address your specific financial goals and needs.

Cover major expenses

Medical: Some policies provide a living benefits rider, which gives you the option to advance a portion of the death benefit if you are diagnosed with a terminal illness. You could use it to pay for medical treatment or assistance with everyday activities to care for your basic needs.

Taxes and loans: With effective planning, life insurance proceeds can be structured to help pay estate taxes or settle outstanding loans. Some insurance solutions can also provide you with tax advantages, which you could discuss with your advisor and a tax professional. 

Long-term care: Hybrid policies combine life insurance with long-term care benefits that may help you pay for the costs of in-home care, assisted living or a nursing home — expenses Medicare does not cover. Long-term or chronic care riders, available at an additional cost, may also be added to life insurance policies, allowing you to access a portion of your policy’s benefit early for care expenses.

Protect your retirement assets

Pension flexibility: Married couples with a traditional defined-benefit pension could choose a higher monthly single life benefit payout instead of a joint and survivor option. The difference in monthly income could then be redirected to a life insurance policy (pending insurability) to help provide the surviving spouse with income.

If the spouse dies before the pensioner, the surviving spouse could choose to increase his or her income by reducing the life insurance amount. There is also the potential to leave life insurance benefits to heirs. Traditional defined-benefit pensions do not provide that option.

Supplemental retirement income: When properly designed for you, a cash value life insurance policy — such as whole life, universal life or variable universal life — can generate cash value as a stable source of supplemental retirement income, if needed.

Generate and transfer wealth

Potential portfolio returns: Universal and variable universal life policies can help support your long-term investment strategy. They combine life insurance coverage with the ability to earn potential investment returns. Some universal life policies also offer downside protection — a way to help reduce the frequency or amount of losses among your investments.

Wealth transfer: Life insurance can protect and sometimes even increase the amount you’re able to pass to a spouse or the next generation in your family. For example, if you don’t need the income from annual required minimum distributions (RMDs) when you reach age 72, you could consider using the RMDs to fund a life insurance policy, assuming you qualify.

The death benefit proceeds could create more wealth for your heirs. This is because, generally speaking, life insurance proceeds are tax-free to the beneficiary, whereas traditional IRA withdrawals count as taxable income.

Key questions to discuss with your advisor

Your 50s and 60s are good times to revisit life insurance, as solutions may be more accessible and less costly than you might think. The key is to think about your future needs and select the solutions with the features you want.

Your advisor can help with this, providing personalized advice to support your goals and address key factors such as your estate, beneficiary and tax situation. Together, you can talk through important questions like:

  • Are you earning income in retirement from consulting or part-time work?
  • Are you carrying debt, such as a mortgage or student loan?
  • Is anyone (a child or spouse) still depending on you for financial support?
  • Will estate taxes be a concern for you and your heirs?