---
title: Life insurance for retirees: What You Need and Why
url: https://coverfolk.com/for/retirees
updated: 2026-10-08
---

# Life insurance for retirees

In retirement, life insurance is often about final bills and making sure a spouse is okay.

[How much do I need?](/calculator)

Updated October 8, 20264 sources[Fact checked](/editorial-standards)

The short answer

If your spouse would lose a pension or Social Security check when you die, life insurance can fill that gap. Most retirees also want a small policy for final costs.

**$255**One time Social Security death payment, paid only to some spouses or minor children.[Source: Social Security Administration, Survivors Benefits, Publication 05-10084](https://www.ssa.gov/pubs/EN-05-10084.pdf)

When one spouse dies, the smaller Social Security check usually stops. The survivor keeps one check, not two. SSA's average for an aged widow or widower was $1,919 a month in January 2026.

Social Security pays only a one time $255 at death, and only to some spouses or children. That will not cover a funeral.

A small whole life policy is the usual way to cover final costs. Some retirees also use life insurance to leave money to kids or grandkids. LIMRA says 39% of owners named leaving an inheritance as a reason.

## Tips that help

* Ask your pension plan what your spouse gets if you die first.
* Cover the funeral with a small whole life policy.
* Keep paying any policy you already own if you still need it.
* Review your beneficiaries. The NAIC says to check after life changes.
* Do not cancel an old policy until a new one is in force.

## Coverage that fits

[**Final expense: Small whole life plans that pay for a funeral and last bills.**](/coverage/final-expense)[**Whole life: Coverage that lasts your whole life and builds cash value.**](/coverage/whole-life)[**Term life: The most coverage for the least money, for 10 to 30 years.**](/coverage/term-life)

## Common questions

Should I keep my old policy?

Often yes. Your health and age may make a new one cost more. The NAIC warns not to cancel until a new policy is in force.

Is the payout taxed?

Usually not. The IRS says death benefits are generally not income to the beneficiary.

How do I claim the $255?

Apply with Social Security within 2 years of the death, SSA says.

## Sources

1. [Social Security Administration, Survivors Benefits, Publication 05-10084 (April 2026)](https://www.ssa.gov/pubs/EN-05-10084.pdf)
2. [Social Security Administration, 2026 Cost of Living Adjustment Fact Sheet](https://www.ssa.gov/news/en/cola/factsheets/2026.html)
3. [LIMRA and Life Happens, 2026 Facts About Life Insurance (2026 Insurance Barometer Study)](https://www.limra.com/siteassets/newsroom/liam/2026/facts-about-life-insurance.pdf)
4. [NAIC, Life Insurance Buyer's Guide (2026)](https://content.naic.org/sites/default/files/publication-lig-lp-consumer-life.pdf)