If you’re retired and wondering whether life insurance still matters, the short answer is yes, it does. Many Canadian retirees keep coverage to help with funeral and burial expenses, pay off any remaining debts, or leave a legacy for children or grandchildren. The right fit depends on your goals, your health, and how long you want coverage to last.
Life insurance after retirement usually serves a different purpose than it did earlier in life. Instead of replacing income for a growing family, it can help cover final expenses, support a surviving spouse, or leave money to loved ones after you die.
When purchasing life insurance before and after retirement, consider the following questions:
Many retirees want to help protect the people they love from immediate financial pressure. That may include funeral and burial expenses, tax bills, debts, or a small amount left behind as a legacy.
If you no longer need to replace employment income, you may not need the same kind of coverage you had during your working years. But if your death would create a financial gap for someone you love, then life insurance may still play an important role in your financial roadmap.
A smaller policy with less coverage may be enough when your main goal is to cover final expenses or leave a modest gift to loved ones. Sun Life offers products with coverage ranging from $5,000 to $25 million.
A smaller amount of coverage (e.g. $5,000 to $25,000) can be more affordable than a larger policy when your financial obligations have changed.
That said, a smaller policy also means that the benefit amount is considerably less. So, if you need broader protection, you may want to consider a larger policy.
The best fit depends on what you want the insurance to do. Regardless of age, there are generally two life insurance options to choose from: term life insurance and permanent life insurance.
Permanent life insurance is built for long-term protection. It does not expire as long as policy requirements are met, which can matter if you want coverage to stay in place for the rest of your life.
Term life insurance, however, lasts for a set period of time (e.g. 5 to 40 years). This type of policy helps if you still have a short-term need, debt or obligation. For example, you may want temporary coverage while a spouse relies on your income, while a debt (e.g. mortgage) is being paid down, or while a larger asset is being settled.
If your main need is temporary, term life can be a practical option. If your need is lifelong, permanent coverage may fit better.
Learn more about the differences between term and permanent life insurance
Start with the purpose of the policy, then work backwards from there. If you’re mainly trying to cover final expenses, you may not need a large amount of coverage.
Think about these points:
The amount of life insurance a retiree needs depends on several personal factors, including:
Our life insurance calculator can help you get started. Answer a few questions and get a quick estimate of how much insurance you may need to financially protect your family. Think of the estimate as a foundation for your decision, then compare your options and talk to a Sun Life advisor if you want help narrowing them down.
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Yes, you can. If you have health concerns, you may consider getting no-medical or guaranteed life insurance. Sun Life Go Guaranteed Life Insurance, for example, won’t ask you any health questions when you apply.
Monthly life insurance payments (also known as premiums) matter more in retirement because your income may be fixed. A smaller policy can help keep those payments manageable while still serving an important purpose.
If you’re comparing options, consider how the monthly premiums fit into your budget and how long you want to keep the policy. That can help you choose between lifelong coverage and coverage for a set period.
Life insurance provides a tax-free death benefit that can help cover final expenses like funeral costs, medical bills, and outstanding debts – protecting your family from financial strain. It helps ensure these costs don't burden your loved ones during an already difficult time.
Beyond immediate expenses, life insurance lets you leave a meaningful legacy. It allows you to support charitable causes you care about; it can also help with business succession and estate-planning. For retirees, it's a straightforward way to guarantee financial security for those you leave behind.
Life insurance is an efficient way for retirees to leave even modest amounts to loved ones. A relatively small policy – often affordable with lower premiums – creates a guaranteed payout that goes directly to beneficiaries tax-free, typically bypassing probate. This makes it ideal for leaving money behind without the complexity of larger estates.
For retirees on a budget, life insurance can be combined with existing assets to create the legacy they want. Whether it's $10,000 to help a grandchild with education, $25,000 for a family member in need, or a charitable donation, life insurance can help provide a simple, cost-effective vehicle to turn good intentions into real financial help for those you care about.
Yes, the type of policy you choose affects both the legacy amount and how you build it. Term life insurance maximizes the death benefit dollar-for-dollar, making it ideal for retirees on a budget. Permanent life insurance provides lifetime protection and can help build personal wealth alongside your estate-planning goals. Your choice depends on your timeline, budget, and whether you want coverage flexibility during retirement.
Leave a legacy for your loved ones with a life insurance policy.
Get temporary coverage for specific needs.
A life insurance policy from Sun Life can help cover final expenses and more.
This information is meant for educational and illustrative purposes only. Some conditions, exclusions and restrictions apply.
