A quick summary for those in a hurry
Retiring doesn't automatically change your life insurance. But it is the perfect time to review your cover – no matter if your insurance is via your super or as a standalone policy. Either way, remember, income protection ends at retirement, while life cover and Total and Permanent Disability (TPD) may reduce between ages 65–70. Whether you still need cover will depend on your debts, dependents, and savings. Cancelling can be costly – particularly if your health changes later. Speak with an Insurance Adviser, like Zurich Assure, to plan your retirement with confidence.
It’s a question more and more Australians are asking: “What happens to my life insurance when I retire?” The good news is, retiring doesn’t automatically change anything. What happens next is up to you and your loved ones.
If you’re dreaming of retiring, start by answering these questions:
- What cover do you currently have in place?
- How are your policies structured?
- Do your current policies have any age limits or restrictions?
- How much are your premiums?
- Will your current cover suit your new, more relaxed lifestyle?
As you get closer to retirement, it’s important to speak with a financial adviser. They can help you understand how your insurance cover may be affected, explain your options in plain English, and guide you through any decisions so there are no unexpected surprises when retirement arrives.
There are two main options — based on how you’re currently paying premiums.
Option 1: Your life insurance is through your super
This is a common situation. Many Australians have their life insurance included in their superannuation fund — often with a company like Zurich. This can include income protection, life cover, plus TPD. Here’s how each works when you retire:
- Income protection: This stops when you retire because you’re no longer working — income protection replaces income lost due to illness or injury.
- Life cover and TPD: These usually continue after retirement, but many super funds reduce or stop cover between ages 65 and 70 — check with your fund to be sure. Remember, these premiums will continue being deducted from your super balance unless you explicitly cancel these policies.
Option 2: You have a standalone life insurance policy
If your life insurance isn’t tied to your super, then changing your employment status doesn’t automatically affect it.
It partly depends on the type of policy you have. For example:
- Income protection: Many income protection policies are tied to your income, so retirement may affect your benefit and eligibility levels.
- Life cover and TPD: These policies can continue as normal, regardless of your employment status.
Always check with your insurer to make sure your premiums are paid and policy terms are met. It’s worth noting that premiums may be lower initially but increase annually with age — especially if you’re on a variable age-stepped premium structure. So just make sure what made sense for you at 35 still makes sense now.
The big question: Do you still need life insurance in retirement?
The answer depends entirely on your situation. Life insurance is mostly to protect people who rely on you financially. So, you might still need cover if:
- You have outstanding debts — like a mortgage or investment loan
- Your partner relies on your super or investments
- You have children or family members who depend on you
- You want to cover funeral costs or leave a financial legacy
On the other hand, you might need less cover if:
- Your mortgage is fully paid
- Your children are financially independent
- You and your partner have enough savings and investments to live comfortably
- Your partner would manage financially without a payout
For many retirees, the answer lies somewhere in the middle. You may not need as much cover, but the right amount still gives you peace of mind.
It’s important to talk, before you act
Many people don’t realise cancelling life insurance can be a one-way street. If you cancel, then your health changes, reapplying will mean being reassessed. That could mean needing to pass medical assessments. It could mean exclusions are added. Your premiums might be much higher. Worst case scenario, you might not qualify at all.
Talk to a member of our team
Before retirement, it’s important to speak to an Insurance Adviser. They can personalise a plan that accounts for your debts, super, family situation and financial goals.
If you don’t have an Insurance Adviser or would like a new insurance review, contact Zurich Assure. Zurich Assure’s advisers can review your current financial situation, then help you plan for retirement with confidence. You have two options:
- Contact Zurich Assure on 1800 161 168 or visit the Zurich Assure page.
- Do a 5-minute self-assessment using Zurich Assure’s Insurance Needs Calculator.
Make sure your retirement is an exciting new chapter, not a time of uncertainty.
This information does not take into account your personal objectives, financial situation or needs. You should consider these factors and the appropriateness of the information to you. Consider seeking advice specific to your individual circumstances from an appropriate professional.
Cover is subject to limits, terms, conditions and exclusions. You should obtain and consider the relevant Product Disclosure Statement (PDS), Target Marget Determination (where applicable) and Policy Wording (as applicable) for the financial product before making any decision about whether to acquire, or continue to hold, that product.
This information is provided by Zurich Assure Australia Pty Limited ABN 58 657 804 736, AFSL 538863 (Zurich Assure) and its authorised financial advisors. All Zurich Assure Advisers are authorised by Zurich Assure to provide general and personal advice, deal in financial products and provide other financial services in the following areas: • Life and disability insurance products • Life and disability insurance issued by a superannuation fund (but not for investing your super) • Personal risk insurance and business insurance. All Zurich Assure Advisers have an association with Zurich as salaried employees of the Zurich Financial Services Australia Group. They do not receive commissions from the services provided to you. Zurich Assure receives commission payments from life insurers as detailed within its Financial Services Guide (FSG). No additional amounts are currently payable by you to Zurich Assure or its Advisers. If that changes, we will let you know before commencing work.
