How Much Life Insurance Should You Have as an 80-Year-Old?

If you're shopping for life insurance at age 80, you won't have as many options as younger adults. Insurers typically don't offer term life insurance, which lasts for a fixed length of time, to people at that age. But you can still find whole life insurance, a permanent policy that pays out upon the policyholder's death.

Whole life policies can be expensive. To avoid overspending on coverage, it's a good idea to consider how much life insurance you need first.

You may not need any life insurance at 80

Most people get life insurance so they can leave money behind for their loved ones if they die. When you have family members who depend on you, life insurance is a way of ensuring they're taken care of no matter what. At certain points in your life, a life insurance policy is a must.

For example, if you're 40 with a spouse and two young children, you need life insurance. Otherwise, your family could be put in a difficult financial position if you were to pass away unexpectedly. Life insurance helps replace your income and ensure your family doesn't struggle with money.

When you're 80, you're at a much different stage in your life. If you have children, they're probably adults by now and not dependent on your income. They won't need a life insurance payout to maintain their standard of living. In this case, there are a few reasons you may still want life insurance:

• Funeral expenses, burial, and other end-of-life costs
• Paying off any debt you have at death
• Leaving a financial gift behind for loved ones

You can do this through life insurance. But you can also do it through your savings and investments. If you have enough money in the bank and in your retirement accounts, you may already be self-insured. Being self-insured means you have enough to cover any costs you leave behind, including end-of-life costs, so life insurance isn't necessary.

How much life insurance to buy as an 80-year-old

Not everyone has enough money saved to be self-insured. Even if you do, you might still want to buy life insurance just in case. It could give you peace of mind, especially if you need to dip into your savings for medical bills or other expenses later.

To calculate how much life insurance you should have, add up the estimated cost of the following:

• End-of-life expenses
• Your outstanding debt
• Any extra money you want to leave for your family

End-of-life expenses can vary quite a bit. But the average cost of a funeral with a viewing, burial, and vault for the casket is $9,995, according to the National Funeral Directors Association. We'll round that up to $10,000, although you may want to budget even more to account for inflation.

Let's say you also have $15,000 left on your mortgage, and you'd like to leave your two children $10,000 each. That's $10,000 in end-of-life expenses, $15,000 to pay off your mortgage, and $20,000 for your children. You'd need $45,000 in life insurance to cover those costs. Or, if you want to go the self-insured route, you could set aside $45,000 in a savings account.

Many 80-year-olds don't need life insurance anymore. If you decide to get it, make sure to shop around with the top life insurance companies. Compare rates so you can see which company will offer the best deal on the coverage you need.