Turning 65 isn't just about Medicare enrollment and retirement parties. It's also the perfect time to reassess your entire insurance portfolio. Your needs have changed, and so have the discounts available to you. The good news? You're likely eligible for some serious savings—but you might also need to rethink coverage you've carried for decades.
Here's what surprises most people: insurance in retirement isn't about cutting everything back. It's about being strategic. You'll save big in some areas (hello, defensive driving discounts) while potentially adding coverage in others (we're looking at you, umbrella insurance). Let's walk through exactly what you need to know.
Auto Insurance: Unlock Your Senior Discounts
If you haven't taken a defensive driving course recently, you're leaving money on the table. Over thirty states require insurance companies to recognize approved defensive driving courses. We're not talking pocket change here—these discounts can get you up to 20% in savings depending on your insurer and state.
Most courses are available online, take just 4-8 hours to complete, and cost around $20-30. You'll typically need to retake the course every three years to maintain the discount, but the savings easily justify the time investment.
Now, about that 2015 sedan sitting in your driveway. If your vehicle is worth less than $3,000-4,000, it's time to have a serious conversation about comprehensive and collision coverage. One common rule of thumb people consider: if your car's value is less than 10 times your annual premium for those coverages, you're better off dropping them and pocketing the savings. You'll still need liability coverage (that's non-negotiable and required by law), but paying $600 a year to insure a $2,500 car doesn't make financial sense.
Don't forget to ask about low-mileage discounts, too. If you're retired and driving less than 7,500 miles per year, some insurers will knock 5-15% off your premium. Between the defensive driving discount, reduced coverage on older vehicles, and low-mileage savings, seniors may see meaningful reductions in their premiums.
Life Insurance: Time to Reassess Your Needs
The life insurance you bought at 35 to protect your young family? Your situation has probably changed dramatically. If your mortgage is paid off, your kids are financially independent, and your spouse has their own retirement income, you might not need that $500,000 term policy anymore.
But here's what many people don't consider: do you still have debts? Will your spouse need income replacement? Do you want to leave an inheritance or cover estate taxes? These are the real questions that determine whether you need coverage after 65.
Many seniors shift from large term policies to smaller final expense or burial insurance policies, which typically offer $5,000–$25,000 in coverage to help cover funeral costs and final medical bills. These policies often don’t require a medical exam and could cost $50–$200 per month, depending on your age and coverage amount, with waiting periods or graded benefits being common features. The goal is simple: reduce the financial burden on your family and avoid out-of-pocket funeral expenses during an already difficult time.
If you have whole life insurance with cash value, this is also a good time to review it with a financial advisor. Some seniors find they can use the cash value to fund long-term care needs or supplement retirement income, while others prefer to keep the policy for the guaranteed death benefit.
Umbrella Insurance: Protecting Your Lifetime of Savings
You’ve spent 40 years building your nest egg. Don’t let one accident jeopardize all your hard work. Umbrella insurance provides an extra layer of liability protection beyond what your home and auto policies cover—and for many households, it can be relatively affordable. Coverage of $1 million often starts in the low hundreds per year, depending on your underlying liability limits, number of policies, and overall risk profile.
In certain situations, legal claims and judgments may expose assets you’ve accumulated over time, such as home equity or non-protected savings, depending on state law and account type. If someone slips on your icy driveway and suffers a serious injury, or if you’re involved in a multi-car accident, medical costs and legal judgments can exceed the liability limits on standard auto or homeowners policies, which commonly range from $300,000 to $500,000.
Umbrella insurance kicks in after your underlying policies are exhausted, providing coverage for bodily injury, property damage, and even personal liability situations like libel or slander. If you have significant assets—a paid-off home, substantial retirement savings, rental properties—umbrella coverage is one of the smartest insurance investments you can make.
The Long-Term Care Question
Let's address the elephant in the room: long-term care insurance. The statistics are sobering. About 7 in 10 adults who reach age 65 will need some form of long-term care at some point, including short-term or in-home assistance. National median estimates show a private room in a nursing home costing around $10,000 per month, assisted living about $5,500–$5,700 per month, and home health aide services often exceeding $6,000 per month, depending on location and level of care.
Here's the catch: if you're just now considering long-term care insurance at 65, you've missed the sweet spot. Premiums increase dramatically with age, and many people develop health conditions that make them uninsurable. The ideal time to buy is in your 50s. That said, some 65-year-olds in good health can still find coverage, with average premiums around $1,700-2,675 annually depending on gender and health status.
If traditional long-term care insurance is too expensive or you can't qualify, consider alternatives: hybrid policies that combine life insurance with long-term care benefits, short-term care policies that cover 1-2 years, or simply self-insuring by earmarking part of your retirement savings for potential care needs. The right answer depends on your assets, family support, and risk tolerance.
Your Action Plan for 2026
Start by gathering all your current insurance policies—auto, home, life, health—and reviewing them with fresh eyes. Look for opportunities to bundle policies with one insurer for additional discounts that can get as high as 20-25%. Then tackle the quick wins: sign up for that defensive driving course this month, ask about low-mileage discounts, and evaluate whether you can drop comprehensive coverage on older vehicles.
Next, schedule a conversation with an insurance agent or financial advisor about your life insurance needs. Be honest about your debts, your spouse's financial situation, and your legacy goals. You might discover you're over-insured (and can save money) or under-protected in specific areas.
Finally, get quotes on umbrella insurance if you don't already have it. With a few hundred dollars potentially protecting millions in assets, the peace of mind alone is worth the modest investment.
Retirement should be about enjoying the life you've built, not worrying about insurance. Take an afternoon to review your coverage, make the necessary adjustments, and then get back to what really matters. Your future self will thank you.
