Life insurance after 60: is it worth having?

By CareFinder Team · Published 2026-06-30 · Last reviewed 2026-09-18

Life insurance after 60 can be worth it if someone would struggle financially after your death, if there is a debt to clear, or if your estate faces an Inheritance Tax bill that a policy written in trust could pay. If nobody depends on your income and your estate is below the tax threshold, saving the premiums is often better value.

Life insurance after 60 is worth it for some people and poor value for others. It makes most sense when someone would be left short of money if you died, when there is a debt such as a mortgage to clear, or when your estate is likely to face an Inheritance Tax bill. If none of those applies, putting the premiums into savings is often the better choice.

Cover becomes more expensive with age and health conditions, so it pays to be clear about what you need it for before comparing quotes.

What are the main types of cover after 60?

Term life insurance

Term insurance pays out only if you die within a fixed period, such as 10 or 15 years. It is usually the cheapest cover for the amount paid out, but many insurers set a maximum age for taking out a policy and for the end of the term. If you outlive the term, nothing is paid.

Term cover suits a specific, time-limited need, such as a mortgage or a loan that will be paid off by a certain date.

Whole-of-life insurance

Whole-of-life insurance pays out whenever you die, as long as premiums are paid. Because a payout is certain, premiums are much higher than for term cover. Policies are usually medically underwritten, so your health affects the price.

This is the type most often used for Inheritance Tax planning, because the payout comes whenever the tax bill falls due.

Over-50s plans

Over-50s plans are a form of whole-of-life cover with guaranteed acceptance and no health questions. The payout is usually modest and fixed. Most plans have a waiting period, often one or two years, during which death from natural causes returns premiums rather than paying the full sum. If you live a long time, you can pay in more than the policy pays out.

When is life insurance worth having after 60?

Cover is more likely to be worth it if:

• Someone depends on your income, such as a partner whose pension would fall if you died
• You have a mortgage or debt that would otherwise be paid from the estate, perhaps forcing the sale of a home a partner lives in
• Your estate may pay Inheritance Tax, and you want your family to have cash to pay it without selling assets
• You want to leave a set sum to someone and are happy to pay for that certainty

It is less likely to be worth it if:

• Nobody relies on your income
• Your estate is comfortably below the Inheritance Tax threshold
• You have enough savings to cover funeral costs and any debts
• The premiums would strain your budget now or later

How does life insurance interact with Inheritance Tax?

According to GOV.UK, for the 2026/27 tax year Inheritance Tax is normally charged at 40% on the part of an estate above the £325,000 threshold. The threshold can increase to £500,000 when a home is left to children or grandchildren, and any unused threshold can pass to a spouse or civil partner. Always check the current thresholds, as they are set by the government.

If a life policy pays into your estate, the payout is added to the estate's value and may itself be taxed. HMRC's Inheritance Tax manual explains that policies held in trust are treated as trust property instead. Writing a policy in trust, which insurers can usually set up for free, can mean:

• The payout is not part of your estate for Inheritance Tax
• The money reaches your beneficiaries without waiting for probate
• You choose who receives it

Can premiums be paid tax-efficiently?

Premiums on a policy written in trust for someone else count as gifts. Many people pay them from surplus income, which is exempt if the payments are regular, come from your income, and leave you able to keep your normal standard of living. Premiums can also fall within the annual gift exemption. The GOV.UK rules on gifts set out the conditions, and keeping a simple record helps your executors.

Will life insurance help pay for care?

Not directly. Life insurance pays out after death, so it cannot pay care fees during your lifetime. In England, the surrender value of a life insurance policy is ignored in the council's financial assessment, according to the Care and Support Statutory Guidance, but the premiums still reduce the income you have available.

Some people use whole-of-life cover to "replace" money they expect to spend on care, so their children still receive an inheritance. That is a legitimate choice, but it is expensive in later life. Compare it with simply keeping savings, which remain available if care is needed.

What should you check before buying?

1. What exactly do I need the money for, and how much?
2. How long do I need cover? If the need ends, term cover may be enough.
3. Will the premium stay the same? Some whole-of-life policies are reviewable and can rise sharply.
4. What happens if I stop paying? Many policies then end with no value.
5. Is the policy written in trust, and are the trustees and beneficiaries right?
6. Have I disclosed my health honestly? Missing information can lead to a claim being refused.

For small funeral costs, check whether a Funeral Expenses Payment could help whoever arranges the funeral if they receive certain benefits.

This is general information, not financial advice. For larger policies, Inheritance Tax planning or trust questions, speak to a regulated financial adviser and, where needed, a solicitor.

Frequently asked questions

Can I get life insurance at 70 or 75?

Yes, though choice narrows and premiums rise with age. Whole-of-life and over-50s plans are widely available at these ages; term cover is more limited because of maximum age limits.

Is it better to have term or whole-of-life cover after 60?

Term cover is better for a need that ends, such as a mortgage. Whole-of-life cover is better when the need will exist whenever you die, such as an expected Inheritance Tax bill.

Should my existing policy be written in trust?

It is worth checking. If a policy pays into your estate, the money can be delayed by probate and may add to Inheritance Tax. Many insurers let you put an existing policy into trust using their own forms.

Are life insurance payouts taxed?

Payouts are not normally subject to Income Tax for the people who receive them. The main tax question is Inheritance Tax, which depends on whether the policy is in trust and the size of the estate.

What if I have health conditions?

Underwritten policies will ask about your health and may cost more or exclude some conditions. Guaranteed acceptance plans ask no questions but usually offer lower cover and have a waiting period. A specialist broker can help compare options.

Key takeaways

• Life insurance after 60 is most useful for dependants, debts and expected Inheritance Tax.
• Term cover is cheapest but only pays within the term; whole-of-life pays whenever you die.
• Writing a policy in trust can keep the payout outside your estate and speed up payment.
• Premiums paid regularly from surplus income can be exempt gifts for Inheritance Tax.
• Life insurance does not pay for care during your lifetime.