How Much Life Insurance Should You Have as a 70-Year-Old?

Buying life insurance is a good way to protect the person or people that are most important to you. When you're young and have a spouse and family to support, it's important to buy enough life insurance to replace your income multiple times over in case you pass away. When you're older, you may not need as much coverage. But it's a good idea to have some life insurance nonetheless.

How much insurance should you have at age 70?

Some people don't feel the need to have life insurance at all at age 70. The reason? A big purpose behind life insurance is to replace income. But by age 70, many people are retired and therefore aren't earning an income. So if there's no paycheck to replace, you might assume you don't need life insurance.

Now, the reality is that you shouldn't need as much life insurance at age 70 as at a younger age. But having some is a good idea.

When you're younger, you're generally told to aim for enough life insurance to replace your salary 10- to 12-times over. So if you earn $75,000 a year, you'd probably want a minimum of $750,000 in coverage. At age 70, rather than base the amount of life insurance you need as a multiple of your retirement income, you may instead want to get enough to cover larger expenses your spouse or survivors might struggle to pay for in your absence.

For example, let's say you and your spouse each get a Social Security benefit and have an IRA you can withdraw from as well. Social Security is designed to keep paying for life, so if you pass, you don't have to worry about that income going away for your spouse. And if you're managing your IRA well, your money might last throughout retirement.

In that situation, what you may want life insurance to do is pick up the tab for larger costs, like home repairs and funeral expenses. If you still owe money on a mortgage, you may also want your policy to pay off the balance so your surviving spouse is left with one less thing to worry about.

So let's say you owe $120,000 on your house and you estimate funeral costs at $10,000. Let's also say you want to leave your spouse with a cushion for a bigger home repair. In that case, you may decide to get a $150,000 policy.

Remember, life insurance can be expensive to put in place when you're older. You may want to be judicious with the amount of coverage you get so it's affordable to you.

One option worth looking at

Since life insurance can be costly at an older age, you may want to look at final expense insurance -- a policy that's designed to cover end-of-life expenses specifically. Progressive says that the average funeral, for example, can cost $10,000 or more. So it could pay to buy coverage to specifically not leave your loved ones to bear that burden.

Either way, the amount of life insurance you buy isn't a number you have to calculate on your own. If you have a financial advisor you work with, have them help you determine the right amount of coverage to put in place.

You may also want to loop your potential beneficiaries in on that conversation so that everyone is on the same page. You may be surprised -- in a good way -- at how much peace of mind getting life insurance brings you when you're 70 years old.