Retiree Insurance Issues

Post-Retirement Death Benefits

An employer may provide pre-retirement life insurance benefits and post-retirement death benefits as incidental benefits to a qualified retirement plan. However, such benefits are usually too limited to be of much use to an owner-employee.

A common goal of life insurance, especially for younger workers—is to create what may be characterized as an “instant estate” for an insured who dies prematurely, before having had an opportunity to build an estate.

A retiree's need for insurance does not conform to that proposition—if he has reached the normal retirement age of 65, his subsequent death cannot readily be viewed as premature or as coming before he has had an opportunity to build an estate.