Life insurance over 60 and in your late 50s: what changes, and when cover ends

We’re Maciej Stanek and Imran Amjad, the financial advisers at Véurr Financial Planning. In your late 50s and 60s, whether life insurance is still needed mostly turns on whether anyone still depends on your income or would be left with your debts. At the same time the cover itself starts to run out: inside super, TPD cover usually ends at 65 and life cover usually ends at 70, according to Moneysmart, and it can end sooner once contributions stop. This page sets out what changes at this stage of life, and what to check before any cover is kept, reduced or cancelled.

Do you still need life insurance in your 60s?

It depends on who would be left short. Moneysmart says life cover helps when a partner, children or other family members depend on your income, or when there are large debts or a mortgage, and that if no one depends on you financially, you may not need life cover. By the late 50s the mortgage may be smaller and the children grown, but that is not true of every household, and a partner may still rely on your income or your super.

Moneysmart frames the amount as a gap: what the people left behind would need, less what they would already receive from super, savings, investments, paid leave and family (Moneysmart, July 2026). That gap can shrink as debts are paid and savings grow, which is why the question looks different at 58 than it did at 40. Our five illustrative scenarios on how much life insurance a household needs show how the gap is worked out, including one household taking a redundancy in the late fifties.

At what age does life insurance stop in Australia?

There is no single age for every policy, but Moneysmart gives the usual pattern. TPD cover in super usually ends at 65 and life cover in super usually ends at 70. Outside super, TPD cover still usually ends at 65, but life cover may continue for as long as the premiums are paid.

Sources: Moneysmart, insurance through super (September 2026); Moneysmart, income protection (September 2026); Moneysmart, trauma insurance (September 2026). These are usual patterns, not rules. The date your own cover ends is on your annual statement or in the Product Disclosure Statement (PDS).

What happens to insurance in super when you stop work or retire?

For cover in an accumulation super account, the last contribution received starts a clock. By law, super funds cancel insurance on accounts with no contributions for at least 16 months, and the fund contacts the member before the cover ends. Cover can also stop if the balance is too low, if the money moves to another fund, or when an age limit is reached (Moneysmart, September 2026).

Retirement is also when money tends to move. The ATO says super can be withdrawn on turning 65, even while still working, or on reaching preservation age and retiring (ATO, conditions of release). Consolidating accounts or closing one can take the insurance with it, and so can moving a whole balance into a retirement income account. Moneysmart suggests checking insurance before changing funds or closing an account, because someone over 60 or with a pre-existing medical condition may not be able to get the cover they want. To keep cover on an account that has stopped receiving contributions, Moneysmart says to tell the fund or add money to the account.

For public servants, the same question can arrive with a late-career redundancy. Scenario 5 of our illustrative scenarios walks through that household, and taking a redundancy at 60, 65 or past Age Pension age covers the tax and super side of leaving at that age.

Why do premiums matter more close to retirement?

Premiums generally rise as you get older, and cover held in super is generally paid from the super balance. Moneysmart notes that this can matter more close to retirement, because there is less time for the balance to recover.

How fast the cost climbs depends on the premium type. Age-stepped premiums are recalculated at each renewal based on age; variable premiums start higher, but changes are not based on age, so increases generally happen more slowly. Neither is guaranteed, and both can change each year (Moneysmart, July 2026). Anyone with more than one super account may also be paying for more than one policy, and, depending on the policies, may not be able to claim the full benefit from both (Moneysmart, September 2026).

What changes for TPD and income protection in your late 50s?

Both have limits that start to matter at this age. TPD cover usually ends at 65 whether it is held inside or outside super, and income protection usually replaces a percentage of pre-tax income, based on earnings in the 12 months before the illness or injury. A TPD payout from super may be taxed at up to 22% if the person is under 60, so it may not match the amount of cover they think they have (Moneysmart).

The definition in the policy decides whether a TPD claim is paid. Moneysmart (July 2026) describes three: unable to work again in your own occupation, unable to work in any occupation suited to your education, training or experience, or permanently unable to perform some basic activities of daily living. For someone who has stopped paid work, the useful questions are which definition would apply to them and what an income protection benefit would be measured against. Our guide to how TPD definitions work at claim time goes further.

How is life insurance paid from super taxed if your children are adults?

It depends on whether the person receiving it is a dependant under tax law. The ATO says a lump sum death benefit paid to a dependant is tax-free. Under tax law a dependant includes a spouse or former spouse, a child under 18, a person financially dependent on the deceased and a person in an interdependency relationship, so an adult child who supports themselves is usually a non-dependant. For a non-dependant, the taxable component is taxed at up to 15% on the taxed element and up to 30% on the untaxed element (ATO maximum rates, excluding the Medicare levy).

Age 25 matters for a different rule. The ATO says a child can receive a death benefit as an income stream only if they are under 18, or under 25 and financially dependent on the deceased or permanently disabled. Unless the child has a permanent disability, the income stream must stop by age 25 and the rest is paid as a tax-free lump sum.

Insurance proceeds can increase that tax. The ATO explains that where a fund claims tax deductions for insurance premiums, the untaxed element of a death benefit paid to a non-dependant is increased to reflect the insurance component. Super law is wider than tax law here: a fund can, subject to its rules, pay a death benefit to a child of any age, but that does not make an adult child a dependant for tax. The rates are in the ATO’s super lump sum tax table. The tax on a particular benefit is a question for an accountant or tax agent; we are not tax agents.

Who receives the money depends partly on the nomination. Moneysmart reports that ASIC’s 2025 report into how super trustees handle death benefit claims found almost 60% of super members had no beneficiary nominated and only 10% had a binding nomination, which increases the average time it takes to finalise a claim. Some binding nominations lapse, for example after three years, unless renewed (Moneysmart, June 2026).

How the four types of cover fit together is set out on our page on income protection, life and TPD insurance advice in Canberra.