Insurance for Retirement: What Changes at 65

Retirement changes your insurance picture more than any event since your children were born, and it happens on a schedule. On your last day of work, group health, dental and disability coverage typically stop. At 65, the Ontario Drug Benefit starts. Somewhere in the same window your term life policy may be expiring, your conversion privilege may be closing, and your travel insurer starts asking about your medications.

I’ve helped clients through this transition for close to three decades, and the ones who do it well decide each piece a year or two before they retire, while they still have group benefits to fall back on and their health class is at its best. This guide is organized around three lists: what ends, what starts, and what you need to decide. It’s written for Ontarians within a few years of retirement on either side.

What ends, what starts: the short version

Coverage	What happens at retirement or 65	What to do
Group health and dental	Usually ends at retirement (some employers offer a retiree plan)	Replace with an individual plan or the retiree plan
Group life insurance	Ends at retirement; some plans allow conversion within 31 days	Decide whether you need any life coverage
Disability insurance	Group LTD ends at retirement or 65; individual policies usually pay to 65	Cancel when you stop working
Personal term life	Continues until the term ends; conversion deadline often 65–75	Renew, convert, replace or lapse (see below)
Critical illness	Continues per policy; many expire at 75	Keep if affordable; rarely worth buying new after 65
Ontario Drug Benefit	Starts at 65	Automatic with a valid health card; check which drugs are on the formulary
Canadian Dental Care Plan	Available to eligible seniors without private dental coverage, below an income threshold	Check eligibility; may reduce need for private dental
OHIP travel coverage	Unchanged: very small amounts outside Canada	Buy travel medical for every trip

Coverage that ends: benefits, disability, and group life

Group health and dental. For most employees, the plan ends on the last day of work. Some large employers, and the federal public service through the PSHCP, offer retiree health plans; if you’re in Ottawa there’s a good chance this applies to you, so get the details from your pension administrator early. Many private-sector plans offer nothing after retirement, though a portion give you a short window (often 31 to 60 days) to convert to an individual plan with no medical questions. That window matters if you have a condition a new insurer would exclude.

Disability insurance. Group long-term disability ends at retirement or 65, whichever is first, and individual policies generally pay benefits to 65. Once you’re no longer earning, there’s nothing to insure. Cancel the individual policy the month you retire, not earlier: a disability at 62 still costs three years of income and savings.

Group life insurance. Typically 1–2× salary, and it ends with employment. Some plans allow conversion to an individual policy without medical evidence within 31 days. It’s rarely cheap, but if your health has deteriorated and you still need coverage, it can be the only door open. See replacing group benefits when you leave a job; the mechanics are the same at retirement.

Coverage that starts: the Ontario Drug Benefit and CDCP

At 65, Ontarians with a valid health card are automatically covered by the Ontario Drug Benefit for prescription drugs on the provincial formulary. There’s a modest annual deductible and a small per-prescription co-payment; lower-income seniors can apply for a reduced co-payment and no deductible. For most retirees this covers the majority of routine prescriptions.

What ODB does not cover is the list to plan around: dental, vision, hearing aids, physiotherapy, massage, chiropractic, psychology, private or semi-private hospital rooms, medical equipment, and any drug not on the formulary. Our article on what OHIP doesn’t cover covers the full picture, and prescription drug coverage in Ontario explains how ODB, Trillium and private plans fit together.

The federal Canadian Dental Care Plan covers a share of dental costs for eligible seniors without private dental insurance, subject to a family income threshold. If you qualify, it may reduce (though not usually eliminate) the case for a private dental plan. Check the current eligibility rules.

Health and dental in retirement: filling the gap

With ODB handling most prescriptions, an individual health and dental plan in retirement is mainly about dental, vision, paramedical services, hearing aids, and drugs off the formulary. A few things to know:

• Retiree plans through a former employer are worth comparing against individual plans; they’re not always the better deal, but they may accept conditions an individual insurer wouldn’t.
• Guaranteed-acceptance plans exist for people who can’t pass medical questions; they cost more and limit coverage in the early years, but they’re a real option. See guaranteed acceptance health insurance.
• Indicative cost: a basic individual plan for a retired couple in Ontario commonly runs roughly $150–$350 a month depending on dental and paramedical limits, insurer and any conversion privileges. That’s illustrative; plan design drives the price.

Our guide to health and dental insurance for retirees in Ontario goes deeper, and our retiree benefits case study walks through an illustrative example.

Life insurance in retirement: keep it, convert it, or let it go

Most retirees can let life insurance go, and I say that as someone whose business sells it. Once the mortgage is paid, the children are independent and your spouse would be secure on savings and pension survivor benefits, the original reason has passed.

The reasons to keep or buy coverage in retirement are specific:

1. A tax bill at death. A cottage or rental property carries a capital gain that’s taxed on death (or on the second death for couples). An RRSP or RRIF is fully taxed as income in the final year unless it rolls to a spouse. Business shares may carry a gain too. Ontario’s Estate Administration Tax adds roughly 1.5% on estate value above $50,000. A permanent policy pays a tax-free benefit to named beneficiaries, outside probate, at the moment the bill is due. We explain the mechanics in how life insurance fits into estate planning.
2. A dependent spouse or adult child. If your pension’s survivor benefit would leave your spouse short, or you support an adult child with a disability, coverage still has a job.
3. Final expenses. If you’d rather not have your estate absorb a funeral and the paperwork costs, a small policy handles it. See final expense insurance in Canada.
4. A legacy or charitable gift. Some people use a policy to leave a defined amount to grandchildren or a charity without touching what their spouse needs.

If one of those applies, your options at 65 are: convert an existing term policy to permanent (no medical, inside the conversion window), a new whole life or Term-100 policy if your health qualifies, or a simplified or guaranteed-issue policy for smaller amounts if it doesn’t. Guaranteed-issue policies ask no health questions but usually cap coverage at modest amounts and pay only a return of premiums if death occurs from natural causes in the first two years. Read life insurance for seniors in Canada for the full comparison, and confirm the tax side with your accountant.

Indicatively, a healthy 65-year-old non-smoker might pay roughly $60–$130 a month for $25,000 of simplified-issue final expense coverage, and materially more per $100,000 for a permanent policy; premiums depend heavily on health, sex and insurer.

Travel insurance becomes a line in the budget

For working-age people, travel medical insurance is often an afterthought. For retirees it becomes an annual cost that deserves the same attention as car insurance.

Why it changes at 65:

• Price is driven by age and health. Premiums rise every few years, and most insurers require a medical questionnaire from around 60 onward. Answer it carefully; an error can void a claim.
• Stability clauses. A condition that changed (new diagnosis, new prescription, dosage change, pending test) in the 90 to 180 days before departure is often excluded. Time medication changes around trips where you can. See travel insurance with pre-existing conditions.
• OHIP residency. To keep OHIP, you generally must be physically present in Ontario for at least 153 days in any 12-month period, so a full winter away is fine, but check the rule before extending.
• Annual vs. single-trip. If you take several short trips a year, an annual multi-trip plan is usually cheaper; a five-month snowbird stay needs a single-trip policy sized to the full duration. We cover the details in travel insurance for snowbirds in Ontario and travel insurance for seniors.

Indicative cost for a healthy 65-year-old: roughly $300–$800 a year for an annual multi-trip plan (30-day trips), and roughly $1,500–$4,000 or more for a single five-month U.S. winter. Pre-existing conditions can push these well higher.

Critical illness and long-term care: an honest note

If you bought critical illness insurance in your 40s or 50s, keep it if it’s affordable; many policies run to 75, and this is the age band where claims are most common. Buying new CI coverage after 65 is expensive and often restricted in amount and term, so it’s rarely the right move for a retiree on a fixed income.

Long-term care insurance, which pays toward home care or a care facility, is available from only a small number of Canadian insurers. For most Ontario families, the practical plan for care costs is savings, home equity and the provincial system, with insurance playing a limited role. If you want to explore it, we’ll tell you what’s available and be honest if it doesn’t fit.

A retirement insurance checklist

Work through this in the year before you retire:

• Confirm when group health, dental, life and disability end, and whether a retiree plan or conversion window exists
• Register for ODB at 65 (automatic in most cases) and review which of your prescriptions are on the formulary
• Check Canadian Dental Care Plan eligibility
• Price an individual or retiree health and dental plan
• Decide whether life insurance still has a job; if yes, act before the conversion deadline
• Cancel individual disability insurance the month you stop working
• Update beneficiaries on every policy, RRIF and TFSA; see how to choose a beneficiary
• Set up travel medical coverage, annual or per trip, and note stability clause windows
• Review the will and estate plan with a lawyer; our estate planning basics for Ontario families is a starting point

How Hayes can help

Retirement is when a broker who sells nothing you don’t need is worth the most. We’ll read your group benefits booklet, tell you what ends and when, price the replacements from 30+ Canadian insurers, and give you a straight answer on whether to keep your life insurance. Our advice is free; the insurer pays us.

Hayes Family Insurance is an independent, family-run brokerage in Ottawa, licensed across Ontario, and we work with clients province-wide by phone, video and e-signature. Compare quotes in about two minutes, or contact us to book a pre-retirement review.