by Shannon Casey
When you enter retirement, there are a number of fun things to think about: new hobbies, vacations and additional time with friends and family. On the other hand, you also need to look into each of your insurance policies.
Whether you want to admit it to yourself or not, you’re getting older, so health insurance is becoming increasingly necessary. With tons of insurance information floating around the blogosphere, you’re not really sure what is fact and what is fiction. The good news is that insuring yourself in retirement doesn’t have to be a hassle. Both laws and discounts can work in your favor.
Please note that the acts mentioned below are United States specific. The other recommendations apply to retirees in every country.
Health insurance can get tricky once you enter retirement. Given today’s economic climate, it’s unlikely you can continue on your past employer’s health plan. However, thanks to the Consolidated Omnibus Budget Reconciliation Act, or COBRA, you can keep that medical coverage for 18 months into retirement. Keep in mind that expenses will change once you’re no longer employed. While COBRA will keep you insured, your employer will no longer pay a portion of your premium. Plus, you might have to pay additional fees.
After the first year and a half of retirement, of course, COBRA is no longer of use to you. If you’re more than 65 years old, you can go on Medicare. If you have yet to hit that age, you need to find your own individual insurance policy.
Now that the Affordable Care Act is in effect, you can’t be denied for a pre-existing condition. Plus, you can shop for an affordable plan through a state-run exchange, and all preventive care is free for insured individuals. Don’t worry about having to change physicians, either. You’ll still have the freedom to choose your own doctor.
Health Insurance: Protecting Well-being
One of the most critical insurance needs for retirees is comprehensive health coverage. As people age, the likelihood of health issues and medical expenses tends to increase. Medicare, the federal health insurance program for individuals aged 65 and older, forms the foundation of healthcare coverage for retirees. However, it’s important to understand that Medicare alone may not cover all medical costs.
Supplemental insurance, such as Medigap policies or Medicare Advantage plans, can help fill the gaps and reduce out-of-pocket expenses, including prescription drugs, dental care, and vision services. By ensuring adequate health insurance coverage, retirees can prioritize their well-being without the fear of exorbitant medical bills.
Long-Term Care Insurance: Protecting Independence
Long-term care insurance has become increasingly important for today’s retirees. With longer life expectancy, the chances of needing assistance with daily activities, such as bathing, dressing, or medication management, also increase. Long-term care insurance provides coverage for services needed in nursing homes, assisted living facilities, or even in one’s own home.
By planning for long-term care expenses, retirees can preserve their independence and avoid depleting their savings or burdening their loved ones financially. It’s advisable to obtain long-term care insurance while in good health, as premiums increase significantly with age or if pre-existing conditions are present.
Life Insurance: Protecting Loved Ones
Life insurance continues to be an essential consideration for retirees, especially those who still have financial dependents or outstanding debts. The death benefit from a life insurance policy can provide a financial cushion to surviving loved ones, enabling them to cover funeral expenses, settle outstanding debts, or maintain their standard of living.
Retirees should evaluate their life insurance needs based on their specific circumstances, considering factors such as the financial well-being of their dependents, existing assets, and any outstanding mortgage or loans. Term life insurance or permanent life insurance, such as whole or universal life, are popular options to explore, depending on the retiree’s goals and budget.
One of the perks that come with retirement is that you may be done paying off your mortgage. However, don’t blow off homeowners insurance just because you’re no longer required to carry it by a lender. You’ll still want coverage for your house in case of a fire or other covered peril. And you want protection in case the contents of the home are destroyed or damaged, not to mention a hand if someone is injured on your property.
In fact, protecting one of your biggest investments – your house – is particularly important now that you’re on a fixed income. But there is good news about your retirement and your home insurance. You might even be able to snag a less expensive premium as some providers offer special discounts for retirees and seniors. Discounts vary widely according to state and carrier, so call a home insurance agent to ask about savings opportunities.
Much like the price for home insurance, your auto insurance premium might also go down once you enter retirement. Discounts open up to you that may not have been previously available. Now that you’re no longer working a grueling 9-5 job, find the time to take a defensive driving course. Many providers are happy to provide rewards for responsible drivers. Another advantage of retirement is that you probably aren’t driving a commute each morning anymore. Your reduced weekly mileage can also potentially score you a discount. Years of good driving also can contribute to lower premiums.
Call your agent to find out more about how retirement will affect your insurance premiums. Ask about home-auto discounts, which could possibly save you hundreds of dollars each year and give you the simplicity of only dealing with one carrier for two services. Do a little homework, and getting yourself insured will be a snap.
This article was contributed by Shannon Casey, writer for HomeInsurance.com. With a background in comedy and playwriting, Shannon branched into blogging and marketing in 2011, writing for several national brands. She graduated from Hampshire College in Amherst, MA, in 2010 with a B.A. in Liberal Arts.