Once you are retired, your need for insurance changes. It is a good idea to look at your coverage options and figure out what you need (and don’t need) and where you might be able to achieve some savings.
Life Insurance. If your spouse or other dependents won’t lose any income when you die, life insurance may be unnecessary and your premiums may be better spent elsewhere. If you do choose to drop a policy – whether term or whole life – you might be able to sell the policy and be paid more than its cash surrender value. If you decide to keep your policy, you might be able to exchange it for a new policy with lower premiums or a higher death benefit due to changes in actuarial tables.
Homeowner’s Insurance. As long as you are staying in your home, you will still need homeowner’s insurance, but check with your insurance company to find out if you are entitled to any discounts. You might be eligible for a discount because the house will be occupied more often. If you have enough cash to pay a bigger deductible, you might want to consider raising your deductible in order to save money on the premiums.
Auto Insurance. Check with your insurance company to see if you are entitled to any discounts. Many companies offer discounts to drivers between the ages of 55 and 70. In addition, you might be able to save on premiums if you are no longer commuting every day.
Health Insurance. If you retire before you are eligible for Medicare and your employer doesn’t offer retiree health benefits, you’ll need to buy health insurance. You might be able to stay on your company’s policy for up to 18 months through COBRA. Thereafter, you will have to find an individual policy. Some professional organizations offer group health insurance opportunities. Another alternative to consider is a high-deductible plan. You will be paying more of the “up-front” costs but the monthly premium will be reduced.
Retirement can be an exciting new chapter in your life once these insurance issues have been reviewed and addressed.
Ms. MacDonald’s practice is limited to estate planning, probate, conservatorships, elder law and trust administration. Ms. MacDonald maintains her practice in the Santa Clarita Valley at 27013 Langside Avenue, Suite A in Santa Clarita. She can be reached at 661-251-1300.