Along with many other changes, your insurance needs change when you retire. It is a good idea to look at your insurance options and figure out what you need or don’t need and where you might be able to achieve some savings.
- Life Insurance. Once you retire, you may no longer need life insurance. If your spouse or other dependents won’t lose any income when you die, life insurance isn’t necessary. However, sometimes life insurance can be used as part of an estate plan to help pay estate taxes. Consult with an estate planning attorney to determine if you need life insurance for that purpose. To find an attorney near you, click here.
- Homeowner’s Insurance. As long as you aren’t selling 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 may 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 insurance companies offer discounts to drivers between the ages of 55 and 70. In addition, you may be able to save on premiums if you are no longer commuting every day.
- Health Insurance. If you retire before Medicare kicks in at age 65 and your employer doesn’t offer retiree health benefits, you will need to buy health insurance. You may be able to stay on your company’s policy for up to 18 months through COBRA, but after that you will have to find an individual policy. Check with your state insurance department because some states provide assistance with purchasing policies. In addition, some professional organizations offer health insurance. Health insurance premiums are often expensive, but you may be able to save money with a high-deductible plan. (If you plan on retiring after age 65, click here for information on coordinating employer coverage with Medicare.)
- Long-Term Care Insurance. Long-term care insurance can be a good investment to help cover nursing home or other long-term care expenses if the need arises. While the policies are expensive, the younger you are when you buy a policy, the cheaper the premiums. For more information, click here.