Some insurance policies are necessary through all life stages.
Insurance is certainly helpful in adulthood.
Without car insurance, a simple fender bender could prove devastating to any budget.
Home owners insurance is a lifesaver should your basement get flooded, your roof get struck by lightening, or your neighbor boy hit a baseball through the window (think “Dennis the Menace“).
Some insurance coverages like these are only applicable if someone owns specific properties.
Others are beneficial simply because a person is human.
According to a recent US News article titled “The Only Insurance Policies You Need After Retirement,” seniors should carefully consider what insurance they need prior to dropping coverage in retirement.
Although age may be a key factor, other considerations do exist.
People have different goals and circumstances.
These should be taken into account when choosing whether to keep or drop insurance in retirement.
Before you do so, ask what types of insurance are absolutely necessary?
Health care costs are not cheap.
As people age, their bodied tend to wear down and ailments and illness become more common.
Not only is health insurance helpful in paying the for medical costs, it is also required by the Affordable Care Act.
If seniors are still working, they may receive coverage from their employer.
Those age 65 or older are eligible for Medicare.
An Original Medicare plan does not provide coverage for all health care expenses.
Supplemental policies like Medicare Part D or Medigap may be necessary to acquire in addition to an Original Medicare plan.
Alternatively, a Medicare Advantage Plan may be a better option for your needs.
It all depends.
Homeowners or Renters Insurance.
Seniors have to live somewhere.
Often this is either in their own home or in a rented apartment or townhome.
These facts make renters or homeowners insurance policies vital to limiting liability and protecting assets.
If mortgages are still being paid on a property, then the lender will require insurance coverage on the home.
After all, the home is security for the obligation.
Although dropping coverage may be an option after the mortgage is fully paid, it is still wise to keep your insurance policy.
Should something happen to the home, fixing it could deplete savings significantly.
If you have valuable jewelry or other personal property, you will likely need to add a rider to the policy so these items can be insured as well.
Although these policies are necessary for seniors to have, some policies are merely recommended.
What are these?
Having life insurance is essential when a person is working and has a family or spouse depending on the income provided by this individual.
These policies can protect your loved ones from poverty should you die suddenly.
Although it may be tempting to discard your life insurance policy after you retire or your children have graduated and are launched, life insurance can serve as a beneficial estate planning tool.
As an estate planning attorney of some 30 years, I have never had a widowed client complain about the life insurance her husband kept.
Many couples or individuals choose to travel in retirement.
For those going on vacations or visiting loved ones frequently, having the right travel insurance can help with medical emergencies, trip delays, medical evacuations, or cancellations.
Those who have a vehicle will typically be required by state law to have insurance.
If you are still driving, the car should be insured for collisions, as well as liability insurance and uninsured motorist coverage.
Driving skills fade with age and too many of your fellow motorists are “flying naked” without coverage.
Although car and homeowners insurance provides general coverage, sometimes there are limitations.
Accordingly, I would recommend an “Umbrella Policy” as part of your homeowners insurance.
The premiums are affordable and the coverage is key for uncovered liabilities like a slip and fall on your front steps.
In addition, you may have greater risk of liability claims if you volunteer in retirement.
An umbrella policy can provide added coverage.
An annuity can provide a guaranteed income source for the possibility of outliving your retirement savings.
You can make an annuity purchase for a single sum.
Age and purchase price determine monthly payments.
Long-Term Care Insurance.
A Medicare insurance policy will not cover extended stays in a nursing home or assisted living facility.
It also will not cover at-home care.
Although Medicaid provides coverage, it is “means tested” and only available to those who have minimal assets.
For this reason, a long-term care insurance policy can be a wise choice for seniors.
Is there any type of insurance most seniors do not need in retirement?
After a person has retired, they will not need disability insurance to cover their lost income.
Many seniors can drop these types of insurance policies.
Reference: US News (Feb. 27, 2020) “The Only Insurance Policies You Need After Retirement”