Once you’re 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. You might no longer need 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.
On the other hand, sometimes life insurance can be used as part of an estate plan to help pay estate taxes or to build up a tax-free inheritance for your heirs. Your attorney can help you determine whether it’s wise to maintain your existing life insurance.
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. This is more likely if you are very old or in ill health.
Finally, 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’ll still need homeowner’s insurance, but check with your insurance company to find out if you’re 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’re 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 Medicare kicks in at age 65 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, but after that you’ll 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 might be able to save money with a high-deductible plan.
● Long-Term Care Insurance. Long-term care insurance can be a good investment to help cover nursing home or other expenses if the need arises. While the policies are expensive, the younger you are when you buy a policy, the cheaper the premiums.