Should you check your insurance coverage when you retire?

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After years of planning, your long-awaited retirement is just around the corner. You’ve thought of everything, including a few trips and other well-earned dreams soon to be turned into reality. But did you look over your insurance coverage? No? Then let’s see how this important step can impact your life, from your health to your car.

First, a few questions to ask yourself

Before you lump all your coverages together, it may be wise to analyze each one. Will they all meet your needs when you retire?

Let’s now ask some questions to determine what kind of scenario you can expect once you’re retired.

Do you have a group insurance plan?

If you do

You can consider yourself among the fortunate ones.

Check what your plan would cover during your retirement. If you think the coverage is not enough, you can take out individual insurance for more complete coverage.

If you don’t

First option: if your spouse has group insurance, see if you can be covered under that plan.

If not, the Public Prescription Drug Insurance Plan will cover certain expenses.

For the rest, you can shop around for extended life and health insurance.

Life insurance

Is life insurance necessary when I retire? The answer to that question is not as simple as it seems. It depends on your needs and what you intend to leave for your loved ones upon your death.

The primary goal of this coverage is not to leave your loved ones stuck paying off your debts and taxes when you die. There are funeral fees, your mortgage loan (if applicable), your car loan, your credit card balances, etc. Add them all up and it can be quite a hefty sum to saddle your loved ones with.

Without life insurance, will one spouse’s income alone suffice to maintain the same lifestyle?

Have a group insurance plan? Check if it includes life insurance. It usually includes term insurance that remains in force as long as you’re working, and calculated according to a percentage of your salary.

There is a Plan B, however, in which you can convert your group life insurance into individual insurance. This way you’ll avoid having to take any medical tests to get the coverage. This conversion also allows you to lock in the price of your insurance for the rest of your life.

When the price is determined by your age

Did you know that the price for life insurance is calculated based on several factors, including your age? It’s therefore in your best interest to take out this type of coverage as soon as possible, while you’re in good health.

The longer you wait, the more likely you are to pay more for your life insurance, especially since there's no way to tell what type of health issues you may have in the future that could complicate your access to insurance.

Pay attention to the insurance amount! It may be lower once you retire. It can also decrease once you reach a certain age, 75 years old for example.

Health and critical illness insurance

After years of being covered under your group insurance plan, you may rely even more on health services once you retire. And the older you get, the higher your prescription drug bills are likely to be.

Of course you can always turn to the Public Prescription Drug Insurance Plan to cover a portion of the cost.

But have you considered taking out health or critical illness insurance in addition to the public plan?

Health insurance covers:

  • Medication not covered under the Public Prescription Drug Insurance Plan
  • Fees for healthcare professional
  • Hospitalization expenses
  • Cost of examinations and diagnoses
  • Transportation by ambulance
  • Vision care (extra)
  • Dental care (extra)
  • Etc.

As to critical illness insurance, it pays a lump sum amount 30 days post-diagnosis of a critical illness covered by the policy.

Check if your group insurance provider can cover your healthcare expenses during your retirement. The rates are usually good and you won’t need to take medical tests to be covered. Reassuring to know when you get nicked up here and there!

To get the coverage, you must apply within a certain period after your group insurance ends. This period can vary from 30 to 90 days depending on the insurer. Then medical tests may be required, and the price for your coverage is likely to increase.

Travel insurance

If there’s one type of coverage that becomes more important at this stage of your life, it’s travel insurance! If you consider yourself a globetrotter, you can count on this type of insurance as it covers:

  • Trip cancellation or interruption expenses
  • Emergency medical care
  • Repatriation home

Often included in many retirement plans, it also comes with an assistance service to guide you when you’re abroad.

Before you go on vacation, check the maximum number of coverage days.

Car insurance

When it comes to your car insurance, your new reality should dictate the type of coverage you get and what should be included in your contract.

  • Will you drive less?
  • Plan on moving?
  • Will you be changing cars?
  • Will you travel to the US more often, where a $2 million civil liability insurance policy is required?

Take the time you need to review your coverage with your insurer so they can meet your new needs.

You can also get a few discounts if you’re in any of the following situations:

  • You bundle your car and home insurance.
  • You’re part of a retirees’ organization or association
  • You haven’t made any claims recently
  • Your car is equipped with a tracking system

Home insurance

Pay special attention to the civil liability coverage included with your home insurance. Make sure the amount is sufficient if you ever need to make a compensation payment after getting sued.

Whether you’re liable or it’s a question of negligence, you’ll be covered for injuries and damage caused on your property and even elsewhere.

Here are a few possible scenarios:

  • Inspired by Picasso and pointy rock in hand, your grandson lets his creative side run wild on your neighbour’s convertible. The latter must now have the car repaired before rust sets in and would like to send you the bill. 
  • You injure someone with a stray golf ball while in the US.
  • You cause water damage to a cottage you rented for a weekend.

Check what’s covered with your insurer. They’ll suggest what’s best for your current needs.

Make your own way

You probably guessed it, there’s no one-size-fits-all solution when it comes to planning for your insurance when you retire.

What should you do? List all the coverages you have. Contact your car and home insurer and our financial advisors. Together, you can establish your needs and develop a plan that includes full coverage for your new reality.