What Types of Insurance Plans Do Seniors Need?
The golden years of retirement bring about much change in a person’s life, from more opportunities for relaxation to a changing insurance plan.
As you reach 65 years of age, it’s time to reassess your coverage options.
Most people are only able to save 12% of the recommended retirement savings. This makes it more important than ever to put a proper insurance plan in place. It will help to protect yourself, your assets, and your loved ones.
Let’s take a look at the types of insurance plans you’ll need to consider.
Medical Insurance
The costs of health insurance after retirement tend to increase. So it’s smart to have extra medical insurance coverage to protect your health.
The Affordable Care Act ensures that each person carries a type of medical insurance. The act also protects seniors with pre-existing health concerns. It does not allow them to get turned down by insurance companies.
A private medical insurance plan can help with doctor’s appointments to assisted living. Those recently retired from work may even qualify for insurance through their employer. An example of this is the COBRA program.
If private insurance is not an option, you can qualify for Medicare at the age of 65.
What You Need to Know About Medicare
For those who are no longer working or receiving private insurance, they may qualify for Medicare. It’s funded by the government, with over 49 million people in America relying on it. It’s important to note that Medicare covers much less than other forms of insurance after retirement.
When considering Medicare, you’ll want to apply as soon as eligible. Or you may be subject to a late fee. To avoid this, you’ll need to enroll 3 months prior or 3 months after your 65th birthday.
Medicare insurance for retirees offers different coverage, for doctors appointments, hospitalization, and prescriptions. You can also combine coverage for doctor and hospital visits.
Insurance companies also offer supplemental plans for health insurance. Medigap is an example and offers over 10 different levels of plan coverage. It can help with deductibles and co-payments that Medicare does not cover.
Medicaid is another option for those with lower incomes or disabilities. It can sometimes get combined with Medicare coverage as well.
Homeowner’s Insurance
This type of insurance is essential for protecting your property and your possessions.
Homeowners and renters should have some type of liability coverage plan in place. Here’s more on tips for selecting the right renter’s insurance policy.
Those who have many valuable possessions may want to add extra coverage to their policy. This includes expensive artwork, fine jewelry, and priceless family heirlooms.
Some people use their property to help pay for senior care. It works through home equity, selling the home, or applying for a reversed mortgage.
Bundling insurance plans with the same provider can save you more money. Seniors are able to combine life, medical, home, and auto insurance.
Car Insurance
This is a must for anyone who owns a motor vehicle. It protects seniors that drive from accidents and vehicle damage.
Expect big changes in costs of car insurance after retirement. Prices fluctuate a great deal from your 60’s into your 70’s.
Those who are 55 to 65 pay the lowest rates. A 60-year-old pays an average of 59% less for auto coverage than a 20-year-old. Then rates increase due to statistics in accidents for this age group.
Be sure to check with your car insurance company about discounts for seniors. Lowered rates also get offered for those who take driving safety courses. Drivers with low mileage records can also save more on auto insurance plans.
Many retirees also own an RV and should consider RV insurance. You’ll want extra coverage if the RV doubles as your home and holds all your personal belongings.
Long-Term Care Insurance
These plans can get expensive, as they cover assisted living, home care, or nursing home costs. It provides extra coverage needs that Medicare doesn’t meet.
Premiums have seen a dramatic increase in these types of insurance plans. This can make it unaffordable by the time the individual is ready to retire.
Short-term care policies are often recommended as an alternative. Most plans won’t provide coverage after a year. Yet this is a less expensive option for older seniors.
You can also create a savings account for your health plan. This is a great way to set aside money for health care without getting taxed on your savings.
Veterans benefits also apply to those who have disabilities from their time in the service. This type of disability insurance after age 65 can get used for long-term care. It can even help out family caregivers supporting senior veterans with disabilities.
Life Insurance
This type of insurance ensures that your family gets provided for in the event you pass on. It’s something to consider for helping the family cover loans, the mortgage, and high funeral costs. Life insurance also works to pass along an inheritance.
Some people choose to start their life insurance policy at a younger age, as they become more expensive after you retire.
Plans fall into three categories: term, permanent, and guaranteed universal.
Term policies are the most affordable but subject to fluctuating premiums. Yet they only account for a set amount of years. You’ll need to renew your plan once the term passes.
Permanent or whole policies consist of coverage for your full life. They cost more but guarantee your benefits.
Guaranteed universal policies will cover you until you reach a certain age. This insurance for retirees is often preferred as rates are more stable.
Some life insurance policies will also help with long-term care. Of all the types of insurance plans, look for those that help most to protect those with dependents like Lifenetinsurance.com. Expect rates to vary depending on your plan type, current health, and lifestyle activities.
Umbrella Insurance
You may way to consider umbrella insurance for extra liability coverage. It protects you from costs that fall outside of your standard insurance policies. These types of insurance plans can protect you and your assets in the event you get sued.
To qualify, you need to already have a homeowner or auto insurance policy in place. Most plans provide protection starting at around $1 million in coverage.
It’s a good idea to calculate your net worth when considering how much umbrella insurance you need. You’ll want to take into account your assets, current and potential income, and savings.
How to Choose the Best Types of Insurance Plans
As a senior, you want to select the best types of insurance plans for your budget and lifestyle. It’s key to shop around and do your research to find the best rates. You’ll want to reassess your current plans, and also ask about senior discounts.
It’s best to start saving early on. This will make insurance changes less stressful when you’re ready to retire. You may also want to consider a financial advisor to help you keep track of assets and the best ways to protect them.
Here’s more retirement planning advice on how to care for all the property and possessions you have worked your life for.