You have spent your entire adult life looking forward to and planning this day. You have contributed to your retirement fund dutifully for years (or maybe not), and now it is finally paying off. In all of your preparations, don’t forget to reevaluate your insurance needs. As you enter this new phase of your life, you may be able to save a little money by checking with your insurance agent.
Here are some things to consider as you reevaluate your insurance needs:
• Does retirement affect my auto insurance?
• Does retirement affect my homeowner’s insurance?
• I’m a snowbird—what do I do with my insurance?
• Do I still need life insurance after I retire?
• Long-term Care Insurance
Does retirement affect my auto insurance?
As you enter retirement, chances are that your driving habits will change dramatically. Instead of driving only as you commute (however long that may have been), now you are using your care for “pleasure use.” Because you are using your car a lot less and in less hostile conditions (traffic jams, stop and go traffic) your insurance will likely go down significantly. Call or come to our office and we will tell you all that you need to know. Here are some ways that you may be able to save some money:
• If you no longer commute, you’ll likely drive significantly less than you used to, now that you’re retired. Less mileage means less time on the road and, in insurance terms, less exposure to risk. If the usage of your car drops from a 50 mile per day / five-day per week commute to ‘pleasure use’, you can reap big savings on your auto policy!
• Another way to save is to complete a Defensive Driver Class. You actually don’t have to be retired to benefit from this. Anyone 55 years or older can take a class and save money on their auto insurance. These classes are offered by AARP as well as other providers in the area for a small fee.
• Adjust your deductible. The higher deductible, the lower your monthly insurance payments. It may pay for you to increase your deductible. (Your deductible is the amount of money you pay after an accident, before the money from the insurance kicks in.)
• If you have an older car or a car that you barely use, but hesitate to sell, give us a call. We can help you evaluate the situation and make a recommendation on how to save insurance dollars while still providing you with adequate protection. Please be sure to give us a call before you decide to drop any coverage.
Does retirement affect my homeowner’s insurance?
As you approach retirement, you may also be approaching another milestone in your life—finally paying off the mortgage! The mortgage company required you to have continual homeowner’s insurance, but now that you are no longer tied to them, you may wonder if you still need to have homeowner’s insurance.
We strongly recommend that you keep your homeowner’s insurance even though you are no longer require to by the mortgage company. It is a huge risk to ever go without insurance on your home. Unless you can easily afford to pay out of pocket for losses or even rebuild your home after a total loss, you should keep your homeowner’s insurance policy.
In fact, it is important to regularly review your policy with an agent to make that the value of your home, rebuilding cost, and personal property are up to date and accurate. Contact us anytime and we will be happy to help you look over your policy to see if any changes need to be made.
I’m a snowbird—what do I do with my insurance?
One of the major advantages of being retired is that you are no longer tied down by a set schedule. You are free to do anything you want, when you want to do it. In fact, if it gets too cold for your liking, you are free to leave town and spend the winter in someplace warm and sunny. What a way to live! The only question is how do you manage your insurance?
As with any questions you may have, contact our office and we will help you find the answer as quickly and efficiently as we can.
If you are simply moving to different areas in Auburn, we can help you without any trouble at all. You will simply need to purchase a policy for each of your homes.
If you are traveling out of state, things get a little trickier. For example, if you are planning on living in Auburn during the summer and California during the winter, you will need to find an insurance agent in California to insure your home while you are there. To find an agent, give us a call. We can recommend agents in all 50 states.
Luckily, you will not need to make any major changes to your auto policy to accommodate your new lifestyle. We can help you make sure that your coverage meets with all the requirements of your secondary residence, and then you are set. If you are planning on leaving any vehicles at your primary residence that you know won’t be driven, we can pare down the coverage a little to save you so me money.
Do I still need life insurance after I retire?
Unfortunately, the answer is not easy and depends on you and your family’s individual status. Sit down and answer the following questions:
• If you passed away, would your spouse have to make significant restrictions to the current lifestyle?
• Are you currently working part-time, which would be an additional loss of income?
• Are your debts paid off?
• Are your funeral expenses covered?
• Is your estate of a size that would trigger a tax burden to your family if you died?
• What’s the status of your retirement savings? Do you have enough savings to provide for your spouse for another 10, 20, 30 years?
It is important to remember that if you decide to renew your life insurance policy at this stage in your life, your rate will increase substantially. To save a little money, you can opt to purchase the minimum amount of coverage for as short a term as possible.
None of this applies if you have whole life insurance. Permanent or whole life insurance remains active until you pass away.
You may consider meeting with a financial planner to determine what is best for your beneficiaries. Since a
life insurance policy should never be treated as a savings account, a financial planner will be able to help you optimize your investments.
Long-Term Care Insurance
More and more retires are deciding to move into Assisted Living Centers or Nursing homes each year. Although you would like to spend the last years of your life living a fully active life, the fact is that may not be the case. A simple injury could make it impossible to live on your own.
There are so many options to consider when planning for long-term care. You may decide to you want anything from hourly in-home health care help ro full-time nursing home care. As with anything, the price options are just as varied and need to be considered when coming to a decision.
Unfortunately, long-term care is generally not covered by health insurance. You will be responsible to pay for these expenses out of pocket. So, as with all issues in your retirement, this will take some planning and the earlier you start, the better.
Some questions you may want to consider as you make your decision include:
• Will your family play a role in your care? If so, you will want to talk to them so they know your wishes.
• Will you really need long-term care? Is there a family history of chronic diseases?
• Are you married? You may need to plan for both spouses to have care.
• Do you own a home? When the time comes you may be ale to sell the house to pay for your care (assuming that there is no one else using the house)
• Do you have sufficient assets or investments to cover the cost of care yourself?
This topic does not lend itself to an easy answer. But with a little research and planning ahead of time, you can start your well-deserved retirement with peace of mind. Contact Resource Insurance Group today and let us help you to answer your important questions and arrange the best possible insurance options for you.