Insurance for Retirement

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Last Updated: November 10, 2021

As you prepare for and begin your retirement, give your personal insurance protection plan a review. Adapting your insurance to your new status as a retiree will set you up for the future.

The most obvious insurance retirees need to maintain is health insurance. Make sure you understand your Medicare obligations and options before you become eligible. Life and disability income insurance needs may change if you are no longer responsible for dependents. 

You need to consider your individual circumstances and life goals.


If you have recently retired and your driving habits have significantly changed​​, contact your insurance agency. Informing your insurance agent or company that you're no longer commuting and driving fewer miles may reduce your car insurance rates. 

If you have adult children who return to living with you, you may need to add them to your policy, even if they have their own vehicle and insurance. Check with your agent.​

To reduce your rates, you can also take a defensive driving course. Some insurers give discounted rates to older adults, usually ages 55 and up, who complete these classes. AARP and AAA are among the groups that offer the courses.

​If you plan to travel in retirement you may need more or different coverage. If you plan to rent cars in other countries, you might need international liability protection. Most standard car insurance policies don’t cover you when driving abroad. You could be covered through your credit card or trip insurance policies. But those options might not provide enough coverage depending on what country you are traveling in and the severity of the accident. Ask your agent if you have enough liability protection to cover your assets no matter where you travel.​
 

Medicare is the federal government's health insurance program primarily for people 65 and older. You can sign up during a seven-month window, starting three months before your 65th birthday. Learn about the different parts of the program at Medicare.gov . Make sure you meet the deadline for the enrollment period or you will pay a higher price for Medicare if you enroll late. 

Keep in mind that Medicare doesn't cover 100% of medical costs. Retirees should consider purchasing a supplemental plan​, such as Mediga​p ​​ and Part D coverage, to help pay for services not fully covered by Original Medicare. Using a Medicare Advantage Plan, offered by private insurers, is another way to fill in coverage gaps.

​Again, pay close attention to when you need to sign up. Medicare may impose a penalty if you don't sign up for Medicare Part B and Part D when initially eligible. 

Marketplace/ACA 

If you’re retired and do not have Medicare, you can use the Marketplace to buy an insurance plan. If you retire before you're 65 and lose your job-based health plan, you can use the Health Insurance Marketplace to buy a plan.

Find out if your homeowners insurance company offers discounts to retirees. Because retirees are at home more often, insurers may determine there is a reduced risk of burglary, fire and other problems. 

If you have valuable items such as antiques, art, or jewelry, ask your insurance agent about an endorsement policy to make sure you are fully covered. 

Travel could impact homeowners insurance. If you're going to live in a different state or country for a few months and your home will be vacant, you'll need to get an endorsement to your policy. You should also talk to your insurer about the proper coverage if you plan to rent out your home through a home sharing service.

Disability income insurance is designed to compensate insured individuals for a portion of the income they lose because of a disabling injury or illness. There is long-term disability income insurance and short-term income insurance: 

  • ​Long-term policies provide a weekly or monthly income benefit for more than five years for individual coverage and more than one year for group coverage for full or partial disability arising from accident or sickness.

  • Short-term policies provide a weekly or monthly income benefit for up to five years for individual coverage and up to one year for group coverage for full or partial disability arising from accident or sickness.

Once you have retired and are not working at all, disability insurance is no longer needed. To continue most disability policies, you typically need to work 30 hours a week. After retirement you should be able to use your retirement benefits and assets instead of relying on disability coverage. ​

Talk to your insurance agent about reviewing your current insurance needs. 

Retirement is the time to reevaluate your life insurance coverage. Life insurance is designed to protect family members from the loss of income if a primary wage earner were to die.​ It's important to evaluate your specific circumstances. 

  • If your kids are grown, your mortgage is paid off, and you have enough retirement savings to support you and your spouse, you may not need life insurance.

  • ​But, if you are approaching retirement and still have significant debts, then maintaining life insurance can protect your spouse or loved ones in the event of your death. 

If you have retirement accounts and qualify to recieve Social Security benefits, your family will continue to receive payments from these accounts. Survivor benefits vary based on your particular situation​ and will not be as much as while you were alive. Make sure you know your benefit before making any decision on life insurance. 

To determine your specific life insurance needs after retirement it is best to talk to a financial planner.  ​