How Does Retirement Affect My Insurance?

As you step into retirement, give your personal protection plan a quick review: Adapting your personal insurance to your new status as a retiree may not only save you money, but will also set you up for the future.

Auto Insurance

If you recently retired, give us a call so we can adjust your auto policy. Here’s what to look out for:

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 five-day per week commute to ‘pleasure use’, you can reap big savings on your auto policy!
Adjust your deductible. The higher deductible, the lower your monthly insurance payments. It may pay for you to increase your deductible.
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.

As you re-evaluate your auto insurance during retirement, please be very careful to keep adequate liability limits on your policy.

Homeowner’s Insurance

It is true that a lender requires you to have homeowner’s insurance, and that requirement does no longer apply when your mortgage is paid off. But unless you can easily afford to pay out of pocket for losses or even rebuild your home after a total loss, you should never consider dropping your homeowner’s insurance.

In addition, it is important to regularly review your homeowner’s policy to ensure that the value of your home, rebuilding cost, and value of your personal property are still adequately reflected. And if your policy hasn’t been reviewed since you signed the mortgage documents, it’s to schedule an appointment!

Snowbirding?

What happens to what your house, car, and assets when you travel down south for the winter?

Home Insurance: Your primary residence is the residence that you spend most of the year in. Let’s say this is in Nova Scotia—it needs to be insured in Nova Scotia by a company that is licensed there. If you rent or purchase a second home in Florida, it needs to be insured there.
Auto Insurance: If you own one or more cars at your primary residence in Nova Scotia, they need to be insured in Nova Scotia (with the option to pare down the insurance while away). If you drive your car from Nova Scotia to Florida and use it there, your Nova Scotia auto insurance policy will extend while you are away. If you purchase a car in Florida and intend to leave it tbere while you’re home, you’ll need to obtain registration and insurance for this car in Florida.
Umbrella Insurance: If you carry umbrella insurance in your home province, the policy will extend to cover the underlying policies no matter where you are. It will not apply for homes and cars purchased, registered and insured out-of-province.

Life Insurance

Do you still need life insurance after you retire Unfortunately, the answer is not simple and often depends on you and your family dynamic. 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?

Keep in mind that life insurance rates increase with age. If you had a term life insurance policy and find that you need to continue your life insurance during retirement, you will likely have to renew your policy. Be prepared for your life insurance rates at this stage in life. However, none of this applies to you if you have whole life insurance. This life insurance remains active until you pass away.

A word of caution: we don’t recommend treating a life insurance policy as a savings plan for your beneficiaries. Consider a meeting with a financial planner for ways to optimize the investment of your money.

Long-Term Care

More and more retirees are opting to live in an assisted living community or nursing home as they get older. In order to plan your retirement and get your affairs in order, you might consider long term care insurance.

As with everything that’s related to retirement, it helps to start planning early. Long-term care is not covered by your standard health insurance policy, which is when long-term care insurance comes into play. It can protect your assets and your savings.