Insurance principles can be somewhat contrary to intuitive, which means it’s likely that you misunderstand where insurance makes sense and where it doesn’t. Therefore, you need to think through your insurance needs strategically. The insurance matters become even more complicated in retirement where needs change significantly. It is important to evaluate key insurance products and determine their appropriateness based on your circumstances.
What kind of insurance do you need in retirement?
While it’s important to prepare for financial setbacks in retirement, it doesn’t make sense to buy insurance products without consulting a professional financial advisor. Following are some of the important considerations:
Everyone needs medical care even if someone is in good health. Having regular checkups is an essential part of living a healthy long life. Besides, there is no way you can predict injuries and accidents. The average Canadian pays $5789 in a year for public health care. The cost of medical care is so high that even a minor accident can put you through financial difficulties. To get the most out of your retirement, it’s essential to ensure good health, and a health insurance plan can certainly help. Consult a financial planner to help you choose the right product that suits your health needs.
Life insurance is a great product for people who are working and have a family to support. However, it is probably not an ideal solution for retirees. There are some circumstances when life insurance can make sense. For example, when you have a good pension that your spouse is largely dependent on and the payouts to your partner will be reduced significantly when you pass away. Another example is when you have a family house that you want to pass on to your loved ones but you don’t have the resources to pay the capital gain tax. Life insurance can also be used to pay off the debt in retirement.
Long-term care insurance
People buy long-term care insurance and start paying premiums when they are relatively young. The objective is to help cover care costs that are likely to occur in the later part of life. If you meet an accident and become incapacitated, how would you manage your finances? It could be more than funeral costs, a huge liability on your family. This is where long-term care insurance can help you deal with financial catastrophes.
Estimates place your odds of requiring long-term care at 50%. However, LTCI in Canada doesn’t align well with the government support. You may not be weak or sick enough to qualify for the long-term care insurance payouts when you need financial help to deal with your retirement affairs. When you qualify for LCTI payouts, you are probably ready to move into a subsidized nursing home, in which case government will cover your expenses. Again, you should consult a financial planner to figure out the best insurance solutions.
Kewcorp Financial, as the name suggests, is a financial company that helps individuals choose the right insurance products, plan and prepare financially for retirement. We analyze your current financial situation based on certain variables and propose practical solutions. Call us to learn more about our financial expertise!