Insurance Information & Services for Retirees

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When you retire, you enter a new stage in your life, with different priorities, responsibilities and needs. Consider a few of the things below in evaluating how retirement affects your life insurance needs.

Things you should know about Life Insurance

Your employer-sponsored policy probably won't remain in-force

Many people have life insurance through an employer-sponsored group plan. If you're among them, you should find out what will happen to this coverage when you retire. Can you continue your coverage by converting from the group policy to an individual policy? What steps must you take to do that? Can you continue your coverage without a physical exam? (This may be an important consideration if you are not in good health.) Investigate your options now, so you will not risk any gaps in your life insurance coverage.

Your coverage amount should address your new needs

At any stage of life, the amount of insurance you carry should adequately reflect your financial responsibilities. Take the time to think about whether these responsibilities have changed now that you are retiring. If you still have dependent children or if your savings and investments are not enough to provide a comfortable life for your spouse or dependents after your death, you may need to maintain your current coverage amount or even to increase it. On the other hand, if your children are grown and you have paid off your mortgage, perhaps you should consider reducing the amount of life insurance you carry.

Estate planning issues


If your gross estate, roughly defined as your financial net worth plus life insurance policies you own, is over $6-700,000 for individuals and $1.3-1.4 million for married couples, you may owe substantial estate taxes. These taxes can be over 50% of your estate, making the IRS your biggest beneficiary! Life insurance, especially second to die policies, may be an ideal vehicle for paying estate taxes as it provides immediate cash exactly when it is needed and can be purchased for pennies on the dollar. It is important that the ownership of these policies be structured properly or the effect may be to increase the government's take.

Things you should know about Health Insurance

Evaluate your employer sponsored plans

Most employer sponsored health plans discontinue your coverage on the day your employment ends. Check with your employer about this. You shouldn't go a single day without health coverage.

COBRA may provide coverage

COBRA is the federal law that entitles you to continued coverage in a former employer's group health plan even after you leave the job. If you were insured under an employer sponsored health plan policy prior to your retirement, you and your family may have the legal right to extend your group insurance. The insurance will almost certainly cost more than when you were working, because you'll have to pay the full monthly premium, which may previously have been subsidized by your employer. But you'll be getting the benefit of a group insurance rate, plus broader coverage than you're likely to obtain in an individual policy. You should check with your employer for more specific information, because not all companies are required to provide COBRA benefits.

If you are over 65, you are eligible for Medicare, but read on…

Many medical expenses are not covered by Medicare, including annual deductibles and coinsurance payments, prescription drugs, preventive care like annual physical check-ups and devices like eye glasses and hearing aids. In fact, Medicare typically pays less than 50% of the average senior citizen's health care bills. That's why you should consider purchasing Medicare Supplement (Medigap) insurance. There are 10 different Medigap plans. Each offers the same minimum benefits, but the additional benefits differ. You have six months after you become eligible for Medicare to buy a Medigap policy without having to take a physical or answer questions about your health. So if you are interested, don't delay.

Things you should know about Long-Term Care Insurance

Long-term care insurance provides protection in case of disability

When you were employed, you probably carried disability insurance in case you ever found yourself unable to work, and collect a paycheck, because of illness or injury. Now that you're not working, you have no paycheck to protect. But becoming disabled could still be a financial catastrophe for you -- and it could happen. That's why you should consider buying long-term care coverage, which helps to pay for your daily care if you are chronically disabled. Government studies indicate 40% of Americans over age 65 will eventually need some type of long term care. With more Americans living longer, this need is likely to increase.

Long-term care is not covered by standard medical insurance policies


Long-term care insurance benefits pay for expenses not customarily covered by regular medical insurance, such as assistance with daily activities like eating, dressing and bathing, either at home (home health care) or in an extended care facility such as a nursing home (nursing home care). This kind of care is very expensive. Generally, you can expect the cost of an extended care facility, like a nursing home, to range from $20,000 to more than $80,000 per year.

Thinking Medicare? You may want to think again

Medicare pays for skilled medical care -- i.e., care provided by a trained professional under the supervision of a doctor. But it does not pay for custodial/personal care --i.e., someone who will help you get dressed or take a bath, but does not necessary have medical training. In fact, Medicare currently pays for less than 10% of the nation's nursing home bills. Medicaid, a joint state and federal program, does pay for long term care -- but only after your income and assets have been depleted to below a level defined as below "poverty level" (Each state defines it's particular "poverty level.") These are compelling reasons to consider protecting yourself with your own long-term care insurance policy.

As you or other members of your family enter your 50's, 60's, 70's and beyond, part of retirement planning should include long term care. Will your parents or loved one's need long term care?

Consider the following:

  • Over 50% of all people over 65 need "custodial" care at home, in an adult day care center, in a residential facility or nursing home. For every 1000 people...
    • 5 will have a House Fire (the average loss is $3,428)
    • 70 will have an Auto Accident (the average loss is $3,000)
    • 600 will need Long Term Care (The average cost is $40,000 to $80,000 per year)
      (Source: Society of American Actuaries, 1995 & HIAA, 1994)
    You are prepared for just about everything - except the coverage you're most likely to need -
    Long Term Care Insurance.
  • How much will long term care cost? Now it costs $40,000 to $80,000 a year or more for possibly many years - totaling HUNDREDS OF THOUSANDS OF YOUR HARD EARNED DOLLARS!! What will long term care cost in the future? Who will pay for long term care? Long Term Care Insurance could be the answer. "The Health Insurance Portability and Accountability Act of 1996" gives tax advantages for the purchase of long term care insurance.

Many people are healthy enough to qualify for Long Term Care Insurance today and you can find out without any obligation. We represent top rated companies. For a quotation, please contact us.

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