Loading
Reviewing Insurance Before Retirement
Why should someone take the time to assess their insurance policies or coverage before retirement-plan'>retirement? It is significant to remember that insurance is not a single, “general” coverage. Instead it may provide for disability coverage, health coverage, mortgage insurance, homeowner’s coverage and several other areas as well. When someone is about to retire they may see that some of their policies are unnecessary or redundant, and they may also identify a need to purchase alternate policies.
Most pre-retirement assessments should begin from between five and three years before the individual seeks to retire. During this time they will be making budgets and addressing their plans for their retirement years. This is an important time for ensuring that all investments will deliver the streams of income that will be needed. Generally, if any particular investment is going to require more than a four percent amount removed each year there is the risk for running out of funds. It is during this time that plans for extending working years or finding alternate revenue streams should be investigated.
It is also during this time that some monthly insurance expenses can be reduced or entirely eliminated. This is because such things as full health insurance will no longer be required. It also means that such policies as mortgage insurance may be able to be closed and even redeemed. It is such instances as this that demonstrate the need to dedicate a significant period of time to assessing the investment strategy.
For example, someone about to retire may find they are roughly sixty thousand dollars short of their goals in one investment area. This same person may have paid for thirty-two years on their mortgage insurance policy, and now their home is paid in full. If they cash in on their policy it is quite likely that the majority of the shortage in their investment fund will be provided by the terms of the mortgage insurance investment.
This same individual may also want to investigate the cost of a long-term health care policy which will replace their company’s health insurance plan. This is because they will more than likely use both a supplementary insurance provider as well as their Medicare plans.
At the time of retirement they may also want to review and revise their life insurance, particularly if they have opted for lump sums instead of retirement-plan/pensioner'>pension payments and if they own such investment vehicles as annuities or savings accounts. Their life insurance may be able to provide a flow of income or may be able to be eliminated entirely depending upon the retirement arrangements all ready in place.