Here you are, counting down the last days before you retire, after what seems like a lifetime of work, “climbing the ladder”, and investing into your RRSP. Congratulations!
Retiring is certainly one of the bigger milestones in life. And likely, excitement mixes with anxiety and apprehension. Is there going to be enough money? What are you going to do with all the new-found time? Among the many formalities that come with retiring, your insurance might not be the first thing on your mind. After all, the time to set up your insurance is usually long before retirement…
Still, as you take the plunge 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.
- What does retirement have to do with my auto insurance?
- Retirement and homeowner’s insurance
- I’m a snowbird – how do I need to set up my insurance?
- Do I still need life insurance after I retire?
- Retirement and long-term care insurance
What does retirement have to do with my auto insurance?
This is the time of life you’ve been waiting for! No more work. No more stress. No more clock-punching. And no more commute! (This might actually be the biggest perk!) The mornings and afternoons spent stuck in traffic, adding unnecessary hours to your work day and driving your blood pressure high and higher, are finally over. Not to mention: The outrageous expenses on gas and car maintenance, which you can now save.
Unfortunately, you completely forgot another aspect that might save you even more money: Your auto insurance!
If you recently retired (or if your driving habits have significantly changed otherwise) give us a call so we can adjust your auto policy to match your new lifestyle. You can actually ‘lose’ quite a bit of money in higher payments if you retire and don’t call your insurance agent. 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 50 km per day / 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. (Your deductible is the amount of money you pay after an accident, before the money from the insurance kicks in.)
- 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. The last thing that you want to happen is to be considered “at-fault” in an accident and be held responsible for a sum of money that exceeds your policy limits. Don’t jeopardize your retirement funds and don’t risk having to return to work!
We can help you set up a high-value insurance plan that makes the most of your insurance dollars and provides you with adequate protection and peace of mind during your sunset years. You deserve to enjoy them worry-free! Give us a call today 519.579.4270 for a free policy review.
Retirement and homeowner’s insurance
Your very last mortgage payment is coming up…and then the house will be yours! What an accomplishment! Now you are a truly a homeowner.
The question is, now that you no longer have to report to the mortgage company (who requires you to carry homeowner’s insurance), should you still continue your homeowner’s policy?
Our answer: Absolutely!
It is very important that you continue to carry homeowner’s insurance on your home.
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. Call us 519.579.4270 anytime for a policy review. We are happy to help you with this (And if your policy hasn’t been reviewed since you signed the mortgage documents, it is high time to schedule an appointment with us!).
I’m a “snowbird” – how do I need to set up my insurance?
Rain, wind, and snow? Ha! No longer for you! Since you retired, you not only successfully escaped the 9-to-5 grind, but also the weather! Six months are spent in the Ontario summers, surrounded by family…and as soon as the dreariness begins, you board your car, RV, or plane, and escape to sunnier places like Florida for the winter months. Or maybe a road trip!
Yes, there’s a name for the folks who enjoy this lifestyle: Snowbirds!
The only question is: What happens to your house, car, and other property that’s here while you’re there?And, what happens with what is there while you’re here?
We can help you with that. Just give us a call, and we’ll help to coordinate the Here and There and Where and What for you, when it comes to your protection plan.
Unfortunately, things tend to get a little complicated when it comes to insurance plans that cross state borders. To make it a little easier, let’s split this question up into various insurance scenarios:
Let’s assume that you own a home in Ontario and would like to purchase a second home in Florida. That may trigger a variety of questions: Where is your primary residence?
Your primary residence is the residence that you spend most of the year in. Let’s assume, in this example, that this is the Ontario home. It needs to be insured in Ontario by a company and broker that are licensed inOntario (We can help you with that!).
If you purchase a second home in Florida, it needs to be insured in Florida (through a company or an agent who is licensed in Florida). If you are looking to find an agent outside of Ontario], please give us a call. We can recommend insurance agents in all 50 states and 10 provinces. We are happy to help!
Let’s continue to use our example of Ontario and Florida.
If you own one or more car(s) at your primary residence in Ontario], they need to be insured where they are registered. That is usually the province of your primary residence (In our example – Ontario).
If you own cars that you are absolutely sure won’t be driven in your absence, you have the option to pare down the insurance in order to save money. Give us a call – we can provide you with recommendations and price quotes.
Be sure to keep adequate insurance on the car that you intend to drive and on any car that might be driven (for example, by your son or daughter who watches the house)! If an uninsured car ends up being driven and the driver causes an accident, you will be held financially responsible no matter who drove the car!
If you drive your car from Ontario to Floridaand use it there for the months you spend “snowbirding”, your Ontario auto insurance policy will extend while you are away. But, as always, give us a call if you plan on spending an extended amount of time out of province so we can make the necessary adjustments to your policy and ensure that it meets the other state’s minimum insurance requirements.
If you purchase a car in Florida and intend to leave it parked at your secondary residence while you are back in Ontario, you need to obtain registration and insurance for this car in Florida. We can help you find a local agent.
If you carry umbrella insurance in your home state, the policy will extend to cover the underlying policies no matter where you are. However, it will not apply for homes and cars purchased, registered and insured out-of-state.
Whenever you leave home, be sure to contact your health insurance provider to ensure coverage at your destination.
Do I still need life insurance after I retire?
You just retired a few months ago and are sitting with your coffee on a rainy Wednesday morning reading the newspaper when your spouse comes in with the mail. There’s a letter from your Life Insurance Company. Your 30-year term policy is about to expire. If you’d like to renew, you have to re-apply for a new term.
Hm. You wonder…The mortgage is paid off. One of the kids is out of college. The other one will graduate in a couple of years…
There aren’t really any major expenses that your wife would face if you passed… except, of course, the cost of living, since her retirement funds are a little more meager than yours. Would she need the extra money if something happened to you? Would the kids need it?
There. You thought you had considered everything…But now you wonder: Do I still need life insurance after I retire?
You are not alone! Thousands of people are facing this question every year: “My term life insurance expired. Should I renew it?”
Unfortunately, the answer is not easy and depends on you and your family’s individual status. 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?
When you answer these questions, you’ll have a better idea whether you still need life insurance during your retirement 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. That requires you to re-apply and complete another medical examination. Unfortunately, we have to warn you: Be prepared for your life insurance rates to soar if you renew your policy at this stage in life.
You can save money on your life-insurance renewal by purchasing the minimum amount of coverage for as short a term as possible.
None of this applies to you if you have whole life insurance. Permanent, or whole 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.
Please don’t hesitate to give us a call if you’d like to have more information about life insurance options at this stage in your life. We’d be happy to assist you!
Retirement and Long-Term Care Insurance
When you dreamed about the sunset years, you always saw yourself as a spunky, energetic retiree who climbed Mt. Kilimanjaro in her seventies, took the great-grandkids to the water park in her eighties, and passed away peacefully in her late nineties by means of falling off an apple tree while harvesting apples.
All that, of course, with no sign of major health issue or body parts refusing service.
But, unfortunately, you have to admit to yourself that this might not be the most realistic scenario.
It’s a fact that more and more retirees move to an assisted living community or to a nursing home. So, in order to plan your retirement and get your affairs in order, you consider long term care insurance. But, where to start?
As with everything that’s related to retirement, it helps to start planning early. There are various different types of long-term care, ranging from hourly in-home health care help to full-time nursing home care. And the price tag varies just as greatly, ranging from $8,000 per year to a hefty $75,000 per year for full-time nursing home care in some places.
Who is going to pay for that?
Unfortunately, long-term care is not covered by health insurance. You are responsible to pay the expenses for assisted living or a nursing home out of pocket. This is where long-term care insurance comes into play. It can protect your assets, your savings and your inheritance.
The earlier in life you start planning, the lower are the rates you pay. Consider this: If you purchase long-term care insurance in your seventies, you might likely pay monthly rates that are six times higher than if you had purchased it in your fifties!
The question is, are you really going to need long-term care insurance? Consider chronic diseases and family history. If you rely on family members, don’t just assume. Talk with them.
If you have sufficient funds and investable assets to carry the cost of long-term care yourself, you may opt to self-insure rather than investing in a long-term care insurance plan. To determine your individual financial situation, get advice from a financial planner and obtain quotes from a variety of long-term care insurance providers several years before you retire.
As you consider long-term care insurance, it also plays a role whether you are single or married. If you are single and can, for example, sell your house to finance the living expenses in a nursing home, you may have sufficient funds. But if you are married, you may find that only one spouse needs the care of a nursing facility while the other stays at home. In that scenario, you can expect your living expenses to double in order to accommodate both spouses’ needs.
This topic does not lend itself to an easy answer. But with a little research and planning ahead of time, you can start your well-deserved retirement with peace of mind. Contact Lackner McLennan & Erb and Erb today 800.265.2625 and let us help you to answer your important questions and arrange the best possible insurance options for you.
Lackner McLennan and Erb and Erb provide these informational articles to educate the public about insurance and investment related matters. This article does not substitute for broker advice regarding your specific insurance or investment needs. For a comprehensive strategy to tackle what you, your family, or your business, may need we invite you to speak directly to a broker who can guide you through all the options available to you.