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How Do Insurance Policies Effect Your Retirement Plan?

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Your life and health insurance policies are a key part of your overall financial plan. It’s important to review your policies each year to ensure that you have the coverage you need and/or implement proper coverage.

Let’s focus on issues to consider when reviewing your policies:

Health Insurance Issues:

Are you married, and do you each have employer-sponsored health insurance?

If so, consider reviewing both health insurance options to see which is best for you.

Review monthly premiums, deductibles, co-pays, out of pocket expenses, any employer HSA matching, and the doctors in the network.

Are you paying for health insurance coverage on your own (such as the Health Insurance Marketplace)?

 If so, consider the following:

  • Your coverage may automatically renew, but shop other plans before you let it auto-renew by looking at the total cost (monthly premium, deductibles, co-pays, out of pocket expenses, and the doctors in the network).
  • If your income or family size has changed, your eligibility for subsidies may change.

Are you are on Medicare?

If so, consider the following:

  • If moving to a new state, review what Medicare Supplement and Advantage plans are offered in your new location.
  • If you have lost creditable drug coverage from an employer plan, enroll in Medicare Part D within 63 days to avoid lifetime penalties.
  • Review your drug needs as Part D and Medicare Advantage plans will change their drug coverage year to year.

Health insurance has become a very confusing topic of discussion, even for those who ARE still working.

Add in all of the other things you are dealing with as you prepare for retirement, and health insurance options can quickly become a headache that you DO NOT want to deal with.

But, its important that you make the best choice for your situation so you aren’t stuck with something that you’ll regret. For more information on health care options in retirement, check out this After The Paycheck video with Ryan Marston.


Life Insurance Issues

Have your life insurance needs changed?

If so, consider the following:

  • The need to fund future expenses (such as raising children or funding college) or to fund future goals.
  • The ability to pay off new debts (like a mortgage).

Has there been a change to your life insurance coverage (including employer benefits)?

If so, consider how this would impact your financial situation.

Do you own any permanent life insurance?

If so, consider the following:

  • If you haven't reviewed the policy in a few years, request an in-force illustration to review policy performance.
  • Review the current premium, how dividends are being used, and how the cash value is accumulating.

Do you own any term insurance?

If so, consider the following:

  • Review the number of years left on the policy and if a new policy will be needed.
  • Review the conversion terms and options.
  • If you own annually renewable term insurance, review the policy premium and if new policies may be more cost-effective.

Do the owners and beneficiaries of your policies need to be reviewed?

If so, consider whether an ILIT is appropriate, and ensure that

primary and contingent beneficiaries are properly designated.

Do you have additional questions about life insurance? You aren’t alone. In this video, Sam Liang and Adam discuss questions about life insurance that were submitted from our viewers. Questions such as:

  • What is the difference between Term & Permanent Life Insurance (and which one is best for me)?
  • Should I contribute to my 401(k), Roth IRA, or look in to a cash value life insurance policy?
  • If I have permanent Life Insurance, when can I access the cash value? What are the penalties?
  • Are distributions from a permanent life insurance policy considered part of my income tax?

You can watch that video here: Life Insurance - The If, When, & Why It May Be A Good Option


Disability Insurance Issues

Has there been a change in employer coverage?

If so, consider how this would impact your financial situation if you were to become disabled.

If your employer provides disability insurance, do you need to review the coverage to determine if it is adequate?

If so, consider the following:

  • If you become disabled, you may be eligible for Social Security Disability in addition to employer-provided coverage. Be mindful of any Social Security offset provisions.
  • If there is a gap between what you may receive and your income needs during a disability, you may be able to purchase additional disability insurance.
  • If there is a job change in the future, consider purchasing private disability insurance that is not tied to an employer.

Do you need to understand any of the details of how your disability insurance works (such as waiting periods, definitions of disability, coverage amounts)?

If so, check your disability policy.

Do you need to review your total disability income sources (including Social Security, employer disability policies, and individual policies)?

If so, review the policies to see if you are under or over-insured.

Long-Term Care Insurance Issues

Do you need to review the policy to ensure that it still meets your needs?

If so, consider the following:

  • Review the services offered, such as home-care, assisted living, and nursing home care.
  • Review the benefit amount (fixed or inflation-adjusted) and benefit period.
  • Review specific features (elimination period, discounts, waiver of premiums, inflation rider, etc.).

Have you received any notices of a premium increase?

If so, review the new options provided, taking into account changes in benefit amounts, COLA, premium, and elimination periods. Also, consider the insurer’s history of rate increases.

A Genworth study estimates that retirees who do need long-term care, will need it for about two-and-a-half years … at a cost of about $100,000 a year!

With the US Dept. of Health reporting that 70% of people turning 65 today will need some sort of Long-term care, what are your options to help make sure you aren't blindsided by sudden costs associated with your healthcare needs?

Listen to John Conley’s response on a recent episode of the Just Don’t Lose The Money Radio Show

Other Insurance Issues

Do you need to review your insurance company?

If so, check to see if there are any bundling discounts and if there have been any changes to their financial strength rating.

Have additional questions on how your insurance policies play a role in your overall retirement plan? Contact us today and schedule a 15 min. phone call to go over your questions and have a better understanding of your situation.


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