When you think of retirement planning, your mind usually jumps to how much you will need during retirement years and how you will manage to reach those goals. What isn’t always in the forefront of the planning picture is the unexpected curves in the road. Even the best-laid plans can’t predict the unexpected. It is better to plan for the unknown the best you can than to let it catch you off guard completely.
Insurance could be more important during your retirement years than it is at any other point in your lifetime. Different types of insurance policies can be purchased and implemented as part of your retirement plan to better prepare you for an array of issues that life may present you with. (For more, see: Strategies to Use Life Insurance for Retirement.)
Long-Term Care Insurance
No one likes to think about it, but, there may come a time where you and/or your spouse may no longer be able to take care of yourselves and the assistance of a long-term care facility may be required. Long-term care is generally not covered under typical medical insurance and should be planned and prepared for separately as it can be quite expensive.
Proper planning for the possibility of long-term care can reduce the risk of diminishing your retirement savings trying to pay for long-term care, should the time come, that a policy could have easily covered.
Life insurance is a very versatile investment tool and can be applied to an array of financial situations and be used to address a number of problems. One of the most commonly thought uses of life insurance is that it covers the costs of a funeral after the passing of an individual. Although that is true, a life insurance policy can be so much more than that.
For example, I once had a client who passed away unexpectedly in a car accident. His life insurance policy not only covered the costs of a funeral, but also ensured that his wife had 10 years of his work income, the home mortgage was paid off, and his four children had fully funded college accounts. (For more, see: Living And Death Benefit Riders: How Do They Work?)
A life insurance policy doesn’t just stop with insuring your life, it’s reach can be extended to so many others, something you may want to consider in retirement. I am sure there are costs you would like to be prepared for and have taken care of in your passing. A life insurance policy can provide for that.
Many life insurance policies now come with “living benefits” as well as a death benefit. Living benefits make monies available for issues such as long-term care and can be an important piece of your insurance portfolio.
Basic liability insurance, just as in your pre-retirement years, is a good idea. Just because you retire, doesn’t mean the odds of you getting into some sort of accident dwindle. If anything, liability insurance is more important to have during retirement than it is before because your income stream will be less flexible to cope with such unexpected costs during retirement than it would while you’re still working and bringing in a larger income. (For more from this author, see: 5 Ways to Start Planning for Retirement in Your 50s.)
Planning for the Unknown
Although it is impossible to be prepared for everything, it is better to be safe than sorry. Insurance is one of those can’t live with it can’t live without it paradigms that is, unfortunately, a necessary evil to provide you with more peace of mind during your retirement years.