7 Types of Insurance for a Secure Retirement
“No well-planned retirement should be without long-term care insurance. It is the very cornerstone of retirement security.” – Suze Orman Retirement is regarded as the golden period of one’s life....
“No well-planned retirement should be without long-term care insurance. It is the very cornerstone of retirement security.” – Suze Orman
Retirement is regarded as the golden period of one’s life. After years of juggling professional responsibilities, you finally have plenty of time for yourself, your family, and the things that you always wanted to do.
But, an important thing to know is that you can enjoy your retirement at its best only when you feel secure. Otherwise, your mind will be surrounded by the same types of distress that have dogged you all through your working years plus added worries and anxieties associated with health expenses which will not let you enjoy your golden time.
This implies that before you retire, it is crucial for you to plan and create a secure retirement for yourself. Further, when it comes to security in retirement, there is nothing better than having different types of insurances safeguarding you against uncertain expenses. When you know that you have insured almost everything and have a fixed inflow of money as a retiree, you can allow yourself to feel more carefree and live in joy.
There are different types of insurance that can safeguard you in retirement, so let’s explore seven types of insurance for a secure retirement
“It is not good to not have health insurance; that leaves the family very vulnerable.” – Elizabeth Warren
Life is uncertain. You never know what may happen the next moment. Take the case of the global pandemic- Covid-19, no one had the slightest idea that it was coming. The same is true for every other disease that we may encounter in our lives.
We never know when we are going to fall sick. This is especially true in old age. The worst part about falling ill is that today, healthcare is really expensive. Even a brief illness can quickly drain your precious savings and expose you to financial challenges.
But, the good news is that health insurance can protect you and your family from financial challenges that are associated with healthcare. A health insurance pays medical, surgical, prescription drug expenses and other expenses for the insured depending upon the health insurance plan purchased.
If you have a family health insurance plan, you can be sure that in case of a health emergency, you’ll not have to worry about the financial costs involved. Further, you can select a health insurance plan depending upon your needs. Following are some examples of health insurance plans that you can choose from:
Health maintenance organizations (HMO):
A health maintenance organization offers healthcare services through a network of some healthcare providers and facilities. When you choose a health maintenance organization, you get the least amount of freedom to choose your healthcare providers. The paperwork involved is also less.
For any healthcare issue, you can see a doctor from the network of doctors associated with the health maintenance organization but if you visit a doctor from outside the network, you’ll have to pay a portion of bills by yourself.
However, if you visit a hospital outside of the network for emergency care, you can avail the services at the in-network rates. Still, the doctors that are associated with the concerned out-of-network hospital may charge you more than in-network rates.
Now, the following are some types of payments that you have to make when you choose a health maintenance organization:
- Monthly premiums: When you purchase health insurance from a health maintenance organization, you have to pay monthly health insurance premiums depending upon your plan.
- Deductible: Deductible refers to the amount of medical expenses that you have to pay from your pocket before you can claim your health insurance. The amount of deductible can vary from plan to plan.
- Coinsurance: Coinsurance refers to a percentage of total charges that you have to pay for the care that you are availing. For example, you may have to pay 20% of the total health care costs. The amount of co-insurance usually depends on the plan that you are purchasing.
Preferred provider organizations (PPO):
As the name suggests, with a preferred provider organization, you’ll have a moderate amount of freedom to choose your healthcare providers. To see a specialist, you don’t have to get a referral from a primary care provider as in the case of a health maintenance organization.
But, if you see an out-of-network healthcare provider, you’ll have to pay more money from your pocket as compared to an HMO. Further, preferred provider organization’s health care plans require more paperwork as compared to health maintenance organizations.
Here are a few of the types of payments that you have to make when you purchase a preferred provider organizations healthcare plan:
- Monthly premiums: As with any other insurance plan, you have to pay monthly premiums when you purchase a preferred provider organization health insurance plan.
- Deductible: Along with monthly premiums, you will also have to pay a deductible. As discussed above, the deductible is the amount of medical expenses that you have to make before your health insurance begins to pay. Usually, the deductible is higher in the case of Preferred provider organization health insurance plans.
- Coinsurance: As in the case of a health maintenance organization, you have to pay coinsurance for the preferred provider organization. For example, you may have to pay 30% of your total healthcare cost and the insurance company will pay 70% of the cost.
Exclusive provider organizations (EPO):
Exclusive provider organizations provide you more freedom to choose your healthcare provider. You can go through a list of healthcare providers and select the ones that you prefer. One of the biggest benefits of getting an exclusive provider organization plan is that you do not need a referral from a primary care provider to visit a specialist.
You can go to a specialist as and when you feel the need to. Along with this, the monthly premiums are also lower in the case of an EPO but if you visit a healthcare provider outside the network, you’ll have to pay the entire cost by yourself. The healthcare insurance will not get you covered.
Here are a few of the types of payments that you may have to make when purchasing exclusive provider organization health insurance:
- Monthly premiums: You’ll have to pay a monthly insurance premium.
- Deductible: Some EPOs may have a deductible and others may not. So, whether you’ll have to pay a deductible or not depends on the EPO you choose.
- Coinsurance: Coinsurance is also a part of exclusive provider organizations’ health insurance plans. You may have to pay 20 to 30% of the total healthcare expenses and the rest will be paid by the health insurance company.
- Other costs: If you visit a healthcare provider from out of the network, you’ll have to pay the entire cost of healthcare by yourself.
- Point-of-service plans (POS):
A Point-of-service plan is a combination of an HMO and a PPO health insurance plan. One of the biggest benefits of Point-of-service plans is that you have huge freedom to select your healthcare providers. You can also consult out-of-network healthcare specialists but you’ll have to pay more in that case.
Along with this, you’ll also get access to a primary care physician who will coordinate with you and refer you to a specialist if you need to consult him. Further, this plan involves more paperwork as compared to other plans.
Here are the payments you’ll have in a point-of-service plan:
- Monthly premium: As you already know, a monthly premium refers to the monthly payments that you make to get your health insurance.
- Deductible: Deductible is the amount of money you have to spend on healthcare services before you can avail your health insurance.
- Coinsurance: In the case of a point-of-service plan, you have to pay higher coinsurance when you visit out-of-network healthcare professionals.
- High-deductible health plans:
As the name suggests, high-deductible health plans are health insurance plans with a high minimum deductible for medical expenses. In a high-deductible health plan, you may get any of the health insurance plans mentioned above. But, you’ll have a high deductible and lower monthly premiums. As and when you reach the deductible, after that the entire healthcare cost will be shouldered by the health insurance company.
Along with this, a high-deductible plan makes you eligible for a tax-advantaged health savings account. So, even if you are someone wealthy, it is beneficial to have a high-deductible health insurance plan as it can help you save money on taxes.
Here are the payments you’ll have in high-deductible health plans:
- Premium: You have to pay monthly premiums every month for the health insurance. But, as discussed above, the monthly premiums for a high-deductible health plan are usually lower than all other plans.
- Deductible: In 2021, the deductible for a high-deductible plan is $1400 for an individual and $2800 for families.
- Coinsurance: In the case of a high-deductible plan, you have to pay all the costs for your health care up to the deductible other than preventive care. But, once you have paid the deductible, the health insurance plan will take complete care of your health care expenses.
Long-term care insurance:
“Getting insurance is your responsibility to your family and loved ones. You may hate it but it is your responsibility.”- Jeremiah Say
Aging is an undeniable truth of life. As you age, your body withers and you need frequent healthcare. In some situations you may also need home health care or nursing home care.
These facilities are extremely expensive and if you want to spend your retirement years in peace, without serious financial worry, it is crucial to get long-term care insurance.
Long-term care is a coverage that provides nursing home care, home-health care, and personal or adult day care for the elderly if they suffer from a chronic condition that requires constant care.
To put it simply, long-term care insurance is coverage that covers the expenses related to assisted living. So, it is extremely beneficial to buy long-term care insurance.
The following are the best long-term care insurance’s available in 2021:
- New York Life
- Mutual of Omaha
- Lincoln Financial Group
- Pacific Life
- Brighthouse financial
“Life insurance is the greatest proof of love that we can leave our loved ones.” – Tiago Melo
All your life you keep working to ensure a comfortable life for your loved ones, but despite that your desire to keep providing for them doesn’t get exhausted. This is because you love them so deeply that even when you are aging, you want to keep doing things for them. But, as you start aging your body may no longer have the energy for you to work and provide for your loved ones and when you will no longer be there, they’ll have to do things for themselves.
I know even the thought of your family struggling to do things by themselves makes you feel sad. That’s why life insurance is important insurance that you should invest in before you retire.
Life insurance is a contract between you and the insurer which guarantees that the insurer will pay a sum of money to the named beneficiaries when you’ll no longer be there with them.
For the contract to be enforceable, you’ll have to pay regular premiums over time. Further, there are different types of life insurance policies available, and the following are some of them:
- Term life insurance:
A term life policy as the name suggests covers you for a specific term or length of time. It may be 10, 20 or 30 years, depending on your plan. Once the term expires, you’ll have to buy a new policy if you want to continue with life insurance.
- Whole life insurance:
Whole life insurance as is evident from the name, provides coverage for your entire life. The level premium remains the same throughout your life and the death benefit is guaranteed to the named beneficiaries till you pay the guaranteed premiums.
- Universal life insurance:
Universal life insurance also covers you for your entire life just like whole life insurance but one major difference is that, unlike whole life insurance, universal life insurance allows you to pay flexible premiums. You can increase or decrease the amount of premiums according to your comfort. But, paying less may mean that you have to pay more in the later years of your life to keep the benefit of life insurance.
- Simplified issue and guaranteed issue insurance:
Most life insurance policies require a medical exam to help the provider access your health risks to insure you in the right way (what this is saying is — sign up while you’re in good health).
Naturally, many elderly people and those with chronic health conditions do not qualify for these medical exams.
Under such circumstances, simplified issue and guaranteed issue insurance plans can provide them insurance coverage without any medical exams. The insurers simply make them fill simple questionnaires and no medical examinations are needed for them to qualify for the life insurance coverage.
But, these life insurance policies have high premiums and lower coverage as compared to other life insurance policies. This is because the policy providers feel that they are at high risk in providing life insurance without medical examinations.
“ Cars are the sculptures of our everyday life”- Chris Bangle
Automobiles are an essential part of our life. We cannot imagine our life without them. But, today roads are really busy and incidents of reckless driving have increased significantly. This has also increased the risk of automobile collisions and accidents.
As automobile repairs and related things are expensive, it is better to have auto insurance covering you. Good auto insurance will make sure that you don’t have to spend the limited amount of money that you’ll have during your retirement on expensive automobile repairs.
Here are some common types of auto insurances in detail:
- Liability insurance:
Liability insurance is insurance that provides the insured party with protection against claims resulting from injuries or damage to other people or property in an accident. If it is determined that the accident and the consequent damage are a result of your actions, liability insurance will cover the cost of repairing the damaged properties and the medical expenses involved.
This way, you’ll not be burdened by the costs involved in property repairs or medical costs if you are found responsible for an accident.
- Collision coverage:
Collision coverage is an important type of auto insurance that you should definitely get for yourself. As is evident from the name, collision coverage will pay for any damages that occur to your vehicle in case of an accident. In today’s world, where vehicle repairs are very expensive, it is best to have yourself covered by collision coverage.
- Comprehensive coverage:
Your car may also get damaged in events other than accidents. Natural disasters, theft and damages that may occur during an uncertain event while your car is parked are some examples. Such things are not covered in collision insurance and you need comprehensive coverage to get yourself covered for such incidents.
Comprehensive insurance can pay you in case your car has been damaged in an event other than an accident. It is always good to have this kind of insurance as you never know when natural disasters like lightning may come knocking at your door.
- Personal injury protection:
As the name suggests, personal injury protection will pay your medical bills in case of an accident irrespective of the fact whether you were responsible for the accident or the other party. Not only this, but personal injury protection also pays for the medical bills associated with the injuries that have happened to the passengers who were riding in your car at the time of the accident.
So, it is profitable to have personal injury insurance as medical bills can quickly drain your savings.
- Glass coverage:
Glass coverage covers the glass components of your car such as windshield, side windows, rear windows and glass sunroofs. Most auto insurances do not cover glass. In case the one you purchase also doesn’t cover the glass of your vehicle, it is better to purchase a glass coverage.
“ A man travels the world over in search of what he needs and returns home to find it” – George Moore.
We all know that the most beautiful place in the world where we can be is our home. But, we also need to know that our lovely home also needs some repairs from time to time and these repairs are expensive.
During your retirement years, when you may not be able to spend on expensive home repairs, homeowners insurance can save you in case of any accidental damages to your property. It covers losses that occur to the insured person’s residence, furnishings and other assets in the home.
To be specific, homeowners insurance covers exterior damage, interior damage, loss or damage of personal assets and injuries that arise while on the property. This type of coverage can be extremely beneficial for you in your retirement years.
Here are some. different types of homeowners insurances you will want to consider:
- Basic Form: Basic insurance for single-family homes
- Broad Form: Similar to basic form but with some added protection
- Special Form: This is the most common type of homeowners insurance policy that most people prefer to purchase. The reason behind its popularity is that it is a balanced form of insurance. It covers a broad range of damages and is almost sufficient in most cases.
- Contents broad Form: This homeowners insurance is specially designed to cater to the needs of renters.
- Comprehensive Form: As the name suggests, comprehensive homeowners insurance covers nearly all aspects of damage that may occur to your home. It is the second most widely chosen type of homeowners insurance.
- Unit-owners Form: This type of insurance is designed to suit the needs of condo owners
- Mobile home Form: As is evident from the name, this type of homeowners insurance is for those who have a mobile or manufactured home.
- Modified Coverage Form: A modified coverage form is for those homes that do not meet the standards set by the insurers. Under such circumstances, a modified coverage form is provided to the homeowners.
Long-Term Disability coverage:
“If you rely on your paycheck, it’s smart to protect it with disability insurance.” – Unknown
Disability insurance replaces a portion of your income in case you are not able to work for a duration of time because of an existing disability. This implies that even if you cannot go out to work because of some disability, you won’t run out of money as disability insurance will have you covered.
Long-Term Disability Coverage can provide you around 70% of your monthly income if you choose the right coverage for yourself. Although there are two types of disability coverage available namely- short-term disability coverage and long-term disability coverage, the latter one is better than the former in most cases because of the duration of coverage.
Here is some information on disability coverage you’ll want to know:
- Short-term disability coverage:
Short-term disability coverage usually covers you for a period of three to six months. But, it ensures a greater portion of your income up to 70%.
- Long-term disability coverage:
Long-term disability coverage can cover you for the number of years you state. 5,10,15,20 and it can even cover you until your retirement age if you become disabled in any unfortunate circumstances. As this type of insurance is for the long-term, the portion of your income insured lies between 40% to 70% depending upon the plan you choose. So, if you plan to secure your income in case of a long-term disability, it is best to get long-term disability coverage.
“Retirement: a time to enjoy all the things you never had time to do when you worked.” – Catherine Pulisfer
Retirement is that time of your life when you can finally do everything that you wanted to do but could not do because of your busy life. When asked, most retirees say that they want to travel the world.
If you are also someone who loves traveling and would love to travel in his retirement years, getting travel insurance is a must for you. When you have travel insurance you can travel in a more carefree manner as it covers the costs and losses associated with traveling domestically or abroad.
You’ll be glad to know that some travel insurance policies also cover damage to personal property, rented equipment such as rented cars, etc. So, it is really beneficial to get travel insurance if you would love to travel during your golden years.
Following are some common types of travel insurance that you can purchase depending on your needs:
- Travel accident insurance:
Travel accident insurance provides term life and accidental death protection for you and your family. It covers uncertain events such as flight or travel accidents that may occur when traveling from one place to another. Sometimes, it also covers baggie losses, pre-existing medical conditions, and evacuations. When purchasing travel insurance you can get in-depth details of your plan from the insurer.
- Travel medical insurance:
When you travel abroad, your general health insurance doesn’t protect you any longer. Under such circumstances, travel medical insurance can protect you. It covers medical, dental, and evacuations costs that may be involved during your travels.
- Medical evacuation insurance:
As the name highlights, medical evacuation insurance covers the costs of evacuation and repatriation while traveling. It can also provide you protection in case you need any emergency medical care while traveling. Along with this, it can also make up for lost luggage, canceled bookings and other trip interruptions.
- Package Travel insurance:
Package travel insurance is comprehensive coverage that can be customized to support your individual needs. It can cover evacuations, luggage problems, medical and dental expenses, returning minors home, interruptions, etc. Your package travel insurance plan can cover a lot depending upon the one you purchase. So, make sure to choose wisely and get the best package travel insurance plan for yourself and your family.
- Annual and specialty travel insurance:
Annual travel insurance is similar to a package travel insurance with an additional benefit that covers you during all the trips you make in a year. Different annual and specialty travel insurance plans offer different types of coverage. So, it is crucial to thoroughly review your needs and accordingly purchase annual and specialty travel insurance.
What do you call a retiree who is as carefree as a child during his retirement years?
- Well insured!
If you know that you have got yourself insured properly in terms of your health, income, medical care, travel, and all other aspects, you’ll naturally feel carefree during your retirement years and enjoy your life at the best.