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As a senior citizen, you’re probably familiar with the basic facts about insurance. However, your needs at this stage of your life have likely changed significantly since you first purchased an insurance policy. For example, at this stage of your life, you may be planning to sell your home and retire to a new area, considering long-term care coverage or evaluating whether it makes sense to purchase an annuity. In addition, as a senior you may now qualify for certain discounts on your auto and homeowner’s policies. To be sure, there are many important insurance decisions to consider during this phase of your life, making this a good time to re-evaluate your needs.
There is a nice benefit to growing older! At this life stage, you may be able to take advantage of several age-related discounts.
At this stage of your life, you may be in a downsizing mode. So, you can look for ways to bring your costs down by bringing your insurance in line with your scaled back lifestyle. At the same time, be careful to protect assets you have worked so hard to accumulate. Here are some tips:
Now is a good time to re-evaluate your life insurance to determine whether you still need as much coverage as you did when your family was younger and you had a large mortgage on your home. Your circumstances have likely changed.
In addition , make sure you examine whether an annuity makes sense for you in terms of your age and income needs.
Ask whether the annuity lets you tap into your principal if you should need it, or whether there are stiff penalty fees. Be sure you understand the fees associated with the annuity, as well as the special tax treatment of annuities, namely that income tax on annuities is deferred until you start receiving the income payments.
If you are strapped for cash and are considering selling your life insurance policy to a third party in return for a sum of money, called a life settlement, carefully consider the impact on your beneficiaries and whether it will affect your eligibility for any other public assistance you may be receiving. Also, before you make any decisions, be sure to check out the legitimacy of the company to which you are considering selling your policy by calling your state insurance department.
If you are considering the purchase of a “Final Expense” policy – a small whole life policy, usually with coverage under $10,000 and often sold to seniors up to age 85 – be aware that some are sold as guaranteed issue and come with steep charges. Furthermore, they typically don’t pay a full benefit in the first two or three years of the policy.
As you age, health insurance considerations become paramount. Here are several issues you may need to address:
As you near the Medicare-eligible age of 65, you will need to decide whether you want traditional Medicare or a Medicare Advantage plan.
Traditional Medicare includes Medicare Part A, hospital insurance, and Part B, doctor bills. Part A is already paid for through contributions made over your working lifetime. Part B requires that you pay monthly premiums - around $90 per month/per individual - that can be automatically deducted from your Social Security check, if you are already collecting.
As you get ready to enroll in Medicare, you may also want to consider purchasing - at incremental cost - a Medicare supplement or Medigap policy to pay for those medical/hospital expenses and deductibles not covered by Medicare. Medicare supplements or Medigap policies are offered by a number of private insurers that have been approved by Medicare.
Another option is a Medicare Advantage plan. Medicare Advantage plans, which replace the current Medicare + Choice plans, are offered by some private companies that have signed a contract with Medicare. Before purchasing a Medicare Advantage plan, find out which hospitals are in-network and which doctors are included.
There’s been a great deal of attention to Medicare’s newest offering: the prescription drug benefit known as Medicare Part D. If you’re currently receiving Medicare, then you are also eligible for Medicare Part D. To decide whether to enroll, consider the following:
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