Tag Archives: Prescription Drug Coverage

The Retirement Years: How to Manage Your Insurance Needs

The Retirement Years: How to Manage Your Insurance Needs

Retirees face many challenges, but money issues are by far one of the most common concerns and stressors facing retirees today. A retiree can certainly improve their personal finances by ensuring they live beneath their means and take good care of their body, but the reason that money issues are such a universal concern is largely due to the unpredictability of life. And, this is exactly why retirees should make sure they own the right types of insurance to adequately cover themselves against unforeseen events and losses.

The three major financial risks that most retirees are concerned with are those to their personal property, longevity/quality of life, and health. Some might think of insurance products covering such risks only in terms of premiums and immediately deem them unaffordable luxuries. On the other hand, some will view certain insurances as either an essential, important, or optional coverage to help them manage their health-, property-, and longevity-related risks at a time in life when they will need it the most and have little, if any, resources at their disposal to otherwise recover from large financial losses.


Medicare Advantage and Medicare supplement (Medigap) are insurances designed to help pay Medicare coinsurance and deductibles. Medicare Advantage will typically have a lower cost, but use a more limited provider network pool. By comparison, Medigap policies typically cost more, but feature a broader selection of services.

Since a retiree may also see their need for prescription drugs rise with age, prescription drug coverage is also often considered an essential insurance to help cover a share of prescription drug costs. Some retirees may be able to continue using the prescription drug plan offered by their previous employer. Meanwhile, the new Medicare Part D drug plan may be the only affordable option for some retirees. Do keep in mind that the Part D drug plan is voluntary, meaning that you must enroll in it.

Retirement sadly doesn’t change the need to budget for and maintain certain insurance policies, such as those protecting a vehicle or home from loss risks like fire, flood, theft, or accident. However, all insurance policies should be periodically reexamined, especially as the transition into retirement is made, to determine if any additions or deletions should be made from new needs or from previous needs that aren’t applicable any longer.


Long-term care (LTC) insurance is a product designed to help pay for the extraordinarily high costs of home health, assisted living, and nursing home care that retirees are likely to need should they ever become unable to perform activities of daily living or be diagnosed with a chronic illness. It’s important to evaluate how important LTC insurance will be long before it’s ever needed. Most people start pondering their LTC needs in their early 50s since waiting until later in life increases the risk of them potentially having a health condition that would place them in a higher risk class with higher premiums or make them completely uninsurable. If LTC insurance is being considered for purchase, do make sure that the policies under consideration offer inflation protection.


Those that already have sufficient financial assets and/or life insurance coverage to provide for their surviving spouse, children, or other beneficiaries usually won’t consider additional life insurance coverage as a necessity. However, the estate tax can be fairly expensive, especially when regarding large estates. A life insurance policy can help the heirs to an estate cover this tax.

In closing, it’s important to correctly manage insurance needs at all times in life, but due to elements like living off a fixed income, such management is all the more important during retirement.