Retiring

As you take the plunge into retirement, give your personal protection plan a quick review: Adapting your personal insurance to your new status as a retiree may not only save you money, but will also set you up for the future.

What does retirement have to do with my auto insurance?
Retirement and homeowner’s insurance
I’m a snowbird – how do I need to set up my insurance?
Do I still need life insurance after I retire?
Retirement and long-term care insurance

What does retirement have to do with my auto insurance?

If you recently retired (or if your driving habits have significantly changed otherwise) give us a call so we can adjust your auto policy to match your new lifestyle. You can actually ‘lose’ quite a bit of money in higher payments if you retire and don’t call your insurance agent. Here’s what to look out for:

• If you no longer commute, you’ll likely drive significantly less than you used to, now that you’re retired. Less mileage means less time on the road and, in insurance terms, less exposure to risk. If the usage of your car drops from a 50 mile per day / five-day per week commute to ‘pleasure use’, you can reap big savings on your auto policy!
• Another way to save is to complete a Defensive Driver Class.  You actually don’t have to be retired to benefit from this. Anyone 55 or over can take a class and save money on their auto insurance. These classes are offered by AARP as well as other providers in the area for a small fee. 
• Adjust your deductible.The higher deductible, the lower your monthly insurance payments.  It may pay for you to increase your deductible.
• If you have an older car or a car that you barely use, but hesitate to sell, give us a call. We can help you evaluate the situation and make a recommendation on how to save insurance dollars while still providing you with adequate protection.

As you re-evaluate your auto insurance during retirement, please be very careful to keep adequate liability limits on your policy. The last thing that you want to happen is to be considered "at-fault" in an accident and be held responsible for a sum of money that exceeds your policy limits. Don’t jeopardize your retirement funds and don’t risk having to return to work!

Retirement and homeowner’s insurance

It is very important that you continue to carry homeowner’s insurance on your home even if you no longer have to pay a mortgage.

It is true that a lender requires you to have homeowner’s insurance, and that requirement does no longer apply when your mortgage is paid off. But unless you can easily afford to pay out of pocket for losses or even rebuild your home after a total loss, you should never consider dropping your homeowner’s insurance.

In addition, it is important to regularly review your homeowner’s policy to ensure that the value of your home, rebuilding cost, and value of your personal property are still adequately reflected.

I’m a “snowbird” – how do I need to set up my insurance?

Unfortunately, things tend to get a little complicated when it comes to insurance plans that cross state borders. To make it a little easier, let’s split this question up into various insurance scenarios:

Homeowner’s Insurance

Let’s assume that you own a home in California and would like to purchase a second home in Florida. That may trigger a variety of questions: Where is your primary residence? In which state should you get insurance?

Your primary residence is the residence that you spend most of the year in. Let’s assume, in this example, that this is the California home. It needs to be insured in California State by a company and agent that are licensed in California State (We can help you with that!).

If you purchase a second home in Florida, it needs to be insured in Florida (through a company or an agent who is licensed in Florida). If you are looking to find an agent outside of California state, please give us a call. We can recommend insurance agents in all 50 states. We are happy to help!

Auto Insurance

Let’s continue to use our example of California and Florida.

If you own one or more car(s) at your primary residence in California, they need to be insured in the state of registration. That is usually the state of your primary residence (In our example - California).

If you own cars that you are absolutely sure won’t be driven in your absence, you have the option to pare down the insurance in order to save money. Give us a call – we can provide you with recommendations and price quotes.

Be sure to keep adequate insurance on the car that you intend to drive and on any car that might be driven (for example, by your son or daughter who watches the house)! If an uninsured car ends up being driven and the driver causes an accident, you will be held financially responsible no matter who drove the car!

If you drive your car from California to Florida and use it there for the months you spend “snowbirding”, your California state auto insurance policy will extend to you while you are away. But, as always, give us a call if you plan on spending an extended amount of time out of state so we can make the necessary adjustments to your policy and ensure that it meets the other state’s minimum insurance requirements.

If you purchase a car in Florida and intend to leave it parked at your secondary residence while you are back in California, you need to obtain registration and insurance for this car in Florida.

Umbrella Insurance

If you carry umbrella insurance in your home state, the policy will extend to cover the underlying policies no matter where you are. However, it will not apply for homes and cars purchased, registered and insured out-of-state.

Health Insurance

Whenever you leave home, be sure to contact your health insurance provider to ensure coverage at your destination.

Do I still need life insurance after I retire?

Unfortunately, the answer is not easy and depends on you and your family’s individual status. Sit down and answer the following questions:

• If you passed away, would your spouse have to make significant restrictions to the current lifestyle?
• Are you currently working part-time, which would be an additional loss of income?
• Are your debts paid off?
• Are your funeral expenses covered?
• Is your estate of a size that would trigger a tax burden to your family if you died?
• What’s the status of your retirement savings? Do you have enough savings to provide for your spouse for another 10, 20, 30 years?

When you answer these questions, you’ll have a better idea whether you still need life insurance during your retirement years.

Keep in mind that life insurance rates increase with age. If you had a term life insurance policy and find that you need to continue your life insurance during retirement, you will likely have to renew your policy. That requires you to re-apply and complete another medical examination. Unfortunately, we have to warn you: Be prepared for your life insurance rates to soar if you renew your policy at this stage in life.

You can save money on your life-insurance renewal by purchasing the minimum amount of coverage for as short a term as possible.

None of this applies to you if you have whole life insurance. Permanent, or whole life insurance remains active until you pass away.

Retirement and Long-Term Care Insurance

As with everything that’s related to retirement, it helps to start planning early. There are various different types of long-term care, ranging from hourly in-home health care help to full-time nursing home care. And the price tag varies just as greatly, ranging from $8,000 per year to a hefty $75,000 per year for full-time nursing home care in some places.

Who is going to pay for that?

Unfortunately, long-term care is not covered by health insurance. You are responsible to pay the expenses for assisted living or a nursing home out of pocket. This is where long-term care insurance comes into play. It can protect your assets, your savings and your inheritance.

The earlier in life you start planning, the lower are the rates you pay. Consider this: If you purchase long-term care insurance in your seventies, you might likely pay monthly rates that are six times higher than if you had purchased it in your fifties!

The question is, are you really going to need long-term care insurance? Consider chronic diseases and family history. If you rely on family members, don’t just assume. Talk with them.

As you consider long-term care insurance, whether you are single or married also comes into play. If you are single and can, for example, sell your house to finance the living expenses in a nursing home, you may have sufficient funds. But if you are married, you may find that only one spouse needs the care of a nursing facility while the other stays at home. In that scenario, you can expect your living expenses to double in order to accommodate both spouses’ needs.

With a little research and planning ahead of time, you can start your well-deserved retirement with peace of mind.  Contact WHINS Insurance Agency today (818) 233-0825 and let us help you to answer your important questions and arrange the best possible insurance options for you.