How do I obtain insurance in retirement, and how much will it cost me?
Here's the big question: Do any requirements for insurance disappear in retirement?
Here's the big answer: Possibly. So it might be Foolish to see what we can expect.
We'll still drive and we'll still live somewhere after we retire, so automobile and home insurance policies are a given. We pay the premiums now, and we must continue paying them after we retire. They stay.
Life insurance is a different matter. At retirement, life insurance needs are usually far less important than they were while we were working full-time.
At this stage of life, the kids are grown and gone. Now the only person to worry about is a spouse. A spouse certainly should enjoy the same standard of living after we're gone as when we're alive.
Will insurance be needed to secure that standard? For Fools, probably not. That's because we have already provided for that spouse in our planning.
In retirement, the departure of either spouse should have no effect on the ability of the other to survive comfortably for the remainder of that person's life.
If that is the case, then perhaps all that's needed in retirement is enough life insurance coverage to pay for all final expenses and funeral costs.
Coverage beyond that amount is unnecessary unless we're planning on leaving someone a large sum to remember us by.
If needed, we could carry more insurance so the family could pay any estate taxes due, but that's a matter for discussion with an attorney.
In most cases, we shouldn't need large amounts of coverage. At retirement, then, we definitely want to look at our life insurance needs so we only carry the minimum coverage needed.
While working, most of us carry disability insurance to supplement our income in case we lose work because of sickness or injury.
Sometimes we pay for that coverage, sometimes our employers pay for it. It protects our family income. But when we retire, we have no job income to protect. Therefore, we cannot find private disability insurance protection.
All that's left for that purpose is Social Security. If we retire at age 62 or older, we are already receiving a Social Security payment, so a disability is moot. But if we retire younger than age 62, the disability coverage provided by the system may be important.
That's because under Social Security, we can retire for disability at any age.
We can, that is, provided we have worked and received 10 years (40 quarters) of credit and have been covered under the system for at least 20 quarters (five years) out of the last 40 quarters (10 years) ending with the quarter in which the disability occurred.