Finding the right level of insurance cover ahead of retirement can be tricky.
If retirement’s on your horizon, the impact of COVID-19 may have thrown a a spanner in your planning.
It makes sense to concentrate on things you can control, such as insurance. Too-high premiums can chew away at the foundations of your savings. Under-insure and one day your floor may collapse, undone by events you can’t foresee.
A good way to get started is to think about what you really need, and what you don’t.
As you start thinking about insurance cover ahead of retirement, you should consider what is appropriate your lifestyle.
Here’s a simple checklist that may help:
Many of us take out insurance and are done with it – it’s enough to know we have the proverbial rainy day covered off. However, with economic clouds gathering, now’s a good time to review what you’ve already got and assess if it’s still right for you and your needs.
So, dig out your existing insurance agreements. Take special note of when they’re due to expire and your continued eligibility for the policies they hold.
An important area for many Australians is insurance held inside superannuation.
Insurance inside super can help us out when we really need it. Like any type of insurance, it works best when you’ve got the right level of protection for your situation. As you head towards retirement and your life changes, so might your priorities.
As well as life insurance, you might have total and permanent disablement (TPD) inside super. TPD cover may provide you with a lump-sum payment if you suffer a disability that prevents you from ever working again.
TPD could help you pay for ongoing medical expenses or alterations to your home to make day-to-day life easier.
Total salary continuance, also known as income protection, is designed to pay a monthly benefit of up to 75% of your pre-disability regular income if you’re unable to work due to injury or illness.
Typically, within super, income protection provides you with cover either for a two-year or five-year period or until you turn 65, depending on the terms in your employer plan.
There are pros and cons of insurance within super. Things to think about if you’re approaching retirement include:
As part of your review, it’s also a good idea to check insurance you hold inside super against other policies you might have outside super.
Then compare your cover, check whether you have any insurance double ups – if you have more than one super account with the same type of insurance, you may be paying for more insurance than you need.
As well as comparing the level of cover you get, consider any exclusions, such as the treatment of any pre-existing medical conditions, and waiting periods. Remember that if you do cancel your insurance, you might lose access to features and benefits and may not be able to sign back up at the same rate.
It’s also important to disclose your situation to your insurer honestly. Otherwise, the insurer may be entitled to refuse your claim.
Tricky times call for flexible thinking. Volatility can be daunting, whatever age you are. Fortunately, you’ve got the life experience to look beyond the headlines and adapt to changing circumstances.
If you want a hand reviewing your insurance, give us a call. We can advise you on cover options that suit your lifestyle.