# Insurance Coverage in Retirement?



## milhouse (Nov 16, 2016)

Was hoping to hear what type and general amount of insurance coverage people have in retirement. It's obviously dependent on personal situation so I'm interested in the why too.

I have an odd concern of messing up and being sued so we top up to $2M in third party liability insurance for our auto insurance. I also top up that category (umbrella?) for home insurance.

The missus will continue working for a few years so we'll continue to be covered by her workplace health and extended health insurance during my inital retirement. Does anyone buy personal coverage? After the missus retires, we're thinking we'll pay out of pocket for most stuff like optical and dental but I wonder if we should buy for any types of catostrophic coverage with a high deductable. I was thinking specifically for specialty prescription drugs that could wipe our savings out even though we do have a certain levels of coverage provincially.

I don't feel we need life insurance since we don't have any dependents and won't have income problems should pension and government benefits disappear should one of us pass away.

With respect to long term care insurance, I feel we have enough retirement income to divert to home care if eventually needed and the house can be sold if we need to go into an assisted living facility. 

We'll obviously buy travel insurance for our travels when the missus workplace coverage falls off. I'm just concerned about the increase in premiums as we age.

Any other coverages to consider?


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## diharv (Apr 19, 2011)

I wouldn't be concerned about travel insurance. If you're healthy with no major medical issues and south of 65, travel ins costs are a pittance to pay for peace of mind and security. Unless I'm not correct. you're not even 50 yet so you have alot of years left to enjoy the lower age bracket premium.


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## Tostig (Nov 18, 2020)

An irony in the health insurance industry is that your coverage at retirement is reduced, just at a time when you're going to need more of it. Yes, I know that private insurance isn't a charity. That's why I invest in insurance stocks.

So upon retirement, consider getting a full assessment from your dentist and request extra units.

Double-check if you're going to get any visioncare. BTW, it used to be that glasses are covered every two calendar years. Now it's two years to the date. So make sure your eye exam date is two years plus one day since your last one.

And if you're retiring early, check for prescription drug coverage.


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## birdman (Feb 12, 2013)

I have been retired 20 yrs and the only insurance I have is travel insurance which I purchase when we go away. I begrudge the dental bills which are about $1,000. a year but my wife needs and implant and appliance sometime this year which will be around $5,000. plus an appliance of some sort to replace another tooth. Fortunately we have no major health issues so our drug costs are minimal. Just the occasional physio or massage appointment from sports injuries. Overal the expenses are quite manageable but insurance is pricey and I would expect that 50% of your premium would go to the insurance companies overhead and profit. Like Tostig says insurance companies are not a charity. As with yourself, we will be able to handle any long term care requirements ourselves.


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## ian (Jun 18, 2016)

I only ever had term life through my employer and slowly reduced that prior to retirement. Now, only have a $15K policy pension benefit. My spouse cannot get life insurance.

Fortunately we have 60 day out of country medical/evac provided with my pension. Multiple trips under 60 days. We now usually limit our trips to 60 days out of Canada this as we approach 70. If we visit relatives in Ontario we always do so on our way home from somewhere as the 60 days are days from our home. Once back in Canada we are covered.

$1Mi liability on car insurance. Cannot remember the last time we drove to the US and we never snowbird there.

Alberta provides Blue Cross prescription coverage for all residents over 65 (a complete surprise to us). Other than that we have 1500 year HSA and catastrophic from our pension plan. We pay the next $3000. After that the plan pays 90 or 95 percent of all medical/pharma. It is not unusual for us to carry over unused HSA monies to the following year. We carried over $500 into 2022.

We have self insured for dental for the past 10 years. This has been to our advantage. Most of the costs we have incurred are for root canal and implants. Items that were either not covered by the plans we reviewed or had unrealistic caps on how much we could claim.


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## milhouse (Nov 16, 2016)

Yes, not too concerned about travel insurance currently due to our age and missus work benefits. Just hit 50 while the missus still has a few years before hitting 50. Just curious how folks are tackling it as they grow older and premiums go up. Like reduce trip lengths - kind of like what ian describes? We haven't done a lot of research on the topic because of our coverage from work. The missus' benefits were primary while I reduced my to catastrophic coverage with a high deductable.

WRT dental costs, I too don't see the benefit of getting person coverage since I would expect the premiums to be high with not full coverage on some items as referenced in the replies. For example, I don't think my wife's work plan covers an implant. I have similar thoughts to birdman about premiums being pricey and insurance companies need to obviously make a profit.
I forgot about RMT and physio and I'm concerned about it. I don't use it but the missus is constantly getting repaired. 

I need to check if the missus DB pension provides an option for coverage a few of you have mentioned. I'm pretty sure my DC pension definitely does not but I'll check here too. 

ian's comment about driving to the States tweaked my memory on that topic. Along the lines of my irrational fear of being sued, this is compounded for driving in the US with my own car or a rental. I'm not even sure what's a reasonable amount of coverage. We just kind of winged it in the past with our base provincial auto insurance that has and option for extended coverage when driving a rental.


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## ian (Jun 18, 2016)

Travel insurance is not just about age. It is also about medical history AND any prescriptions that you or your spouse may be taking or have taken in the recent past.

Each year I make a point of re reading my pension benefit travel insurance just in case there have been changes In coverage. These are pension benefits….the employer could change at will. Because we have travelled so much over the past ten years these travel benefits were a real sleeper. Probably worth $3-4K in expense avoidance ( age and health issue).


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## AltaRed (Jun 8, 2009)

I have the same global (extended health benefit) medical coverage as an annuitant as I did as an employee and it is pretty darn good. Company pays most of the plan cost, but my share is about $1200 in annual premiums for spouse and I. There are co-pays involved because I don't buy the highest tier and for that I am willing to self insure. We typically have stopped buying Trip Interruption and Cancellation insurance because premiums for early '70s has gotten atrocious. We self-insure for any trip under about $20k because such an event would be rare and $20k is not a big deal if it happens a few times a decade. Why do I want to enrich insurance providers?

Insurance by definition should be for catastrophic events that would make one 'weak in the knees' and compromise lifestyle should they occur. Anything less is a speed bump in the journey of life. We have no life insurance because there is no need to do so after one retires (we only had employer group term life when we worked).

We do carry $2M liability on our home and auto insurance through a combination of direct policies plus umbrella insurance. That is likely the highest risk category for anyone with significant assets. It is not that hard to get into an auto accident that results in debilitating personal injury to others. The last thing we need is for a court judgement that cleans us out of the bulk of our assets. I may well bump that coverage to $5M this year since there is enough evidence of jury awards being 'out of this world'.


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## james4beach (Nov 15, 2012)

I also bumped up my home insurance to 2M liability even though it's just an apartment rental.

I'm not retired, but being self-employed many of the same questions come up. I've decided to pay dental + vision out of my own pocket. Really I always paid for these anyway, it was just paid using extra salary from my employer in the past, so I failed to realize that I paid for them.

@milhouse you may find this thread helpful.









Health and dental for self-employed


I'm curious what other self employed people are doing for this. Tagging a few people who might be interested, @indexxx @londoncalling @kcowan @MarcoE I suspect this is a "mental accounting" issue, but maybe there's more to it that I haven't figured out yet. Currently the amount I charge my...




www.canadianmoneyforum.com


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## milhouse (Nov 16, 2016)

Thanks for the additional comments and insights.



james4beach said:


> @milhouse you may find this thread helpful.


Thanks for the link to the thread. I vaguely recall it but it was good to review that discussion again.


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## zinfit (Mar 21, 2021)

milhouse said:


> Was hoping to hear what type and general amount of insurance coverage people have in retirement. It's obviously dependent on personal situation so I'm interested in the why too.
> 
> I have an odd concern of messing up and being sued so we top up to $2M in third party liability insurance for our auto insurance. I also top up that category (umbrella?) for home insurance.
> 
> ...


What about insurance coverage for longterm care facilities ? that can be very, very expensive.


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## Mechanic (Oct 29, 2013)

Insurance companies are in business to make a profit. They don't make a profit by paying out more in expenses for you than you give them in premiums. Buy glasses when needed and it's likely less than premiums ? Dental drives me nuts because they only pay a portion anyway so I dropped it and pay as we need. We never used to need teeth cleaned every 3-6 months years ago but do now ?? Invest in a good electric toothbrush and it will probably pay for itself in a year.


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## Spudd (Oct 11, 2011)

zinfit said:


> What about insurance coverage for longterm care facilities ? that can be very, very expensive.


I think this depends on your province. In Ontario it is quite cheap, $2700/mo for a private room.


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## Retiredguy (Jul 24, 2013)

We are both between 65-70 and in good health - no meds. No life Insurance. We only ever had term life and dropped that a more than a decade ago. Our travel insurance 60 day multi trip with 7 day stability (versus 180 day) was $1400 yr and have never had occasion to use it.
Insure vehicles for 5M liability. I also get underinsured protection. I view driving as the most risky thing we do and want to be protected to the max. (ICBC max available is 5M)
House & boat - 2M liability.
Self fund dental. Blue Cross for other extended. I pay full premium for DW and mine is partially subsidized by pension. They're making money off us now but who knows what the future has in store health wise. If they continue to win I'll be very happy! 

FYI - for those who visit California the minimum liability coverage for vehicles is 35,000 and even that depends on how many people are injured. If one injured max payable is 15K 2 people 25K and 3 people 35K. Some US friends were hit by an out of control dead beat guy and they're hospital bills were 500K. They only had themselves insured for 250K. They were seniors so had some coverage by medicare but were still going to be out of pocket about 200K.


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## sags (May 15, 2010)

We have a comprehensive benefits package in retirement.

It covers pretty much anything from dental, vision, drugs, chiropractors, massage, ambulance, travel insurance.to subsidies to LTC homes.

The union administers the fund since 2008 and they got a big pile of cash from the Big Three auto makers to set it up and relieve them of the liabilities.

Last year we received an email from the trust fund telling us they were over funded and wanted to know what to do with the extra money.

So people voted to eliminate all premiums and increase and expand benefits, so that is what they did.

This thread reminded me of the dollar value of the benefits, but also that insurance companies must be raking in the cash.

If our union administered fund can increase and expand benefits AND eliminate premiums, how much are these insurance companies making in profits ?


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## sags (May 15, 2010)

We have coverage for $1300 a month each for LTC care. We would have to pay any difference.

Too bad we can't apply it to an upscale retirement home. I would be packing to move already.


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## ian (Jun 18, 2016)

sags said:


> We have a comprehensive benefits package in retirement.
> 
> It covers pretty much anything from dental, vision, drugs, chiropractors, massage, ambulance, travel insurance.to subsidies to LTC homes.
> 
> ...


Not surprised that they are overfunded. I recently read an article about DB funding in Canada. At it's highest level, largest number of funds over 100 percent funding on both methodologies. The last update from my employer DB fund mirrored the Benefits Canada article.

The challenge is always that that market investments, and thus funding, can go the other way.


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## milhouse (Nov 16, 2016)

zinfit said:


> What about insurance coverage for longterm care facilities ? that can be very, very expensive.


Our plan for long term care is to divert our travel dollars to long term care and selling the house as kind of a last option.



Mechanic said:


> Insurance companies are in business to make a profit. They don't make a profit by paying out more in expenses for you than you give them in premiums.


Yup, that's why I can't wrap my head around the value of getting on a personal private plan for general coverage versus getting coverage only for catastrophic issues. 



Retiredguy said:


> Insure vehicles for 5M liability. I also get underinsured protection. I view driving as the most risky thing we do and want to be protected to the max. (ICBC max available is 5M)


Yup, I would agree that driving is pro bably the activity we do with the most risk. Similar to AR, I'm considering bumping up from $2M but not sure if all the way to $5M. 



sags said:


> Last year we received an email from the trust fund telling us they were over funded and wanted to know what to do with the extra money.
> 
> So people voted to eliminate all premiums and increase and expand benefits, so that is what they did.


Along these lines, I ask the missus if she was able to get health benefits for both of us through her DB pension. And apparently yes the pension provides a health benefits plan for its members and kind of helps subsidizes the premiums. If/When she retires early, we'll need to figure out what our strategy is for the period from when she retires early to until she starts her pension. The second is, similar to sag's upgrade in coverage, she says that the details of the coverage provided by her pension is constantly evolving due to how well the pension is doing so there's likely not a lot of value trying to project the coverage it's providing today to what it may provide when she starts her pension and initiates the coverage then.


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## Retiredguy (Jul 24, 2013)

milhouse said:


> Yup, I would agree that driving is pro bably the activity we do with the most risk. Similar to AR, I'm considering bumping up from $2M but not sure if all the way to $5M.


[/QUOTE]

I think going from 2 to 5 isn't that expensive. Another thing to consider. A co-worker of mine years ago, on her way home from work, had the misfortune to hit a pedestrian who was badly injured, including brain damage. My co-worker had a limited amount of liability coverage which ICBC defended her against, but b/c the amount the pedestrian was suing for far exceeded her ICBC coverage she still had to fund her own lawyer which cost her big $$$ and a lot of stress. I've had 5M coverage for years and am considering getting a umbrella policy on top of it.


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## Tostig (Nov 18, 2020)

Retiredguy said:


> I think going from 2 to 5 isn't that expensive. Another thing to consider. A co-worker of mine years ago, on her way home from work, had the misfortune to hit a pedestrian who was badly injured, including brain damage. My co-worker had a limited amount of liability coverage which ICBC defended her against, but b/c the amount the pedestrian was suing for far exceeded her ICBC coverage she still had to fund her own lawyer which cost her big $$$ and a lot of stress. I've had 5M coverage for years and am considering getting a umbrella policy on top of it.


Interesting perspective that I believe to be too common.

Even though it's the pedestrian who received serious injuries and brain damage, it's the driver who is considered to suffer the misfortune and is suffering from stress.

What is more unfortunate is that stories like this do not encourage more people to be better drivers. And so, the pedestrian collisions and deaths continue.


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## Numbersman61 (Jan 26, 2015)

I now carry $7 million liability coverage after a vehicle accident a number of years in which my late wife was killed due to a truck driver failing to yield at an intersection. Before the accident, I had minimum liability coverage of $1 million as did the other party. The litigation was very complicated and expensive since a passenger in the truck is now a quadriplegic.


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## AltaRed (Jun 8, 2009)

Very sorry to hear of your loss. We just lost a DIL to cancer but we knew it was going to end that way ahead of time. Sudden losses must be that much harder.

In my mind, liability insurance and fire insurance on one's home are the two main catastrophic areas to cover. Everything else is technically manageable. Draw a line on on what one time loss could be managed and self-insure below that.


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