You understand how important your insurance is—because you set it up in the first place to care for your loved ones.
Insurance played a vital role in protecting your family as you established your career and built your wealth.
And now as you look forward to starting a new phase in your life, it’s a good time to reassess your insurance to see if you still have the type and amount of cover that is right for you.
As you make the transition to retirement, every dollar counts. So you don’t want to be paying too much for cover that you don’t need. But equally, if something happens you don’t want to be dipping into your savings to pay the bills and pay for essentials.
Of course, we’re all different. And you’ll need to take your own personal circumstances into account when working out how much and what type of insurance you need.
If the home loan is paid off, the kids have left home and you're starting to think about the next phase in your life, you might want to reduce your insurance to reflect your lack of financial dependants or your lower debt.
But with house prices what they are1, the home loan may not be paid off quite yet. With so many young Australians staying at home until well into their 20s2, the kids may not have flown the coop. And with life expectancy increasing3, more people are approaching their own retirement with elderly parents starting to need extra care.
So if you still have significant debt and dependants, you’ll need to take them into account when reassessing your insurance needs.
And even if you are relatively footloose and debt-free, now’s not the time to jeopardise your retirement nest egg. So it’s usually a good idea to retain some level of insurance to protect what you’ve built up and protect your dream of a comfortable retirement.
Don’t forget, it’s your insurance. So you’re in charge.
Cancel in haste, repent at leisure
Don’t make the mistake of thinking that insurance is no longer relevant. You never know what life is going to throw at you.
In 2014 AMP paid out hundreds of millions in claims. And people aged 60 or over accounted for:
It’s a good idea to seek advice. A professional financial adviser can help:
- work out whether you have the right level and type of cover for your stage of life
- suggest ways to make your insurance more affordable by changing your level of cover or the way you pay
- work out the best way to extend your insurance past retirement, if you need it
- see if there are other ways you can protect what you’ve worked so hard to build up—perhaps by changing your investment mix or by taking out a capital guarantee to protect your investments.