Financial planning for retirement is often synonymous with retirement savings. However, to be complete, such planning must also include an evaluation of life and health insurance needs.

This evaluation is all the more important since most workers lose their group insurance coverage, such as life, disability and health, when they retire. So, think ahead!

Disability Insurance

Generally, retirees no longer need disability insurance because their income no longer depends upon their ability to work and earn a salary. They continue to receive benefits from private and public pension plans to which they are entitled, even if they become disabled as a result of an accident or illness. In fact, this type of coverage is not offered to retirees who keep their group insurance.

However, having such coverage on an individual basis may be an interesting option for those who, for example, retire at age 50 or 55 to continue their career on their own.

Life Insurance

Equally, in the grand scheme of things, basic insurance needs at retirement aren't as significant as during one's working life.

Generally, the children have left home, debts have been repaid and some money has been set aside. When a retired person dies, financial security of that person's spouse or dependent children is already fully or partly insured.

An interesting estate and tax planning tool
Life insurance is nonetheless an interesting estate and tax planning tool at retirement. For example, it protects the estate you wish to pass on to your heirs.

Converting your Group life insurance
Workers who retire may convert their group life insurance into permanent individual coverage during the 30 days following the end of their employment.

They must do so, however, no later than age 65, according to the provisions of their contract. Such a conversion may be interesting, since the person is not required to submit evidence of insurability. However, the policy premiums are rated according to the new retiree's age, which means it can be expensive.

To summarize, ideally one should consider their life insurance needs well before retirement age.

Health coverage needs are greater than ever

If disability or life insurance needs diminish at retirement, health and accident insurance needs, as well as drug and complementary health insurance needs are greater than ever.

Public plans
Certain provinces have implemented public drug insurance plans.

These plans most often include a large annual deductible, or are only offered to people with limited financial means. (In Quebec, all new retirees keep their coverage under the Quebec Drug Insurance Plan, either through group insurance or as a participant in the public component of the plan.)

Individual health insurance - Solo Health
Today, it is easier than ever to get an array of health insurance coverage on an individual basis, such as Desjardins Financial Security's Solo Health range of products.

However, you mustn't lose sight once again that enrolment in health insurance at age 65 may be too expensive to consider. This means one thing: don't wait until the last minute.

For more information on the Solo Health range of products, consult a Desjardins Financial Security Independent Network representative.