As we progress through life, our financial landscapes inevitably shift. From the exuberance of youth to the contemplative years of maturity, each phase brings unique considerations, including evaluating current insurance policies. Periodically reassessing these needs is essential to ensure adequate coverage tailored to our current circumstances, safeguarding ourselves and our loved ones. This article will focus on several insurance coverage options that need to be reviewed as we age.

Life Insurance

In exchange for premium payments, the life insurer commits to providing a death benefit to designated beneficiaries upon the insured’s passing. As you age and your financial situation changes, reassessing your life insurance needs becomes imperative.

At ProVise, we believe life insurance should serve at least one of three purposes:

  1. To pay estate taxes: While estate taxes may not currently affect most individuals, changes to exemptions in 2026 could alter this landscape.
  2. To pay down debts: Retirees with significant loans may want to keep life insurance to ensure their spouse’s financial stability in case of their death.
  3. To replace income: Sustaining one’s family after the insured’s passing remains a common rationale for life insurance. This is especially relevant to pre-retirees but should also be evaluated for retired individuals who are collecting Social Security or pensions.

To calculate how much insurance someone might need, you can typically multiply the income needing to be replaced by a factor of 10-20, based on age and any spousal income. For those whose children are financially independent and whose assets sufficiently support their spouse, the need for extensive life insurance diminishes. Nevertheless, those with substantial estates or liabilities may find life insurance beneficial in addressing these concerns.

Long-Term Care Insurance

Long-term care (LTC) insurance bridges gaps left by health insurance, Medicare, or Medicaid, covering expenses associated with aging-related care. As the likelihood of requiring such care increases with age, assessing long-term care insurance becomes paramount. When reassessing your need for LTC insurance, be sure to consider your health, family medical history, and financial situation. While self-insurance might be viable for those with ample savings and high income, LTC insurance offers asset protection for those with modest means. As you age, the cost of LTC insurance increases, so if you plan to purchase it, aim to do so in your 50s or 60s.

Disability Insurance

Disability insurance safeguards your income if you become disabled and are unable to work. As you approach retirement, you may think disability insurance is no longer necessary. However, if you plan to work into your 60s or beyond, maintaining your disability insurance is wise. Evaluating the need for disability insurance involves considering savings, retirement plans, and desired lifestyle in case of disability. Professionals typically opt for maximum benefits, often around 60% of base salary.

Homeowner’s Insurance

If you own a home, chances are that your home is one of your largest assets, making homeowners’ insurance a must. However, as you age, your needs and the features of the policy might change. For example, if you’ve paid off your mortgage, you might want to increase your liability coverage. On the other hand, if you’ve made significant home improvements, you might need to increase your dwelling coverage to be sure the improvements are covered.

Umbrella Insurance

Umbrella insurance extends liability coverage beyond homeowner’s or auto insurance limits, providing added protection against potential lawsuits. Individuals with substantial assets beyond retirement accounts and home equity should consider an umbrella policy. As assets potentially decrease with age, adjusting umbrella coverage may be advisable.

Final Thoughts

Life is marked by evolving needs, and our insurance coverage must adapt accordingly. As we age, reassessing our insurance portfolio becomes not just a suggestion but a crucial step in safeguarding ourselves and our loved ones. By reviewing our various insurance policies, we ensure that we have the right coverage tailored to our current circumstances.

We understand that this process can be complex, with various factors and decisions to make. That’s why seeking guidance from a financial advisor or insurance professional is highly recommended. These experts can offer personalized insights, help navigate the intricacies of insurance policies, and ensure you’re making informed decisions that align with your goals and priorities.

Ready to get started? Reach out to ProVise Management Group to begin the conversation.