OMA Insurance Services presents the last of a four-part series on planning tips to help physicians manage their insurance and financial needs from early practice to retirement. The final instalment, below, offers practical advice for physicians entering the "Phase 4: Retirement" stage of practice.
After a career's worth of diligent saving, careful planning, and excited anticipation, your retirement date is finally in sight! Before you hang up the white coat for good and throw away that last pair of latex gloves, there are still a few key insurance planning needs to take care of.
Once you retire, one of your first financial priorities is to determine your annual retirement income. This involves balancing your lifestyle goals with making sure you don't outlive your retirement savings.
Unexpected health-care expenses pose one of the greatest risks to your retirement income. Covering expenses related to a serious illness or impairment can have a long-lasting, negative impact on your retirement lifestyle. Even the costs of routine and preventive care can add up.
Consider the following facts and review the health insurance solutions you should incorporate into your financial retirement plans.
Some people mistakenly believe that the need for life insurance diminishes with age. Instead, the focus generally moves away from protecting your family's lifestyle to providing an estate to pass on to your children and grandchildren. Also, permanent life insurance can be used to provide liquidity and pay for final expenses, such as estate taxes, so that property (e.g., the family cottage) can stay in the family instead of having to be sold.
At this life stage, you may want to convert some or all of your Term Life insurance to a Permanent Life insurance plan. If you have OMA Flex-Term Life insurance, you have the option to convert to lifetime term-to-100 coverage without medical evidence at any time before you reach the age of 65. Rates are based on your age at the time of conversion. At age 100, coverage is considered "paid up," and will remain in place until death.
Following is an example of how one couple arranged their estate plan, in advance of their retirement, in order to ensure their needs, and those of their loved ones, would be met:
Retirement income protection and estate planning are two very good reasons why retirees need a well-rounded insurance plan that includes both life and health insurance solutions.
Even in retirement, it is very important to regularly review your insurance needs to ensure all of your financial goals and objectives are met.
1. Cohen MA, Weinrobe M, Miller J, Ingoldsby A. Becoming disabled after age 65: the expected lifetime costs of independent living. [Policy paper #2005-08 ]. Washington, DC: American Association for Retired Persons; 2005 Jun.
2. Sun Life Financial. The Critical Illness Insurance Solution: Incidence of death vs. critical illness based on male and female population incidence rates 2008-2009. Toronto, ON: Sun Life Financial; 2010 Sep.