How to Choose Your Retirement Health Insurance Plan

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Why buy health insurance?

Health and dental insurance is a way for people to save on healthcare costs not covered by their provincial government plan. Expenses like prescription drugs, dental care, hearing aids, vision care and massage therapy can create a hefty price tag — but having health insurance can help you save on those, and more.

The fact is, healthcare costs are rising all the time — in fact, the average Canadian household spent $3,731 on out-of-pocket healthcare expenses in 2016. With these services being so pricey, there is an alarming number of retirees who claim to have gone without a needed healthcare item because they didn’t have enough funds to pay for it.

[Source: Statistics Canada  How Canadians Spent Their Money in 2016 calculated at 6% of average annual expenditure on goods and services.]

Depending on your needs, there are many different insurance products to choose from as you near retirement, so just about anyone in need of health insurance can find a plan that will work for them.

Here are some pointers to make your selection easier.

Look for a core plan suited to your needs

All health insurance plans start with core features.

Often it makes sense to select core features that are similar to those you may have had through your group insurance plan. Of course you may not have a group plan through work, and that’s when purchasing health insurance can make the most sense. It’s affordable regardless of your age (it’s even affordable enough to purchase as a supplement to a group plan that doesn’t provide enough coverage). And more Canadians are switching jobs every few years. If you do, purchasing your own health insurance means it will stay with you even between jobs or if a new employer doesn’t have a strong health plan.

The core of a health insurance plan typically includes coverage for:

  • vision care
  • hearing aids
  • emergency medical travel coverage
  • registered specialists and therapists
  • ambulance
  • homecare and in-home nursing care

Different plan designs then offer different levels of coverage for prescription drugs and dental expenses — some plans cover prescription drugs, but not dental care, while others cover dental care, but not prescription drugs and some cover both.

Look for a plan suited to your budget


Your new health insurance plan will not be identical to the group plan you are leaving. Here is an overview of typical plan designs from least expensive to most expensive:

A Basic Prescription Drug Plan

These plans cover prescription drugs, but not dental care. They are ideal if you are budget-conscious.

An Enhanced Prescription Drug Plan

These plans will cover prescription drugs with increased coverage amounts for both the drugs and for the core benefits. They do not cover dental.

A Basic Prescription Drug and Dental Plan

These plans include basic prescription drug and dental coverage.

An Enhanced Prescription Drug and Dental Plan

These plans offer the highest level of prescription drug coverage, core benefit coverage, and the dental coverage includes dentures and orthodontics.

Remember that health insurance premiums renew each year and your premium rates will increase over time. The good news is that for as long as you continue paying your premiums, your coverage will continue to be in effect.

Look for a plan suited to your health situation

Some health insurance plans are medically underwritten and some are guaranteed acceptance.

Medically underwritten plans typically provide higher levels of coverage. However, if your health is not the best or you take a few medications on a regular basis, you may want to consider a guaranteed acceptance plan.

Plans that offer core benefits plus dental coverage only often are guaranteed acceptance — that is, the policy will be available to you regardless of your health. There are some plans that offer lower levels of both prescription drug and dental coverage with core benefits on a guaranteed basis.

And, if you are leaving a group plan and apply for an individual health insurance plan within 60–90 days, many insurers will offer guaranteed acceptance. There is no underwriting required.

Make your decision… now

Many people wonder if they’d save by setting aside money for healthcare costs, rather than buying a plan. But that can be risky. Sure, routine dental costs can be predictable, but unpredictable healthcare expenses can prove very costly. What if an illness requires expensive medication? What if you are injured and require a hospital stay and expensive therapy? It could be difficult to save for those scenarios, but with a health plan in place, you are covered.

If you’re completely healthy, it’s a good idea to apply for a health insurance plan now, especially if you want one that is comprehensive with high maximums. It is wise to take the best plan available while you are physically and financially healthy. It may not be available if your health changes in the future.

If you are considering a basic plan, remember that it is a great bargain. If an unexpected illness or injury suddenly strikes, the benefits you receive can far exceed the premiums you pay.

If you are considering an enhanced plan, you may be tempted to select a less expensive plan at first and think that you can upgrade later. Here’s the key: it’s always easy to downgrade, but it can be difficult to upgrade if your health situation changes. If you find that the enhanced plan is not the right plan for you, you can downgrade after a year..

Want to talk it over with an expert?

Just one phone call can help you make your retirement health insurance options. Our specialists are happy to have that conversation with you so you can make the right choice for your retirement needs.


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