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Is Health Insurance Important When I Retire?

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If you are approaching the end of your career, don’t take the risk of not having health insurance during retirement. Here’s how to transition smoothly.

Health insurance benefits are an important part of an employee’s compensation package. Did you know that when you retire, you will likely lose those benefits and the peace of mind they provide? You’ve learned through the years that many of your and your family’s healthcare needs won’t be paid for publicly. Here is what you need to consider about health insurance when you are ready to retire.

There is financial risk if you are under-insured during retirement

By purchasing individual health and dental insurance for your retirement, you can save on healthcare costs not covered by your provincial government plan, including expenses like prescription drugs, dental care, hearing aids, vision care and massage therapy.

Too frequently, retirees underestimate the substantial price tag healthcare costs have — 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 https://www150.statcan.gc.ca/n1/en/pub/11-627-m/11-627-m2017040-eng.pdf?st=_GIAKCTb calculated at 6% of average annual expenditure on goods and services.

Many pre-retirees think they can save by setting aside money for healthcare costs, rather than buying a health insurance plan. But that strategy can be risky. While routine dental costs may be predictable, the healthcare expenses you don’t plan on can be very costly. What if you become ill and need expensive medication? What if you are injured and need to stay in the hospital…and then need expensive therapy to get back on your feet? It’s nearly impossible to save for all possibilities, but with a health plan in place, you are covered.

Typically, when you retire you will be living on a fixed income. That’s why it’s important to consider your risks and prepare by including financial protection — health insurance — in your budget.

And don’t forget that your retirement plans may include travelling. Many health insurance plans include travel benefits to protect against expenses that may result from unexpected health-related costs while you’re out of province.

You will have a “Transition Window” of opportunity

Some individual 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 not qualify for high health insurance benefit limits, or for any coverage for your existing health conditions.

Your best prospect of getting the broadest coverage possible happens when you are leaving your employer group plan. You can apply for an individual health insurance plan within 60 to 90 days — the “transition window of opportunity” — with many insurers and have guaranteed acceptance, regardless of your health. There is no underwriting required.

Making your purchase decision in this “window” provides you with the highest opportunity to get the best protection. If you procrastinate, you can leave yourself and your dependents vulnerable to unexpected health expenses that can disrupt your retirement financial plans.

SBIS provides trusted access to expert support for choosing individual health insurance

The biggest barrier for pre-retirees is selecting the plan best suited to your needs and budget. Often, you’ve never had to purchase individual health coverage before and may find the terminology, options and process very confusing.

While a new individual health insurance plan will not be identical to the group plan you are leaving, there are many different health insurance products to choose from. That’s why talking it over with an SBIS professional is a good way to get valuable help.

At SBIS, we are experts you can trust. We help people figure out what plan to choose, what coverage they may need, and what their budget is, and then assist in actually signing up for the new plan.

Give us a call

If you are retiring soon, give us a call today. We can help make your choice easier and more convenient. We want to help you enjoy the best retirement you can — worry-free.

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