What’s Your Health Insurance Budget in Retirement?

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If a comfortable retirement is on the horizon for you, congratulations! Though some might consider you one of the lucky ones, you know you have been working hard towards this goal for decades, and luck has nothing to do with it.

Tell us: When you were making plans for your retirement savings, did you include a budget for health insurance?

We certainly hope so!

Your Current Benefit Plan May Not Apply

In days gone by, Canadian retirees could bank on keeping their employee benefits plans after they left the working world behind. In more and more cases, that’s no longer true. As companies work to reduce costs in every possible area, more and more Canadians are starting off retirement without any coverage at all.

In fact, according to a recent industry study, fully two-thirds of employers do not plan to offer benefits in retirement at all. And for those that do have a post-retirement plan in place, only 6% will provide those benefits at no cost to the employee.

This means many people will have to choose to purchase their own health insurance coverage, or pay out of pocket for services that aren’t covered by the government health insurance plans in Canada.

How Much Do Healthcare Expenses Cost?

When you have enjoyed the privilege of employer-sponsored benefits for a long time, it’s easy to take health insurance for granted. If you have been to see a dentist, a chiropractor, physiotherapist or podiatrist, you are familiar with just a handful of the services that are not covered by government insurance. However, if these services were billed directly to your health insurance provider, you may not have a sense of just how much it costs.

The trick with paying for healthcare expenses on your own is that there is no way to know how high those costs will go. One prescription or health care service may be manageable on its own, but what if you need to see multiple service providers? The cost to pay for healthcare services could end up being as high as $5,000 per person, per year for an older Canadian.

Even the plans for prescription drug benefits for seniors are in jeopardy. For example, the Ontario Drug Benefit (ODB) is implementing income-based premiums for seniors. It’s hard to make a plan to hit a moving target, and yet that seems like something more and more future retirees are being asked to do.

Budget for Health Insurance for Cost Certainty

Rather than trying to predict what will and will not remain covered by government plans, purchasing your own health insurance plan will help provide the cost certainty you need in retirement. Your annual or monthly premium is a cost that you can allow for in your budget, without having to guess what will come next.

The insurance premium will vary based on a number of factors, including your age, your health history, and the plan you choose. If you are coming off a group benefits plan, you may be eligible for guaranteed acceptance if you apply for benefits within 60 days of coming off the plan.

Everybody wants to keep their costs as low as possible, but when it comes to insurance benefits, it’s always a good idea to purchase as much coverage as you can comfortably afford. Keep in mind that if you find yourself with more coverage than you need, it’s easier to drop down to a lower tier of coverage. The other way around, however, poses more of a challenge. In fact, you may have to start the application process, including a medical questionnaire, all over again.

In other words, choose your benefits plan carefully. If you are in doubt about any of the coverage options – ASK!

An Insurance Broker Will Help You Choose the Right Plan

With so many coverage options and so many subtle differences between insurance carriers, it can be hard to make a decision about the right health insurance in Canada. When you planned for your retirement, you probably worked with a financial advisor who helped you make sense of it all.
Is there any reason not to work with a professional insurance advisor? Of course not! An insurance broker is an expert in the sometimes complex world of insurance. Working with a broker means that you’re getting the sound guidance you need to make informed decisions.

Contact us today to get a free, no-obligation quote to help you determine how much to set aside in your post-retirement budget for the financial security of a health and dental insurance policy!


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