When retirement appears on the imminent horizon, it’s time to reassess your insurance needs.
This is a good opportunity to cut back on premiums for policies that made sense when you were younger, but are no longer pertinent to your current life circumstances. Meanwhile, we need to assure that we have appropriate coverage in place to take us through our senior years in security.
You first port of call is Medicare. If you’ve worked for 10 years or more, you’re eligible for Medicare coverage starting three months before you reach age 65, even if you’re still working. If you are receiving Social Security on that date, you’ll be enrolled automatically, but if you’re still working or simply not yet drawing benefits, you’ll have to contact Medicare and sign onto the program.
Don’t miss the chance to sign up during this so-called initial enrollment period, even if you have access to another health plan. If you fail to enroll during the initial period, you’ll have to pay a penalty to sign up later on in the form of higher premiums for coverage. This penalty is permanent: you’ll be paying elevated premiums for as long as you participate in the program. Our advice is, tarry not – sign up as soon as possible.
Keep in mind that Medicare isn’t free – the basic coverage, called Part A (hospital care) and Part B (doctor and medical costs), both have copays and deductibles, and Part B requires a premium. Medicare offers supplemental coverage, called Medigap, to cover any shortfalls. If you enroll in Medigap within six months of turning 65, you can’t be turned down by the insurers (the policies are federally regulated, but provided by private companies). If you wait too long, the providers can require a health exam, potentially freezing you out, so don’t miss this vital window.
For more information, please read:
How to Reassess Your Insurance Needs When You Retire | The Motley Fool