The retirement challenge: Using health insurance, life and annuitiesArticle added by Frank N. Darras on August 18, 2014
Frank N. Darras

Frank N. Darras

Ontario, CA

Joined: February 18, 2010

My Company

DarrasLaw

Retirement is always a challenging stage of life, with insurance just a part of the obstacle course. Future retirees need to really consider health insurance, life insurance and annuities as part of their future retirement strategy.

If health insurance seems complicated to you as a professional, imagine how it feels for your clients who don’t deal with insurance on a daily basis. You have many different options you can steer them towards, including Medicaid/Medicare for those age 65 and over.

Senior citizens cannot count on their employers providing them with health care after they retire. This is mainly due to the high costs companies must pay for their working staff. While it is now law that you must have health insurance coverage until age 65, Medicare will kick in after that for those who won’t be able to afford individual health insurance policies. No one wants to be caught without insurance because a serious accident or medical issue could decimate retirement funds or a savings account in no time.

Here are some health insurance questions your client may ask you:
  • How much will my health insurance cost?

  • Where can I purchase cost effective, comprehensive health insurance?

  • What do I need to do now to prepare myself?

  • What are Medicare and Medicaid, and what do they have to do with me?
Being prepared for these types of questions will make your job a whole lot easier. The health insurance industry can be very difficult to navigate, which means everything you learn now will help both you and your clients later on.

See also: Health care costs don't have to derail retirement plans

When it comes to life insurance, your client may not need a policy, especially if they’ve been diligent about saving. They may also be receiving a pension along with Social Security benefits. When it comes to investing in retirement, the best bet is to focus on IRAs and/or 401(k)s instead of purchasing a life insurance policy later in life. If your clients are just now thinking about purchasing a life insurance policy, give them the rundown and let them decide if it’s worth their while. If they are really gung ho about it, have them consider term insurance versus cash-value.

Instead of life insurance, a better option might be annuities. Annuities are a great insurance product that works really well with any retirement strategy. Annuities do involve investing so your client will need to invest in the annuity and collect payments further down the road either as a lump sum or in smaller monthly payments.

There are several different types of annuities you can turn to, such as immediate or deferred. That is, paying out soon after the initial investment is made or letting the money accumulate until the owner wants to collect.

Whether your client plans to go with your recommendations or not, you will at least get them headed in the right direction. Some people may need you to guide them through the whole process while others may just need advice.
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