Realigning Insurance Plans at Retirement

Hi Freddie,

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I would suggest where possible to keep policies that cover you for CI. Policies that provide only death coverage may be surrendered if you think you will not need the coverage.

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If you are having issues with cashflow, then you might want to examine your sources of passive income first. Often, many people forget to consider their insurance premiums in retirement, especially medical insurance, which typically turns out to be the most costly especially if one wants private hospital level of coverage. So be sure to plan your retirement properly based on your existing assets, before you know whether your current premiums are sustainable or not.

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If you surrender your life with CI policies, you will get to cash out whatever cash value they have, but will lose coverage in the event of CI. The payout from a life with CI policy will always be greater compared to surrendering it. If you replace it with a term, you still have to deal with the cash outflow, and you'll have to re-underwrite based on your current health condition. It is quite possible that you might end up paying more, or be unable to get coverage if you are not in the pink of health. So ensure that you plan properly first before deciding to terminate anything (if that is the case)

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In retirement, I would generally ensure that clients have their insurance portfolio comprising of a shield plan with rider, long term care coverage, and some critical illness coverage at a minimum. Anything else would be a good to have, and not a must have.

I am a retiree at 55. I have several life policies with critical illness coverage since I started work at 24. I also have hospitalisation insurance. I am thinking of cashing out my life policies because the premium is too much for my retirement expenditure. Can anyone advise what insurance like term should I get to realign my coverage? Do I lose anything if I do this? What insurance portfolio should I consider at my current life stage?