5 Kinds of Insurance Every Retiree Should Consider

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Your insurance needs don't remain constant throughout your life. You need different insurance coverage when you're single and in your 20s than you do when you're raising a family in your 40s. When you retire, your insurance needs will evolve once again.

There are certain types of insurance protections you'll no longer need after leaving the workforce, and other types that you'll want to add. Here is a primer on the kinds of insurance that every retiree should consider.

1. Health insurance

You'll absolutely need health insurance after you've retired. Health care costs are only rising, and seniors tend to spend a large percentage of their income on medical care each year.

A study released by Fidelity Benefits Consulting said that the average 65-year-old couple retiring in 2017 would need $275,000 to cover their medical expenses throughout retirement. That number isn't falling, either. Fidelity reported that the 2017 figure is up from the $260,000 that the average 65-year-old couple needed in 2016.

Most seniors will qualify for Medicare, the federal health care insurance program, when they turn 65. Medicare isn't free, but it does cost far less than what you'd pay for private insurance. Medicare covers a lot, but it doesn't cover every medical service you might need.

Do you need to purchase supplemental health insurance to boost the coverage you're already getting with Medicare? That's not an easy question to answer. It all depends on your health and how often you plan on visiting a doctor after you retire. For many retirees, Medicare may be adequate. (See also: 5 Common Medicare Myths, Debunked)

2. Homeowners or renters insurance

Will you still own a home after you retire? If so, you still need your homeowners insurance policy. This policy will pay out to help you rebuild if your home is damaged by a fire or other natural disaster. It will also help you pay for any items inside your home — such as electronics, clothing, furniture, and jewelry — that get stolen or damaged in a disaster.

Renters insurance works the same way, but it protects people who are renting an apartment. If you plan on ditching your home and renting after you retire, make sure to invest in a renters insurance policy. Think about how much money you'd need to replace your valuables if they were stolen or destroyed. (See also: 5 Reasons You Definitely Need Renters Insurance)

3. Auto insurance

If you plan to keep driving after retirement, you'll need to pay for auto insurance. It's illegal in most U.S. states to drive without car insurance.

Maybe you're planning to sell your car and move into an urban neighborhood after you retire. Instead of doing your own driving, you plan to walk, take public transportation, or Uber to grocery stores, movie theaters, and restaurants. In this case, getting rid of your car insurance might make sense. But even if you're hanging onto your car only for emergencies or long trips, you'll need to keep your auto insurance policy.

4. Life insurance

Life insurance is usually one type of policy you can drop after retirement. After all, life insurance is a way to protect your loved ones who are dependent on your income. Once you get to retirement age, these dependents — usually your children — should be self-sufficient. They won't need a payout after you die to pay their bills.

But what if your spouse or children still aren't financially self-sufficient by the time you retire? If that's the case, you should hang onto your life insurance policy. Maybe you have a child with special needs. That child might still rely on financial assistance from you. What if you were gone and you didn't have a life insurance policy? Would that child still get the financial assistance necessary?

In most cases, retirees no longer need life insurance policies. But for special cases, keeping the policy is the smart move. (See also: When Dropping Your Life Insurance Is the Right Decision)

5. Umbrella insurance

What if someone was visiting your home and seriously injured themselves? Would your homeowners insurance policy provide enough protection? Maybe. But umbrella insurance can provide retirees with the peace of mind that they'll be protected even if their homeowners insurance doesn't offer enough coverage.

Umbrella insurance provides extra liability coverage above the limits of your homeowners and auto insurance policies. Basically, it pays out in cases where your homeowners and auto policies don't pay enough to cover all of the damages for which you are responsible.

Say you get into an auto accident that ends up with a liability claim of $1 million. If your auto insurance only covers a maximum of $500,000 for liability, your umbrella policy would cover the remaining $500,000. (See also: Beware: Your Insurance May Not Cover These 8 Losses)

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