The Essential Insurance Policies You Need After 50 (And the Ones You Might Not)

As we age, our financial and insurance needs evolve. Many people over 50 still carry the same insurance policies they had in their 30s and 40s, but some of these may no longer be necessary, while others become even more critical. In this guide, we’ll break down the essential insurance policies you should have after 50—and the ones you might want to reconsider.

Health Insurance & Medicare: What to Know as You Approach 65

Healthcare costs tend to rise as we get older, making health insurance one of the most crucial policies to have. If you're still working, your employer's health insurance may be sufficient. However, if you're nearing retirement, it's time to start planning for Medicare.

Medicare Basics: At age 65, you become eligible for Medicare. You’ll need to decide between Original Medicare (Parts A & B) and Medicare Advantage (Part C), along with considering supplemental coverage like Medigap or a Part D prescription drug plan.
Retiree Health Plans: Some employers offer retiree health benefits, but these are becoming less common. If you have one, review what it covers.
Long-Term Planning: If early retirement is on the horizon, securing a health insurance plan before Medicare kicks in is essential to avoid coverage gaps.

Long-Term Care Insurance: When to Consider It and What It Covers

Long-term care (LTC) insurance helps cover the cost of care in a nursing home, assisted living facility, or even in your own home. Since Medicare does not typically cover long-term care expenses, having a plan in place is crucial.

When to Buy It: The best time to purchase LTC insurance is in your 50s or early 60s when premiums are lower and before health issues arise.
What It Covers: LTC insurance can help pay for home healthcare, assisted living, and nursing home care, depending on the policy.
Alternatives: Some people choose hybrid policies that combine life insurance with long-term care benefits or consider self-funding their long-term care needs.

Life Insurance: Should You Keep or Drop It as You Near Retirement?

Life insurance needs often change as you get older. If your children are grown, your mortgage is paid off, and your spouse is financially secure, you may not need as much coverage.

Keep It If: You still have financial dependents, significant debt, or want to leave a legacy for your heirs.
Reevaluate If: Your financial obligations have decreased, and your savings can support your loved ones.
Considerations: Some people opt for permanent life insurance policies that include a cash value component, while others convert term policies into permanent coverage for estate planning purposes.

Home & Auto Insurance: Making Adjustments for Retirement and Downsizing

As you move into the next stage of life, you may downsize your home, reduce driving, or move to a different location. These changes should be reflected in your insurance policies.

Home Insurance: If you're downsizing, review your coverage to ensure it's appropriate for your new home. If you’ve paid off your mortgage, you might consider increasing liability coverage to protect your assets.
Auto Insurance: Retired individuals often drive less, which can lead to lower premiums. Check with your insurer about discounts for low mileage or bundling policies.
Additional Coverage: If you plan to travel frequently, consider travel insurance or roadside assistance plans that cater to retirees.

Umbrella Policies: Do You Need Extra Liability Protection?

Umbrella insurance provides additional liability coverage beyond your home and auto insurance limits. This is particularly useful for individuals with significant assets or those who want extra peace of mind.

Who Needs It? If you have substantial savings, own rental properties, or have a high risk of lawsuits, an umbrella policy can protect your assets.
Cost vs. Benefit: These policies are relatively inexpensive compared to the coverage they provide, making them a smart addition for many retirees.

Final Thoughts

Your insurance needs should reflect your current financial situation and future goals. Reviewing your policies regularly ensures that you have the right coverage while avoiding unnecessary expenses. If you’re unsure about what to keep or adjust, consulting with a financial advisor can help you tailor your insurance plan to fit your life stage.

Thinking about your insurance needs after 50? Reach out to discuss how to optimize your coverage for your next chapter!

Fixed insurance products and services are separate from and not offered through Commonwealth.