Older Canadians are living longer, but they still have to cope with illness and disability. Statistics tell us that almost half of all Canadians between the ages of 65 and 80 are disabled in some way.

A good retirement plan can help you get through hard times, like illness or an accident. But what if you don’t have enough saved to cover extra costs, such as surprise medical bills? For some people, insurance is the answer.

How do I assess my insurance needs for retirement?

Ask yourself:

1.   What help can I get from the government?

 The government may help pay for nursing home care.  You may also get free support services in your home.

2.   Do I need critical illness insurance?

This insurance provides a lump sum payment if you have certain critical illnesses, such as cancer. It can be costly, so before you decide, ask yourself:

•  What resources do I have to fall back on if I become critically ill and have health costs I did not expect?
•  Do I want to use my savings to pay medical bills?
•  If I can’t afford critical illness insurance, will some other kind of insurance help? 

Tip: Remember, after you reach retirement age, you can no longer buy disability insurance. Also, your provincial health plan may not cover all the costs of drugs, extra services, and special devices needed for many critical illnesses.

3.   Should I buy long-term care insurance?

This insurance covers the costs of nursing home care. It can be costly, so before you buy, ask yourself:

• What other resources do I have to fall back on if I can no longer care for myself? For example, if you have already bought critical illness insurance, will it cover any of the costs of long-term care?
• Do I want to use my savings to pay for long-term care? Long-term care facilities may charge more than $2,000 a month for private rooms even in not-for-profit institutions. Government plans will only pay for a basic level of care.
• Will my life insurance policy help me pay for long-term care?

Tip: Remember, some of your other costs may drop if you need long-term care. For example, you are not likely to travel or have expensive hobbies. You may, or may not, need extra money to cover the costs. Each person has to look at their own situation.

4.      Should I buy extra health insurance?

This insurance pays for services not covered under your provincial health plan. It spreads your costs out over time – but you may find you pay as much for the insurance as you would if you paid the bills yourself. It depends on your health care needs. For some people, it will be a good option if they can’t afford long-term care or critical illness insurance.

Remember: Insurance is one way to help you get through tough times.

It’s important that you weigh the costs against the benefits. For some people, it’s worth the peace of mind they get from knowing they will get financial help if they get sick or hurt. Others prefer simply to save enough money to get through tough times ahead. If you’re not sure about the best approach for you, you may want to talk to an expert adviser.