A Boomer Guide to Proper Insurance

The coverage you need changes with time. Here's what to look for in your 50s and 60s

by Chris Farrell • Next Avenue

Insurance is an invaluable safety net against all kinds of costly calamities. Although a careful review of your policies is hardly anyone’s definition of fun, it’s a smart move in your 50s and 60s, primarily because insurance needs shift over time — chances are you've got too much coverage in some areas and too little in others.

(MORE: Insurance Is Protection, Not an Investment)

“As people move through their lives, their financial risks change,” says Jonathan Guyton, a certified financial planner and principal at Cornerstone Wealth Advisors in Edina, Minn.

But before I detail the coverage every boomer should have, I want to share my four basic rules for buying insurance at any age:

  • Buy insurance only from companies that are financially stable. You can find financial-strength grades of insurers on the websites of the major rating agencies, including A.M. Best, Moody’s Investor Services and Standard & Poor’s. If possible, stick with insurers that have also been around for a long time.
  • Keep it simple. I’m wary of insurance policies laden with bells and whistles that make a policy more expensive and increase its complexity. Take life insurance, for example. I like plain-vanilla term life insurance because you get a death benefit — and nothing else. (It's also easy to do comparison shopping online.) At the other end of the complexity spectrum are variable universal life policies with mutual fund-like investments, flexible premium payments and death benefits you can raise or lower down the road. Eek.

Click here for Chris Farrell's other two rules on Next Avenue.

Next: How to Beat the Soaring Cost of Long-Term Care Insurance

Don't miss out on MORE great articles like this one. Click here to sign up for our weekly newsletter.

Share Your Thoughts!


Post new comment

Click to add a comment