Should I Review My Insurance Coverage Amount After Retirement?

In the previous article, I talked about reviewing our insurance coverage plans/riders after our retirement. In this article, I'm going to talk about reviewing our insurance coverage as well, but the focus in on reviewing the coverage amount.

Let's look at each of our insurance plan/rider as below:

• Life/Permanent Disability (TPD) - If you have stand alone life/TPD insurance, by all means reduce the coverage amount to a bare minimum. Why do i say so? As mentioned before, life insurance is for you to provide for your family. Assuming that your children are all financially independent, the need of having large life coverage has diminished. If you have medical/critical illness rider attached to a life policy, reduce it to an amount that can sustain the cost of insurance for having these riders.
• Critical Illness - Please maintain or even increase the amount covered so far as dreaded illnesses might hit you in the old age and critical illness plan/rider will provide you with a good sum for treatment.
• Hospitalization & Surgery - You should NOT reduce the insurance coverage for this plan/rider as the chances of hospitalization are much higher when we grow older.
• Personal Accident - You should think of increasing the sum assured for personal accident since the likelihood of having accidents/body injury are much higher when we are old. Besides, personal accident plan/rider is rather inexpensive.

In short, we can reduce the coverage amount for life/TPD insurance but MUST maintain/increase the coverage amount for any plan/rider that is related to critical illness/hospitalization/accidents.