I’m an Insurance Agent: 3 Policies You May Not Need After 60

As we age, we can start to remove certain expenses from our budget. Things like fees for child athletics or grocery bills go down as kids move out of the house and while you may need to add a long-term care or umbrella policy as you approach retirement, there are a few insurance policies that you may be able to reduce or get rid of altogether.

MoneyLion reached out to Austin Watton, financial advisor with Northwestern Mutual, to weigh in on which insurance policies you may not need after turning 60.

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Watton emphasized that decisions like which insurance policies to cancel depend first and foremost on the person: “It always depends on the net worth and how much they have invested.”

With this caveat in place, there are two types of insurance that you can likely cancel after you turn 60 and another that you may be able to reduce to put more money back into your budget.

Disability Insurance

While disability insurance is very important during your peak working years and before your investments have grown, it becomes less important as you get older and closer to retirement. “If they’re still paying for disability coverage, there’s no reason why you should carry it at this point,” Watton explained.

This has less to do with the possibility of a disability-causing incident and more to do with the fact that, at age 60, net worth may be high enough to cover loss of income. You should also factor in the time you have left to work.

“Disability benefits,” Watton said, “only pay out for two to seven years.” So if you’re nearing retirement, cancelling this policy could put about $200 a month back in your pocket.

Before cancelling, however, make sure to take your health, income and investments into account to make sure you have enough to cover your expenses in the event that you aren’t able to work.

Life Insurance

By the time you turn 60, your term life insurance policy may be winding down. Watton said that if you have a whole life or permanent policy, you should definitely keep it in place, but not renewing a term life insurance policy may be OK.

If you have enough in your savings, emergency fund and investments to cover burial expenses and keep your family comfortable, you can likely do without this policy. If your net worth is high enough at this point, Watton explained, “you should be slowing down that part of the protection.”

If you apply for a term life insurance policy after age 60, Watton estimated that you’ll pay between $300 and $400 per month for coverage. That money, he said, could be put into your investments.

Car Insurance Adjustment

You can’t cancel your car insurance when you turn 60, of course, but you may be able to reduce your coverage to liability only, especially if you’re retired and don’t drive to work everyday. Watton said this is an option “if you’ve paid off your car and you’re in a good position financially.”

You can also take the value of the car into account. If your vehicle is only worth a few thousand dollars or less, you could take the payments you would make on a comprehensive policy and save it towards your next vehicle or invest it.

This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.

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