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Life can be full of surprises but when it comes to retiring it's important for you to be prepared, and to assess and reduce risks. Though we don't know what the future holds, taking out the right insurance can transfer risk and protect your retirement plan.

How secure should your retirement plan be?

Insurance is central to retirement planning, particularly life and medical insurance. How protected do you need to be? Carefully consider the following questions.

Do you have a family?

If you are on your own and don't have other family members, life insurance may not be so important. But if you are the main breadwinner, then life and medical insurance can help safeguard both you and the family. Circumstances change as your life and career develops. For example, your children grow up and leave home, you pay off the mortgage, or finally achieve financial independence. All these factors and more must be taken into account when you plan for your retirement and examine your insurance needs.

Have you saved enough?

If you have an accident or even pass away and your savings aren't enough to cover your medical expenses or financial needs, then your retirement plan and family may be at risk if you don't have adequate insurance.

Do you have a company healthcare plan?

It's important that you have at least basic medical insurance if your employer does not provide a healthcare plan. Even if you do have a company healthcare plan, the coverage may not be enough, or you could lose it if you quit the job, or on retirement. As such, you should consider extra medical or critical illness coverage as part of your retirement plan. You should buy medical insurance when you are young and healthy. The older you are, the greater the chance that your application for insurance cover will be rejected if you don't already have it.

Can you afford the premiums?

Insurance plans are not free gifts, so you need to find a balance between being over- and under-protected. You should consider the following factors when deciding on the right insurance policy.

  1. Potential risks: How much salary will you lose if you have an accident or pass away? If you are the family's main earner, take account of their needs, such as tuition fees, the amount owing on your mortgage, and so on... Calculate your insurance needs based on the financial risks to you and your family.
  2. Can you afford the premiums? There are many different types of insurance policies, but basically the more protection and compensation an insurance policy offers, the greater the premium, or cost. It's important, however, to choose a policy that suits your financial situation. Generally, life insurance requires a long-term commitment and years of paying premiums. If you cannot pay the premium and terminate the insurance during the policy period, then you'll lose the premiums you already paid and insurance policy protection.

Have you made a will?

If you intend to leave your estate to your family, life insurance could be a major part of this, as you can choose to set aside benefits that go to your partner, children or parents.