So, you're getting ready for retirement; first of all, congratulations! After a lifetime of hard work, you're now ready to jump out of the rat race and enjoy the good life.

But before you clean out your desk for the last time, there are a few insurance considerations you might want to deal with first.

Hopefully, this article provides you with a good place to start when it comes to understanding how your insurance needs to evolve.

Review Your Coverage with Your Broker

Of course, your regular property insurance needs are still in place. If you have a car or a home, you will still need to insure those. But now might be a good opportunity to review your coverage with your broker.

Leading up to retirement age, your income was likely at its highest while obligations like children or a mortgage are either non-existent or at their lowest. With a high level of disposable income, you might have neglected to insure a few things because you would have the income or savings required to self-insure.

Without that same high level of disposable income in retirement, you might want to look into expanding your property insurance coverage so they don't pose an unnecessary drain on your retirement finances.

While property is important, your most important asset in retirement is your health. In order to protect this very important asset, we will be looking at critical illness insurance, life insurance and long-term care insurance.

Critical Illness Insurance

Critical illness insurance is a type of insurance, similar to life insurance, that pays you a lump sum amount if you are diagnosed with a critical illness. In most jurisdictions, this payment is tax-free and can be used however you wish: as income replacement or to pay for treatment.

The most important usage of critical illness insurance for retirees is to pay for treatment without having to dip into savings. In retirement, your income is not tied to your work productivity anymore so income replacement isn't that useful.

However, without your employer's health coverage, you would need to pay for prescription drugs and other treatments out of pocket.

Many medications are very expensive (a single course of cancer treatment drugs can cost $20,000 USD) so having to erode your principal to pay for medical treatment in retirement can be hugely detrimental.

Another reason why critical illness insurance is worth paying for, even before retirement, is that many policies operate on a fixed cost basis.

This means that you would only need to pay premiums for a certain number of years (typically 15) before the policy is paid off. You would have the protection for life without having to pay another dime going forward.

Buying this insurance while your disposable income is high and paying it off before retirement is a great strategy.

There are companies that specialize in the age 55-plus categories, as well.

Life Insurance

Following a similar vein, life insurance pays a lump sum to your beneficiaries when you pass away. Many people don't consider life insurance to be an important part of a retirement plan because you only see the money once you've passed on, but life insurance can be an important source of tax-free cash flow and provide peace of mind to your surviving family members.

Many people aren't aware of this, but often times you can borrow from your life insurance policy or partially withdraw from it to fund your retirement if need be. If you already have a life insurance policy in place, this can be a useful tool.

The monies can be accessible if you are diagnosed with a critical illness if needed.

Really, how you use the money is up to you.

Long-term Care Insurance

Long-term care insurance pays out money to help cover the costs of long-term care (ie. if you need to be placed into a nursing home, assisted-living facility or if you require home assistance because you are no longer able to take care of yourself.)

This type of insurance is very attractive for obvious reasons — nearly every retiree has concerns about how they would afford long-term medical treatment if the worst should come to pass. It might even be the children who are concerned with how they will look after their parents, should they not be able to take care of themselves.

The downside is that it can be expensive and typically cost hundreds of dollars each month from the date the policy starts up until you start claiming benefits from it. If you stop paying, you lose all coverage and have paid all those years for nothing.

This means you might still be paying the premium even in retirement!

If you are concerned about your ability to continue paying the premiums in retirement, you need to make sure that it fits your long-term budget.

Over the last few years, the insurance companies have changed how the programs work and not all insurers even offer the long term care product, but there are still a few options.

Final Thoughts

The moral of the story is this: as your life changes, so do your insurance needs.

It pays to regularly review your insurance coverages as you enter different stages of your life from moving into the workforce to starting a family, and eventually moving into retirement.

Insurance shouldn't be looked at only once — it should be part of your overall financial plan.