Inflation has been hard on many Americans, but perhaps none more so than seniors living on a fixed income. The financial sting may hit even harder for retirees who can’t offset inflation with wage growth that working individuals have enjoyed. While inflation has cooled in recent months, seniors on tight budgets still need to be mindful of every dollar they spend.

With little room in the budget to spare, it can be challenging for seniors to make sure they’re adequately insured, especially when its cost weighs so heavily. That’s why it’s essential to review your existing policies regularly to verify they still meet your needs.

“So many clients at this stage of life don’t review their existing policies which can cost them dearly,” says Jeff DeLarme, president of DeLarme Wealth Management. “In some cases, that means they run the risk of losing coverage—especially if a policy isn’t performing well and the cash value is being used to keep the policy going.”

To avoid such a costly mistake, it’s important to carefully evaluate your insurance needs to determine if you have the right coverage in place, experts say. 

Find out more about your long-term care insurance options online now.

3 insurance types experts say seniors should buy now

There are a few insurance types that seniors may want to consider, including:

Long-term care insurance

Long-term care insurance covers the cost of daily living assistance many people need as they grow older. It generally covers costs for in-home caregivers, assisted living, nursing home care and other expenses that Medicare and standard health insurance don’t cover.

According to Mark Baron, a long-term care insurance specialist at Baron Long-Term Care Planning, this coverage is often overlooked by those who haven’t had direct experience with it. 

“Unfortunately, it’s rare for someone to purchase the insurance unless they’ve dealt with it directly in their family. Out of sight, out of mind, basically. 95% of buyers have dealt with it in their family. This means that those who haven’t experienced it rarely consider it. But they should because their experience won’t necessarily be what their parents experienced,” says Baron.

Baron acknowledges long-term care insurance can be expensive, but it pales in comparison to the costs of care. According to Genworth, the average annual cost of a home health aide is $75,504, while assisted living averages $64,200 per year. Nursing home care is even more expensive, costing over $100,000 annually for both shared and private rooms.

Long-term care insurance may help cover such costly expenses. 

“A 55-year-old couple that spends between $7,500 to $8,500 per year on traditional insurance will have about $500,000 to $600,000 of coverage that will automatically grow to about $1 million or more by the time they need care due to an inflation growth option,” says Baron.”The key is whether someone can afford the insurance. If people can afford the insurance, they should at the very least investigate it and see for themselves.”

Compare your long-term care insurance options here.

Medicare supplemental insurance

Medicare covers many healthcare expenses for seniors, but it often falls short. For some, Medicare alone is enough. However, if you’re frequently receiving bills for copayments, coinsurance and deductibles not fully covered by Medicare Parts A and B, a Medicare supplemental insurance policy might help.

“Purchasing Medicare supplemental insurance is often worth it, and something that all seniors should at least consider, as it helps cover out-of-pocket costs not paid by Original Medicare, providing greater financial security and broader access to healthcare services,” says Trent D. Porter, a financial advisor and investment manager at Priority Financial Partners.

Find out what Medicare supplemental coverage is available to you here.

Life insurance

Purchasing life insurance as a senior may be beneficial, particularly if you have loved ones who rely on you financially. The death benefit may provide a safety net for your beneficiaries. 

“Life insurance can be helpful for seniors with dependents they are currently supporting, but for many, existing assets may eliminate the need for additional life insurance coverage and have better outcomes by investing the amount saved on premiums instead,” Porter says.

However, life insurance isn’t always necessary, and many may find it cost-prohibitive or not as beneficial as other options. 

“Unless clients have a taxable estate or a desire to otherwise leave a large tax-free benefit as part of their legacy, I generally do not find life insurance necessary for seniors,” DeLarme says. 

DeLarme further emphasizes that the cost and difficulty of qualifying for life insurance later in life lead many of his clients to focus on another option. 

“Most clients I talk to about this figure that life insurance is more about helping out the next generation and in most cases, that’s not a strong motivation to apply, qualify, and purchase life insurance. Instead, they’re more concerned with insurance that helps them cover long-term care expenses.”

The bottom line

As you grow older, your life insurance needs will likely change. It’s imperative to regularly review your insurance policies to ensure they still meet your current needs and future goals. Take the time to review your options, including life insurance, Medicare supplemental and long-term care insurance. If you need assistance, consider speaking with a financial advisor you trust or an insurance agent or broker to get personalized advice based on your financial situation.