Do you need health and dental insurance in retirement?

Aug 8, 2022

If you’re approaching retirement, an important question you may want to ask your employer is “Will I have health and dental benefits when I retire?”. While some retirees may be fortunate enough to have healthcare benefits continue into retirement, most won’t.

About 2.2 million Canadians over 65 years old have supplementary health insurance coverage for drugs/dental through individual or employer group benefit plans, according to the Canadian Health and Life Insurance Association.  That leaves millions without health and dental insurance and wondering what options are out there.

As Canadians, we are proud of our government health insurance, but many of us think it covers more than it actually does. Research over the years has shown that while most Canadians expect to pay nothing for various health services, however, the reality is that many of pay a substantial amount for health costs out of their own pockets.

Government health-care plans vary from province to province, but generally do not cover:

  • Dental services
  • Paramedical services (e.g., massage therapy, physiotherapy, chiropractic care)
  • Glasses or contact lenses

Is personal health insurance worth it for retirees?

If your employer doesn’t offer health and dental benefits after you retire, you can purchase a personal health insurance plan. But is it worth it? It depends on:

Where you live – each province’s health car plan varies, what you might get in Alberta might cost more in Ontario. 
Your health – if you currently have expensive prescriptions or rely on medical equipment and those costs aren’t covered under your provincial plan, then personal health insurance may be worth it.
Your mindset – for some people, the benefit of knowing that they are covered if something unexpected happens to their health outweighs the cost of insurance

Retirees often develop progressively more complex health conditions as they age. Despite universal health care, most Canadian seniors need post-retirement health insurance to cover excluded dental and health-related procedures and in some provinces, medication costs. It is important to note that some provinces offer drug coverage, particularly for seniors, but it doesn’t cover all drugs.

Choose a province or territory below to find out what services are covered by the health care system in your province.

What is the average cost of personal health insurance for retirees?

It can range from just over $100 to over $400 per month. The cost will vary depending on your age, where you live, how much coverage you need, and if you have a spouse or dependents that need to be covered under the plan.

  1. Roll over plans
    “Rollover” plans are for people who had group healthcare benefits through their employer or association. If you’re a former group plan member, you can opt into a rollover plan within a specified period (generally 60 days) after you leave the group.

    You don’t have to qualify medically and do not have any pre-existing condition exclusions. Therefore, a rollover plan may be worth looking into if you have health problems that could make you ineligible for other types of coverage, such.
  2. Individual personal health insurance plans
    These plans require you to medically qualify, however, their rates and depth of coverage are better than a roll over or guaranteed issue plans.

    Individual plan designs are available with enhanced levels of coverage.
  3. Guaranteed Issue plans
    This plan may be right for you if you have pre-existing health conditions, take medication, and are not-leaving an employer group benefits plan. This plan provides prescription drug coverage, as well as other core benefits (such as vision care, specialist coverages such as chiropractors, physiotherapists, etc) without having to answer any medical questions at time of application. Issue is guaranteed, you cannot be turned down.

Work with an insurance advisor who fully understands the eligibility criteria, benefits, and fine print to ensure you get the product that is right for you.

About the author

  • Pam is the founder and “boss lady” of Savanti Insurance Agency and Savanti Investment Team (attached to PEAK Securities Inc.). She has over 15 years where she specializes in planning, investments, risk management, and tax-effective strategies for clients’ personal and/or corporate financial needs.

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Although this article was written with the utmost care and based on sources deemed reliable, there is no guarantee of its accuracy or applicability to all specific cases. This article is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. All content and information are of a general nature and does not address the circumstances of any particular individual or entity. Many of the issues discussed will vary by province. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation. The opinions expressed in this article do not necessarily reflect those of Peak Securities inc.