Retirement on the horizon? 5 questions you should ask about health insurance

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Retirement equals lots of exciting plans for many people — as well as worry about transitions, finances and healthcare. What are the options for health insurance for retirees? These insights help you learn more as you start planning. Waking up on your own time clock. Hitting the gym after rush hour has passed. Meeting friends for lunch. If you're getting close to retirement, the good stuff is easy to understand. More complex: figuring out health insurance . Here's what to think about first. 1. When should I start exploring my options? You can enroll in Medicare three months before your 65th birthday month, but give yourself time to learn what the program offers, says Rebecca Kinney, acting director of the Office of Healthcare Information and Counseling for the Administration for Community Living with the U.S. Department of Health & Human Services. Her advice: Dive in six months before your 65th birthday. You'll have a seven-month window to sign up, "but prices chan

What is the difference between replacement cost and market value? Insurance in USA

Learn the difference between the replacement cost and market value coverage type.

When you purchase homeowners insurance or renters insurance, you'll make a number of decisions. One of the most important is the amount of homeowners or renters coverage that best meets your needs. Understanding your options will help you make an informed choice that safeguards your real estate and your family's financial future.

What is replacement cost?

Replacement cost is the cost necessary to repair or replace your entire home. When you insure your home for its estimated replacement cost, your insurer will reimburse you (subject to your policy limits) for the cost of rebuilding or repairing your home, based on the size and structure of the home that was lost or damaged.

The most appropriate way to estimate the replacement cost of your home is to hire a building contractor or other building reconstruction professional to produce a detailed replacement cost estimate. Or your State Farm® agent can help you by utilizing an estimating tool from Xactware Solutions — to assist you with an estimate. Only the estimated replacement cost of the property's structure and its associated systems, fixtures and finishes will be included in the estimate; land value is included in a home's market value but should not be included in the amount of insurance you buy. Remember though, the ultimate decision on how much to ensure your home for is yours

What are the benefits of replacement cost?

In the event of a loss, replacement cost coverage gives your family the best chance to return to their home and usual quality of life with minimal financial interruption. For the best protection, experts recommend that you insure your home for at least 100 percent of its estimated replacement cost.

What are the risks of replacement cost? 

Replacement costs can change over time, so you should review your homeowners policy annually to make sure its coverage meets your needs. Inform your insurer if you have upgraded or improved your home, because these alterations may increase your home's estimated replacement cost. Also, you'll want to stay informed about changing market conditions in your area. Rising labor, materials and transportation costs can directly affect your home's estimated replacement cost. For maximum protection, consider a policy that includes an inflation clause that automatically adjusts to account for changes in construction costs.

What is market value?

Market value is the amount that a buyer would pay to purchase your home and its land in its current condition. Unlike your home's estimated replacement cost, its market value is influenced by factors beyond the material and labor costs of repairs or reconstruction, such as proximity to good schools, local crime statistics, and the availability of similar homes. Also, the land itself will be included in the home's market value, although it will not be covered by the homeowners policy.

What are the risks of market value?

When you insure a typical home for its market value, you are at risk of having incomplete coverage. For example, imagine that a family buys a home for $175,000 and takes out a homeowner's policy for the same amount. The estimated replacement cost for the home, though, is $225,000. If a fire or other insured event destroys the house, the insurance settlement may be less than the actual replacement cost of the home. The family would either have to make up the difference themselves or build a new, less expensive home.

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