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Informal caregivers: Who will care for the caregivers?

January 12 in Insurance, Long Term Care by admin | Comments Off

It takes bravery to care for a loved one who has lost their independence due to an accident or sickness. And there’s for sure no lack of bravery and courage among informal caregivers! But they lack adequate support, and so the question that comes to mind is “who will care for the caregivers”?

It’s an issue that is just taking shape, as the population is aging, medical advances are making it possible to extend lifespan, even for people who are suffering from serious health problems, a growing number of our fellow Canadians will sooner or later find themselves in the role of informal caregivers.

A clear-eyed look at caregivers

According to a survey done on behalf of Health Canada, fully 70% of people who receive care from a family caregiver are under 55 years of age. That shouldn’t be a surprise, since many health problems or accidents can lead to a loss of independence at any age. Parkinson’s disease, for example, may strike as early as age 45, and people can develop multiple sclerosis in their thirties.

A very long-term commitment

The data also shows that the informal caregiver’s road can be a long one: almost half of the recipients need care for more than five years – and 30% need it for more than a decade.

A lesson in bravery

The same study reveals that informal caregivers are models of bravery and responsibility. No less than 85% of them say they can cope with their situation, feeling that it is their duty to look after their spouse, child or parent. So what’s the problem?

Suffering in silence

The problem is that no one is superhuman, and that years of caring for a loved one can end up taking a heavy toll on the caregiver’s health – physical, mental and financial.

Some are forced to quit their jobs, more than half say that their work has been disrupted. (Employers feel the effects, too, since they have to rearrange schedules, or even replace employees during long periods of unpaid leave.)

As well, close to half of caregivers have to deal with increased levels of stress. Their most pressing problem? How to reconcile their personal needs with the requirements of their situation, and protect their mental health. In fact, emotional support ranks first among their needs, just above professional help. Nonetheless, many of them are very hesitant to say anything, feeling guilty about asking for help for themselves when their loved one is experiencing much greater distress. As a result, the illness becomes a dual tragedy, and entire families suffer the effects.

From a financial point of view, the government is now offering a larger (but clearly insufficient) helping hand, primarily in the form of income tax credits and deductions. There are also “compassionate care” employment insurance benefits that provide up to six weeks of income to support people who need time off work to take care of a loved one who is dying. That’s something… but obviously doesn’t meet the needs of caregivers who have to look after a loved one for five or ten years.

These people must draw mainly on their personal finances to provide for the respite they need. But how can you finance such services from your income if, at the same time, your income is falling due to lengthy absences from work? There is no single answer to that question, but we mustn’t overlook certain financial security solutions that can be adopted before anything drastic happens so that, when the time comes, they can provide dual-purpose financial support by: compensating for lost revenue to protect the family’s quality of life; and covering the cost of professional services that will give the caregiver some respite and psychological support.

Long-term disability insurance and critical illness insurance are the main products in this category. Integrating them into a financial plan requires finesse and preparation.

Don’t hesitate to ask for assistance… before the caregiver’s challenge becomes your own.

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Is it serious, doctor?

November 21 in Critical Illness Insurance, Insurance by admin | Comments Off

After the first shock of being diagnosed with a critical illness, there is another shock to be faced. And it has to do with your wallet.

There is good news on the health front in Canada: thanks to advances in medical science, people are less and less likely to die after an initial diagnosis of a critical illness, especially cancer. As you can see from the graph below, the chances of surviving cancer have increased significantly in the past decade. And for a heart attack, the statistics are even more encouraging: in cases where the heart has not stopped completely, the chances of a Canadian surviving a heart attack have risen to 90%.

In short, the good news is that we aren’t automatically faced with dying. The bad news? We won’t necessarily be in any shape to make a living.

A new horizon

It wasn’t too long ago that a worker slogged away for many years then, well before retirement or shortly afterward, received a fatal diagnosis and almost invariably succumbed to the disease. These days, that is no longer the case for many health problems, but that doesn’t mean we’re out of the woods. Because it turns out that illness itself has a cost, and that cost can be exorbitant.

For example, let’s look at the latest statistics from the Canadian Breast Cancer Network. According to a study done by that organization, 80% of the victims of breast cancer, along with their family members, have experienced an economic impact, often with long-term financial repercussions. Household income dropped by an average of 10% and almost half of the respondents ended by using up their savings and retirement nest egg. Not to mention those who took on debt (17%) and those who lost their jobs (16%)!

Conclusion: while life insurance was a good way to provide financial security for loved ones when a critical illness typically led to sudden death, this coverage is no longer sufficient on its own.

A three-point solution

The new risk we need to protect ourselves against is that of not being able to generate employment income and manage our financial obligations – which will be even heavier than before given the additional health-related costs – for an extended period of time. And this is no small risk! According to the Council for Disability Awareness, 25% of Americans at age 20 will experience an inability to work at some point in their working life, due to accident or illness.

To cope with this risk, experts are now recommending a three-point strategy.

• Wage loss insurance
Also known as disability insurance, this coverage is designed to provide you with a replacement income approximately equal to your usual net income. It allows you to continue paying your ongoing expenses, but not necessarily to cover the additional costs incurred as a result of your illness.
• Extended health coverage
If you have never suffered from a critical illness, you may not realize that many medications, treatments and types of specialized care aren’t covered by the government health plans. Extended healthcare coverage can help to defray these major costs without dipping into your savings, let alone your RRSPs.
• Critical illness insurance
Finally, the insurance known as “critical illness” coverage pays out a lump sum – from $25,000 to $250,000 or even more – if you are diagnosed with any critical illness included on a predetermined list. This lump sum can be used for anything you wish, notably to obtain the best program of treatment for your illness, regardless of the cost or where in the world it is offered.

It takes planning

A good coverage strategy against health-related financial risks should ideally combine these three components and factor in the risks and needs of the entire household: your own, those of your spouse, and those of anyone you are responsible for (your children and aging parents, for example).

It’s no small task to put this kind of strategy in place, that is why you need help of a financial services professional to help you do it!

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Critical illness insurance: for medical expertise, too

November 21 in Critical Illness Insurance, Insurance by admin | Comments Off

When you are diagnosed with a critical illness, the first thing you want to be sure of is that your treatment will be the most effective possible for your condition. And that’s one of the advantages of critical illness insurance.

In addition to the payment of a lump sum benefit, an increasing number of critical illness policies include support services to help the person before, during and after treatment. This program is generally included in the cost of the policy and may contain an especially valuable rider: a top-tier medical assistance service.

The best medical expertise

This service allows you to send your test results to a team of U.S. doctors associated with the leading institutions in the field and with the most advanced equipment available, something that is unfortunately not always the case in our health system. Your initial diagnosis will subsequently be confirmed or modified by a top specialist in the field. You will receive a written report that you can discuss with your treating physician. If desired, a doctor from the multidisciplinary team could also contact your treating physician to discuss your diagnosis and treatment plan. In this way, you can be sure that the treatment you receive will be the most appropriate for your condition.

The statistics for this type of service are impressive. One of these services1 states that, based on 15,000 of their cases, they helped to modify a patient’s diagnosis in 22% of cases, change the treatment plan in 61%, and avoid an invasive procedure in 67.3%.

Companies of this type can also direct you to the best doctors and health centres in North America for the treatment itself and take care of your reservations, appointments and accommodations. You would have to cover the actual costs, but you could use your insurance benefit for this.

Beyond money: the human factor

Other forms of support are also included in some critical illness insurance policies, notably:

  • telephone access to a health professional;
  • consultations with a psychologist;
  • an information service to help you navigate the health system;
  • assistance in coordinating home care;
  • legal assistance;
  • etc

Stacking the cards

Looking at it from this angle, critical illness insurance clearly seems to be a way of stacking all the cards in your favour – not just financially but also from the human and medical perspectives – before any serious health problems develop.

When you realize that, according to the New England Journal of Medicine, only 55% of patients receive the appropriate diagnosis and treatment, this kind of coverage certainly deserves to be considered as part of a financial security plan.

1 Source: Best Doctors ®

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Critical illness insurance: because life has changed

November 21 in Critical Illness Insurance, Insurance by admin | Comments Off

Critical illness insurance is a rapidly growing segment of Canada’s personal insurance market. Why? No doubt because it meets a pressing need.

More and more Canadians are discovering the importance of protecting themselves against the financial risks associated with critical illness. And among the three components of a comprehensive coverage strategy, along with disability insurance and extended health coverage, the popularity of critical illness insurance is soaring. In the past five years alone, sales of this product by insurance companies have risen by more than 80%.

But what exactly is critical illness insurance?

A simple answer to a complex need

Critical illness insurance is a direct response to the fact that… life has changed: we no longer necessarily die from our critical illnesses, but we need to find a way of dealing with the financial burdens they impose.

This coverage can be offered on an individual basis or through a group insurance program, and can also be combined with other products, such as life insurance. How does the coverage work? It’s simple: once the diagnosis of a critical illness has been confirmed, a predetermined benefit is paid to the client. This is a tax-free payment. The policy could help cover a long period of mortgage payments while the person doesn’t have an income, for example, or a series of consultations at a private clinic, or even out-of-country health care.

Access to invaluable services

This insurance works on the principle that you receive a lump sum to help you cover the extra costs incurred because of the illness. You can use it for things such as home care nursing, housekeeping expenses, help in preparing meals, personal care, yard work – in short, anything that can give you a boost and help you recover more quickly.

As well, these policies sometimes give access to support and assistance services that can even include confirmation of your diagnosis by a world-class medical centre and recommendations for specialized institutions.

Not just for grown-ups

Note that there are also critical illness insurance plans available for children. Even though children themselves don’t have financial responsibilities, if they are stricken with a critical illness, the financial demands on their parents can be substantial.

One parent will often decide to take time off work, or even an unpaid leave of absence. Specialized care may only be available in large cities, resulting in transportation and accommodation expenses for child and parents. Family life will be turned upside-down and help may be required for all kinds of things: meals, childcare for the other children, housework, maintenance, psychological support… Critical illness insurance for children can help to defray these extra expenses.

Every year, 1,300 young Canadians are diagnosed with cancer. An estimated 40% of Canadian women and 45% of Canadian men will face this same diagnosis in their lifetime. Critical illness insurance is one way of ensuring, while you are still in good health, that this probable medical trauma won’t be accompanied by a very avoidable financial one.

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Pay your interest with a smile

October 23 in Debt by admin | Comments Off

Well, maybe not a smile… but at least with the consolation that you can use it as an income tax deduction. Read on to find out what conditions apply.

It may not seem that obvious, but when everything is factored in – mortgage, credit cards, lines of credit, car and other consumer loans – the interest paid on borrowed money adds up to a considerable slice of a household budget. Wouldn’t it be nice if these costs could be deducted on our income tax returns!

Were you aware that – sometimes – you can do just that?

The fine print

Even though the interest you pay on a loan is not usually deductible, there is one exception: the tax authorities will allow you to deduct the interest on loans used to generate income. This could be business income, income associated with property (rent, for example), or income from an investment, such as royalties, dividends or interest.

Careful, though: not all forms of income are eligible. If the loan is used to earn tax-exempt income, the interest will obviously not be tax deductible. The same thing is generally true if the loan is invested in a life insurance policy. Other criteria may also apply, but this possibility of deducting interest still opens the door to some very attractive options.

Restructuring your debt to make it deductible

For example, it is possible for a taxpayer to restructure his or her loans in order to ease the tax burden.

Suppose that you took out a loan to finance the purchase of your condominium. Suppose also that you have an unregistered account where you hold 1,000 dividend-paying shares of a public company. Instead of paying non-deductible interest on your personal loan, you could sell your 1,000 shares, use the proceeds of the sale to partially or fully repay the loan, and then take out a new loan to repurchase 1,000 shares of the same company. Since this new loan would be used to generate income, the interest is deductible – and you have just converted a non-deductible debt into a deductible one without increasing your liabilities in any way.

Get good advice

Many other strategies could also be considered, especially if you own a business. Please note, however, that there is a mountain of case-law on this issue, and the taxman is very alert for any kind of sleight-of-hand that certain taxpayers might find tempting. If you’d like to know more about what is and isn’t allowed, check out the Canada Revenue Agency’s interpretation bulletin on this topic.

Better still: Give me a call!

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The time to buy life insurance is now

October 23 in Insurance, Life Insurance by admin | Comments Off
excerpts from an article by Garry Marr from Oct 5, 2011

You probably don’t want to hear this, but poor investment returns are delivering a new casualty – rising insurance premiums. Rates on universal life policies are set to increase in the coming weeks on top of increases in November 2010, as insurance companies attempt to better match their funding commitments.

“We led the first round [of increases last year] and we are leading this round,” said Paul Smith, vice-president of marketing and product development at Manulife Financial about the bump due Oct. 15, which will see premiums rise as much as 12%.

“Interest rates have fallen. When we did our price change last year, we looked at it historically. The way we figure that price out is we discount it at what we think we can invest the premiums at.”

It was less than a year ago that Manulife raised premiums about 10% on average for universal policies. The younger you are, the more the increases will hit you because a longer commitment means increased risks for insurance companies. Premiums for 25-year-old males have climbed 40% in a year, says Mr. Smith. “You got a deal,” he says about people who locked in last year. The last thing you want to do is let that policy lapse.

Unlike a term policy, which covers you for a prescribed length, universal is good for life and guarantees a payment to your beneficiary upon your death. The policy also includes an option to invest an extra amount, prescribed by law, which accrues tax-free with the consumer deciding how the money is invested based on a range of offered products…

Right now, a 50-year-old male could acquire $1,000,000 of universal life insurance for a guaranteed premium of $10,500 per year. With a life expectancy of 82, that individual would have to earn an after-tax return of 6% for 32 years to accumulate $1,000,000 after tax. That is an impossible return on a guaranteed basis…

Some say there will never be as good a time as there is now to buy insurance. Certainly permanent insurance.

Click here to read the rest of the article.

The good news is that some companies didn’t raise their rates yet, so you have few more weeks to get the low rates. So don’t delay, please feel free to call or email me to for a free, no obligation consultation.

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Stronger than Cancer Promotion by Desjardins

October 23 in Critical Illness Insurance, Insurance by admin | Comments Off

Cancer still kills, but most will survive, the only question is will your families financial health be as strong? Which is why Desjardins Financial Security has decided to protect the Financial health of your family when you are fighting for your physical health. We are offering a free 25% gross-up on Critical Illness Benefits up to a bonus of $100,000 for eligible products as follows:

  • Harmony T100 (excluding EHSP)
  • Harmony paid T75
  • T65 Harmony
  • Harmony T10/T20
  • Consumer CI T10/T20 (The promotion is not available for 61 to 65 in the simplified version of this policy)
  • Consumer’s CI Simplified Issue (Maximum benefit is $75,000 including gross-up)

A 25% gross-up amount of the benefit of CI can make a big difference when you face a long and expensive recovery from a critical illness. It can give you access to the best medical care available at the same time cover the cost of your busy life during treatment.

At the end of two years, you will have the option to keep the grossed-up benefit, without further evidence of insurability, or cancel it. Desjardins will remind you of these options in writing before the expiration of the promotion.

To be eligible for this benefit, applications must be received between  by 22 November 2011.

If you are interested, and/or would like to find out more about this promotion or Critical Illness Insurance feel free to contact me for a free, no obligation consultation.

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