Long-Term Care Insurance (LTCI) 

We face a rapidly ageing population.

Since the 1920s, the ratio of seniors over the age of 85 has more than doubled. This number increases into the 2050s will be over age 85.

Who will care for you in your old age? When our health is fine, it is hard to imagine that we may, as many will, lose the ability to manage basic daily activities such as bathing, toileting, walking, dressing, feeding, or moving from our bed to a chair. Many also lose mental faculties that we often take for granted, such as memory, logical or conceptual thinking or referencing dialogue with others. Without assistance, it is near-impossible to function without these capacities.

Long-Term Care Insurance is an insurance contract with an insurer designed to provide care for our chronic illness, disability, or an accident, all of which have a higher potential of occurring as we age.

Some families are incapable of caring for a senior LTCI protects our families from the financial strain of providing long-term care, just as important as life and disability insurance protects the income of younger families. The question is, who will financially support long-term care for you? LTCI is not just for seniors but for those who become similarly incapacitated at any age.

Without a plan, your choices may be limited. It is essential to plan for our long-term care independently because our government healthcare budgets and initiatives are limited. They generally place people in government-funded facilities that have beds available. As we witnessed in the pandemic, many long-term care facilities had difficulty coping with the virus spread.

Most people entirely overlook the enormous expense of paying for a private long-term care facility (some cost up to a quarter of a million dollars for five years). Why are they so expensive? They offer 24/7 high-level nursing care in a highly secure environment. Note: Anyone can call a few private long-term care companies and inquire about their care costs.

Ageing baby boomers retiring will increasingly depend on long-term care insurance, either paid for by themselves, their children or professional health care services.

The need for Long-Term Care Insurance is increasing as medical intervention and medications keep us living longer.

  • Every year, about 50,000 strokes occur in Canada. A stroke is the leading cause of a transfer from a hospital to a long-term care facility.
  • Nearly 10% (1 in 11) of Canadians over age 65 are affected by Alzheimer’s disease or related dementia.
  • An increasing demographic (7%) of Canadians age 65 and over are residing in healthcare institutions.
  • An additional 28% of Canadians age 65 and over receive care for a long-term health problem outside of a healthcare institution.

As the populace ages, more care for the elderly, such as respite care (additional home care services), will increasingly be needed to provide family members with the medical guidance and support they need to continue caring for their loved ones. With this in mind, are our families financially prepared to deal with peripheral costs associated with providing long-term care for loved ones?

  • A study authored by Dr Marcus Hollander and Neena Chappell of the University of Victoria found that approximately $25 billion worth of unpaid care is provided willingly by family members and friends in place of paid care.

What does Long-term Care Insurance (LTC) offer? Long-term care insurance provides money to pay for the care that you both desire and need. With LTC insurance, you have:

  • Broader choices about the quality and amount of care you receive.
  • An increase of options when determining where you receive care and by whom.

Source: Statistics Canada, pre-baby boomer info

Sources: Canadian Institute for Health Information, Alzheimer Society website, Statistics Canada

 

To every life season plan for change

shutterstock_54167626

We will help you plan your financial needs throughout your lifetime. Your most valuable asset is your healthy ability to earn an income. By helping you select the right combination of life and disability insurance protection and wise investments, we can help you achieve financial success. When you have a mortgage or other large loan, term life insurance or critical illness insurance offers cost-effective ways to cover your outstanding debt if you die or suffer a critical illness.

Family Stage

• With children, your needs change –and reviewing your financial security plan is wise. RESPs offer an excellent vehicle to plan for your children’s educative future, and a low-cost life insurance policy can build cash for school.

Empty-Nest Stage

• When your children go to school or move out independently, it may be time to travel and enjoy your marriage. Perhaps you have wanted to visit Rome or take a university course. We will help you achieve these mid-life goals.

Retirement Stage

•When you’re 50 plus, you may want to partially or fully retire. We will help you assess your options.

How do I care for my aging parents?

Here are some tips to help you lighten the load of Elder-Care:

• Plan your caregiving carefully. Don’t be ashamed to ask for and get help from your siblings or others when caring for a family elder—let others share the load—tell them how they can help, and let them know you expect it! They can clean, cook, take them to the doctor, shopping, or church, and take them to their home for a little break/holiday, etc.
• Be honest about what you can truly handle. Be honest about your time when you are home and what you can realistically achieve. Don’t let your housework stay undone due to your over-commitment to the elder. That isn’t fair to you or your family.
• Assess government and public resources. Find out what services are free or available as paid-for services—learn what your community offers in senior care.
• Prioritize your to-dos. In this way, you’ll know what needs immediate attention, such as their physical comfort and safety. Determine if any problems, such as a lack of heat or air-conditioning, water leaks, or mould accumulation in the elder’s environment, needs attention. Delegate help to family members or friends concerning their skill set, career, or financial ability to help.
• Assign care tasks to the elder that they can do. List the jobs to define what they can and can’t do. Involve the elder as far as possible in the plan, if they can cook their meals and bathe themselves, and let them know this is henceforth expected of them.
• Outsource where needed. Discuss who you might hire with the elder, and where applicable, expect their input in the decision. Maybe you must bring in a house-cleaner weekly and hire a handyperson.
• Let the elder assist you financially. You may be putting them up in a space in your home, and they might use your resources, so it is not out of line to ask them to help pay your bills (perhaps via rent). The elder is now retired, so they ought to reach into their investment income (if they have wisely invested or have gained other assets) or pension income to share in the expenses and perhaps buy and prepare their food.
• Decide to make informed decisions. Don’t procrastinate to make the necessary changes and improvements because years of frustration may accrue as “things unattended only to get worse”.
• Meet with a lawyer and financial advisor. If the relative increasingly depends on you to help in their estate planning, employ a good lawyer they can trust; write an up-to-date living and testamentary will.
• Review to determine if there may be life insurance needs for the funeral and burial expenses ahead of time. If there is, consider buying a policy and have siblings or heirs split the premium.
• Assess any tax and debt liabilities. Assess retirement savings, investment holdings, other assets and all liabilities to create a mini net worth snapshot to determine the potential net need for life insurance. Then select the amount necessary. Check if any cash values can make current cash income while maintaining an old policy the elder may own. Determine who will be the Power of Attorney (PA).
• Become an advocate. Don’t be afraid to take the elder’s side. Many are not used to today’s current culture and need kind understanding. So speak up for their rights and causes; never bully them or ignore their cries for help or justice as they face our healthcare system, unfair medicinal prescription fees, or rude gestures from others. Dialogue with physicians (and get second opinions) when necessary for their well-being.
• Maintain a happy attitude. If you keep your good humour and remain positive, you’ll lessen the stress factor. Caring for elders can tip your emotional scales, so laugh a little, even at yourself!
• Review and respect their historic life’s excellent and fun aspects with you. One day your elder won’t be around to show your appreciation and love for their positive role in your life. Tell respectful stories about their hero or heroine qualities. They probably did rescue you by overseeing your younger days while feeding and clothing you. Don’t put them down for failures—forgive them. They may have “been there” for you, so recall the best days of their life to realise they were needed, appreciated, and loved for who they are.
• Maybe write a book on their story. Why not review their life story in a journalised small book of their history—to leave a legacy to your family to show appreciation and take your mind off the stressful negatives? It may reveal redemptive qualities; to teach your younger generation by example—to impress the younger generation by the elder’s influence, such as perhaps: their character developed by war, or persistence during poverty, or a corrective life-change, their hard work that led to business success, or a healed relationship via forgiveness, or their involvement in charitable giving, or their volunteer work to help others, etc.
• Stay ahead of burnout. Get some rest and exercise weekly to protect your mental and physical health. Fulfil all your responsibilities, and maintain all your meaningful relationships. Be sure to get the R&R you need to stay graceful, strong and vigorous as your elder ages and becomes more dependent on you.
• Find unanimity in an elder-care support group. They can share their ideas and help you make decisions, help you not to feel alone, and help you face stresses and problems as they relate their wisdom obtained by experience. Getting ideas and compassion from other caregivers caring about you doesn’t hurt.

Caring for an older adult is not a job that comes with training or gets a lot of thanks—it is something you take on, usually out of love. It can be an unappreciated Herculean effort—but at least you’ll know you did your best at the end of the day. Your love is what counts.

Every so often, you can take a self-inventory and restate your primary purpose in caring for an elder. This will help you overcome the temptation to complain, throw in the towel, or send the elder to a rest home too early.

You may want to consider Longterm Care Insurance for yourself or your loved ones, which helps pay for services the family members may not be able to provide. Talk to your advisor about the life insurance policies available for these services.

The importance of a Status Certificate when buying a condo

shutterstock_64609330

Condominium living has become an option for homeowners who want to reduce the many responsibilities of a single-family residence.  Most condominium corporations assume these tasks and are a popular choice for young and middle-aged purchasers who are too busy or prefer to limit their day-to-day home duties such as garbage and snow removal, home maintenance and repairs. Condominiums are also attractive to retirees who want to own without any strenuous activities that consume time or who want freedom and security to travel without worrying about pre-retirement duties.

A purchaser needs to obtain an up-to-date status certificate for the unit and have it reviewed by a real estate lawyer.  Real estate agents generally make a condo purchase and sale agreement conditional upon a satisfactory review of the Status Certificate. Under the Condominium Act, a condominium corporation has ten days within which to produce a status certificate for anyone who requests one (upon payment of the prescribed fee, which is currently $100).  The Act also establishes what information a status certificate must contain.

What is a status certificate?
A status certificate provides a snapshot of everything that may concern prospective purchasers, including its overall financial situation and budget relative to the amount of money in its reserve fund (a savings account maintained for significant repairs and replacements of the common elements such as a new elevator or chiller); the rules by which unit owners are expected to abide; and whether the condominium corporation knows any circumstances that may increase to the standard monthly expenses.

It is important to determine if a condominium corporation is involved or expected to be involved in litigation, and an up-to-date status certificate may reveal that the unit is subject to a “special assessment,” which is a sum of money the condominium corporation believes must be collected from the unit owners to cover an unforeseen expense.  This knowledge of a special assessment may affect what a purchaser is willing to pay for a unit.

Your mortgage provider may also want to let you know that your lawyer has reviewed the status certificate as a requirement of the sale.

What is a Power of Attorney (POA)?

shutterstock_59333131

If you were to have a stroke, heart attack, or severe operation—a disability to which you could not take care of your affairs, who would take over? What if this was the last day you could make a mindful decision on your behalf?

You transfer directorial powers over your affairs to a Power of Attorney 

In such a situation, a Power of Attorney (POA) allows people you trust to manage the prescribed affairs of your life.

Without a POA, your family though ready to pay your bills, and help manage your bank account and your investments, for example, may need special court approval to act for you. They could face a bureaucratic nightmare to acquire authority to pay your bills (from your provincial public trustee).

• Clarity can be defined. A POA leaves no room for misunderstanding the range of authority over your assets. You may need to set restrictive clauses in a POA that addresses your unique concerns.

• You will give up the powers of your signature The POA relinquishes the control of your signature and all the authority associated with it. Unless it states otherwise, the attorney may use a POA immediately upon signing.

• It must be witnessed. Improper witnessing annuls legal completion and sets the POA up for contention. Thus make sure the document is witnessed correctly.

• Be careful of restrictions you may not want to be included. Some broad-form POAs include optional clauses often left included, whereas they may not be applicable. These may have regulations on the attorney you may not want to impose.

• You may want to restrict beneficiary changes. If you want the attorney to have power over changes of beneficiaries to life insurance or investment assets, make that clear. If not, clearly restrict the right to change beneficiaries.

A warning which may or may not apply to you

Unfortunately, once authorised with your directive powers, an attorney could feel it is their privilege to become an “empowered benefactor” of your (you, the donor’s) estate once they lose capacity. So, having a lawyer articulate your specific wishes in your Power of Attorney documentation is a good idea.

To empower and entrust another with your authority, may be the last time you can make a responsible decision on your behalf, so make it carefully.

Where significant wealth is involved, consider a POA explicitly designed to give powers to assist in governing your financial affairs.

How can I find more cash to invest?

shutterstock_46368073

One thing is true about building wealth. The discipline of spending less money is the surest path to saving more. But you may have to reform your thinking—we do not deserve to buy something now if we can’t afford it today. Here are a few suggested ways to help you spend less:

• Shop with cash. If you carry a debit or credit card, it is too easy to escalate your buying when out at the mall. Better to put a budgeted amount of money in your pocket and spend no more—make sure you include enough for a treat at the café.

• Clean your clothes at home. Try to buy clothing that can be washed at home, using caution not to shrink your fabrics.

• Don’t fire up a temptation. Don’t bother browsing the catalogues, the clothing racks, or the car lot if you don’t have an honest need.

• Look for freebies. Avoid all the little service charges that hotel chains are starting to slip onto your invoice. Try to include extras with your vacation packages. Buy vacations in domestic dollars if you can. Plan to attend one of the numerous festivities municipalities pay for and provide in the summer holidays. Consider that many entertainment venues offer discounts just before the show.

• Borrow DVDs and CDs at the library. Try your library for movies or music—you may be surprised by their free access. Many have shared password to streaming services such as Netflix though they are clamping down on these methods.

• Take portable picnic coolers to avoid eating out. This can save you hundreds of dollars per month. Picnics are great getaways in the summer and can be carried in coolers in your car.

• Learn the skill of cooking. You can add artistry and relaxation to your fine dining experience by learning to cook. It is easy to rack up over $50 or more with a tip when two eat out. Consider splitting larger meals with your partner when you go out on the town. Avoid supersizing fast food, which may cost more, and add calories.

• Limit prepaying your taxes. Adjust your income tax deductions at work to ensure you aren’t pre-paying too much.

• Do a “needs analysis” by asking, “Do we need it?” Make lists and discuss your actual needs. This is where your partner can help you be honest and accountable by simply discussing every purchase, at, say, over $50—set your dollar figure at a point where you involve the other’s advice.

• Liquidate if you have too much stuff. Space costs money, so consider what is essential. Go over your furniture, books, and general stuff, to determine what you don’t or won’t use in the next five years. If you don’t love it, sell it, or give it away.

• Invest your raise. Avoid spending up to any increase in your income. Instead, plan to invest it.

• Assess the unit price and buy in bulk. Everything is sold in quantity and can be compared with a competing brand by ounce, kilo, serving, etc.

• Buy depreciated cars. Buy vehicles used after a year or two with the factory warranty still on them. Avoid the most significant depreciation that occurs among assets.

• Reduce your vehicle’s weight. Unload excess vehicle weight that can cost gas or battery (with an electric vehicle) consumption. Similarly, having your tires carry the correct PSI will offer better gas mileage.

• Know that it all eventually goes on sale. It makes sense to wait it out for the seasonal sales. Stores often begin to sell their seasonal stock, including clothing, before the need. So if you are savvy, mark the best times to buy in your calendar. This is also true of travel bargains.

• Pay cash only for groceries. Have you ever spent double what you intended on items that can be eaten? If you pay money, you are forced to budget regardless of your hunger, sticking to the necessary things.

• Know where the quality brands are. Don’t purchase items that will wear out prematurely and have to be replaced; instead, buy quality, but shop around for the best prices.

• Buy more when it is cheap. If you can buy tuna, salmon or spaghetti at 30% less than usual, why not stock up on it? But don’t buy multiple “on-sale” items if you don’t need higher quantities.

• Make fun fast food. You can make fast food, such as fruit or vegetable trays, for drives, hikes, or stay-overs.

• Use public transit. By not driving all the time, you may save some money. Many municipalities offer cheap bus or train transportation. Some prefer not to go if they live in a large city such as Vancouver or Toronto. There are car-sharing co-operatives in larger cities. They can mitigate insurance, fuel, and repair costs on top of any lease or loan payment (along with interest). Car rentals can be cheaper in the winter and on weekends.

• Cut your hair between significant cuts. Sometimes a minor home trim will add another week before you must visit the barber or hairdresser.

• Utilize the secondary market. Most of the world’s literature is available online for under $5 for the entire life-work of an author, sold on Amazon Kindle. If you are a bookworm, Amazon.com or Abebooks.com may help you find the book; or perhaps find a camera on eBay at 50% off the cost.

• Make the park your gym. Why not walk around the park’s pond and get outside as a bonus?

• Adjust your thermostat. You can save a few hundred dollars per year by juggling temperatures by one to two degrees on your thermostat (wear sweaters or shed clothing).

• Know how and when to return merchandise. Ask about return policies when shopping. Many admit mistakes or displeasure with a product and promptly return it according to policy—in the free market, that is more than fair! Often it is wise to reassess a purchase in a day or two.

• Pre-pay certain vacation costs. Prepaying for a resort food plan in domestic dollars to avoid paying later for dollar-exchange loss can make budgeting sense because you’ve got to eat anyway. Likewise, prepaying museum ticket passes can save money and side-step long lineups.

Stop—don’t shop! Tell yourself to stop shopping when you have no imminent need. Try walking, sitting in a café or reading instead.

What insurance protects travelers and visitors?

These insurance plans can offer emergency medical protection for visitors, immigrants, international students and residents who are not covered by government health insurance. Visiting guests can be covered by valid medical health insurance, which begins upon arrival here insofar as it is bought ahead of travel.

Emergency medical expenses While travelling outside your country or locality, your government health insurance may partially cover some costs. Daily or annual coverage is great if you travel to warmer climates in the winter or travel year-round.

What about travel coverage? International travel covers an insured individual with emergency insurance which pays for expenses related to an emergency medical condition (covered by the plan). These expenses may be a hospital stay, prescription drugs, ambulance transportation, etc. Please refer to the policy for more details.

Coverage can include these expenses:

  • Bedside companion travel and sustenance allowance
  • Ambulance transportation
  • Diagnostic (X-ray, lab tests)
  • Hospital (semi-private room)
  • Flight and travel accident coverage
  • Prescription drugs
  • Physician or surgeon
  • Return transportation to the location of travel departure if emergency medical attention is needed
  • Emergency dental treatment by a licensed dentist and associated cost of prescription drugs while the insured is travelling.
  • Accidental injury, dismemberment, or death by accident where the accident occurred during travel
  • Loss/damage of baggage and personal effects
  • Trip cancellation and interruption

Understand the details. It is better to fill in a form and get a copy of the questions and answers within a contract pertaining to any age-related or medical underwriting processes, if not in person, via a digital meeting and signature. File these documents in case of the need to claim against travel insurance. Avoid policy cancellation due to misinforming the insurer concerning medical questions, which must reveal all medical history and medications used, plus retain a hard copy as your proof.

Note: Refer to the policy, which may vary. Individual plans may be purchased outside of an employer’s group plan.

The Buy-Sell Agreement: A financial safeguards for shareholders

 

 

 

 

 

 

The Buy-Sell agreement is one of the most important legal documents a business can have to protect shareholders if a business owner/partner dies.

They must be planned ahead Whether you own a partnership or corporation, we can help you set up a buy-sell agreement while you are alive and capable of doing so. We will help you value your company and set up the proper Buy-Sell Agreement to meet Canada Revenue Agency’s (CRA’s) standards.

Funding the Agreement We can determine if the company has the cash flow or a large amount of money available to support the buy-out of the deceased or disabled owner. If not, life insurance can be used to fund a buy-sell agreement as it can pay a large amount of tax-free capital at the right time of the death of a business owner/partner.

Making it legally binding We can meet with your lawyer and the buyers’ lawyers. After it is drafted, all parties will review it to their satisfaction and sign it to make it legal. It is suggested that life insurance be purchased first to ensure one is insurable. Even where there is a medical problem, in most cases, an insurer is willing to design a policy to suit the risk based on the respective health of the individual.

The time-line of Long-Term Care

shutterstock_98508314

The lifetime care time-horizon

Respite care provides temporary relief to those caring for family members who might otherwise require permanent placement in a facility outside of the home. Respite programs provide planned short-term, time-limited breaks for families and other unpaid primary caregivers of adults with intellectual and physical disabilities.

Shared help from loved ones, and government part-time home care services, help relieve the primary at-home caregivers to enable them to maintain their wellness. It allows an ageing population to move gracefully towards the potential need for 24/7 care and a palliative care program when medical care or treatment concentrates on reducing the severity of the symptoms of diseases relating to ageing rather than striving to reverse the progression of the disease. At this final stage of care, the goal is to prevent and relieve suffering for people facing serious, long-term complex illnesses.

 

 

What does Long-term Care Insurance (LTC) offer? Long-term care insurance provides money for the care you both desire and need. With LTC Insurance, you have the following:

  • Broader choices about the quality and amount of care you receive.
  • Increase of choices when determining where you receive care and by whom.

You may want to consider Longterm Care Insurance for yourself or your loved ones, which helps pay for services the family members may not be able to provide. Talk to your advisor about the life insurance policies available for these services.

Sources: Canadian Institute for Health Information, Alzheimer Society website, Statistics Canada

Source: Some of the concepts and information are used with the permission of Patty Randall, who is widely considered a leading advocate on the need for care-years planning in our country. Visit her website: “Aging Successfully with Passion and Purpose and Care-Years Planning”, online at www.longtermcarecanada.com for discussions and ideas and to obtain family materials on this issue.

 

How do I make financial agreements with my fiscal partner?

When establishing a financial strategy involving other stakeholders, such as paying down a mortgage, develop a written plan that all parties agree on. You can create written point-form agreements for each to sign in investing, registered investment planning, debt repayment, etc.

shutterstock_104366330 (1)

When determining your goals, it is essential to think positively and avoid language such as, “We will never have enough to retire,” “We can’t seem to get ahead,” or “This debt is killing us.” Statements like this often become self-fulfilling.

Instead, it is essential to design an action plan and start working towards it with all the stakeholders, such as your spouse or partner, referred to as your fiscal partner. Write your goals out regarding financial concerns such as:

Reduce or eliminate debt. One of the encumbrances of investing for retirement is that you may be servicing too much credit card debt, much of which is interest. Both fiscal partners may have credit cards doubling the family debt load and vastly reducing your net worth. Thus, paying down the debt on all credit cards makes sense, starting with those with the highest interest rates first. Aim to be 100 % debt-free of abnormal debt-weighting in your net worth statement where possible (mortgages and car payments are typical).

You and your fiscal partner will appreciate the new clarity and increased financial freedom this gives. Slavery to debt repayment is financial bondage and will increase fiscal-related emotional stress on responsible partners.

You can start or maximise your monthly investment plan. Your plan will depend on your income and expenses. If you are young, begin investing now. Any given sum can frequently double depending on time and interest rate growth. At 6 %, it can double every 12 years; at 4 % every 18 years. Divide the interest rate into 72 to get the years until doubling occurs.

This simple mathematical illustration reveals the importance of beginning to invest while you are young. If you are near retirement, you may ascertain that you need to ramp up your investing, increasingly over the fewer years you have. The average Canadian retires now at age 62. Become aware of your retirement options, choosing agreed strategies with your partner beforehand.

Reallocate assets as you near retirement. A portfolio still invested in nearly 100 % equities near retirement is risky. To reduce stock market risk, a portfolio may have some fixed income (government bonds, corporate bonds, safe mortgages, and real estate)—your partner’s risk tolerance while investing.

Take advantage of tax-saving vehicles. Registered investment vehicles can help you reduce or defer the tax hit. Some plans can offer government grants that supplement your investment contribution to help your children attend post-secondary school. Discuss the viability of tax arrangements using registered investments best suited to both fiscal partners.

Don’t sell suitable investments amidst a volatile market loss. It may be better to stay invested and adjust your portfolio after the market begins to retrace upward, any losses after a market volatility period. If you hold an excellent fund, the stocks within that fund are probably good. Nevertheless, please keep your investment goals in mind, get periodic updates, and review the situation with your fiscal partner. Your financial partner may be unable to handle the stress caused by a volatile market, so plan with this in mind.

Maintain financial accounts with transparency. Total honesty is necessary. Spouses and partners who share mutual financial goals have a right to be aware of the banking and investment accounts and the movement of funds via frequent, transparent discussion. One spouse should only borrow and use credit with the other spouse’s agreement, where funds must be accounted for together in mutual fiscal arrangements.

There should only be personal boundaries where agreed, such as business agreements, risk, or debt and income necessary for solvency. You can set such boundaries in advance, or hard feelings can develop. Business accounts or contracts increasing risk should not co-mingle with personal finance or funds if you are incorporated. Sole proprietors should view business debt as personal debts.