Affiliated with Sentinel Life & Sentinel Financial Management Corp.
Commentary - Hans H. Mathisen
How Will I Pay for LONG TERM CARE?- The January 2003, issue of LIFE LETTER focuses on an issue most of us will have to face: Will I (or we) be able to pay for the Long Term Care I (or we) will likely require in my or our Senior years? If you keep the information we send you, please refer to LIFE LETTER for September/October, 2002. With that mailing you got a lot of information on "DISABILITY INSURANCE FOR RETIREES". And please call me with any questions you have.
Financial Plans and Divorce - The break-up of a marriage is painful in many ways, and also financially. LIFE LETTER for February 2003, mentions three items to be considered. The one point I want to dwell on is Critical Illness Insurance:
A special insert - Don't
Let Your Retirement Dreams Slip Away! - details how the cost of
Critical Illness can seriously reduce the quality of life in retirement
for those who may not have $75,000.00 cash available on short notice.
If you would like a pamphlet on Critical Illness Insurance, please call
for more information.
THE STOCK MARKETS - 2002 was a dismal year for all major world market indexes. What should or could you do?
Answer: It depends. It depends
upon where your money is invested now. For example, bonds have done
very well for the past three years. And many analysts are now suggesting
that it may be too late to go into bonds, and that it could be prudent
to move from bonds into equities.
Because every person has his or her own goals and objectives when it comes to investing, your investment portfolio will need individual attention, love and care. We encourage you to call for an appointment to review your investment portfolio.
How Will I Pay for Long Term Care?
Kathleen is concerned about the spiraling costs, and often limited availability, of long-term care facilities. She became aware first-hand of these costs as her mother and an uncle had lived in nursing homes. Even a subsidized facility can cost up to $4,770 extra per month out-of-pocket (Source: Province of Alberta health care website). The Calgary Herald reported in September 2002 that a new long term care facility had recently opened and only had one bed available two months later.
People over the age of 65 make up 10.1% of the population in Alberta. This is projected to be 14.5% by 2016 and 20% in 2026 (Source: Fact Sheet: A Portrait of Alberta Seniors). Percentages tend to be even higher for the rest of Canada.
As the population ages, the under funded
and over burdened public programs will face even more strain. According
to the New England Journal of Medicine, 43% of people who turned 65
in 1990 will spend some time in a nursing home before they die.
Long term care facility shortfalls aren't
the only things Kathleen is worried about. She likes her independence
and wants the choice of staying in her own home as long as possible.
In her mind, a long-term care facility is a last resort.
Private nursing and personal support personnel cost money. According to Victoria Order of Nurses, a registered nurse costs $30 to $38 per hour; a medical services aid costs $14 to $19 per hour; and a personal support worker costs $19.50 or more per hour.
The last thing Kathleen wants is to deplete
her savings or become a burden on family and friends. She doesn't want
the lives of her loved ones disrupted along with hers if she can't look
after herself. But where will the money come from if it becomes necessary
for her to get long term care?
The answer can be found in Long Term Care
Insurance. Available to people between the ages of 30 and 80, it pays
a benefit directly to the insured when health or personal care services
are required at the order of a physician. Benefits range from $10 to
$300 per day, are paid after an elimination period is satisfied and
in addition to government benefits. The elimination period is the number
of days the insured must be under care. Payments can start on day one
or after 30, 60, or 90 days, depending on the policy.
Some conditions must be met before a benefit
will be paid. Typically, a policy will pay a benefit if the insured
loses the ability to care for himself or herself due to cognitive impairment
or the inability to do two or more activities of daily living. The insured
must also require professional assistance at home or the services of
a long term care facility. Benefits are not paid if an immediate family
member provides the services.
What does Long Term Care Insurance protect? Primarily your hard earned retirement assets, your spouse's retirement, your children's inheritance, and your plans for charitable gifting. But, more importantly, it protects your independence, quality of life, freedom of choice, and dignity.
Want to learn more about Long Term Care Insurance? Call today!
Call Hans Mathisen today at (306)242-7042.
© 2003 Bowen Financial Inc. and Donald F. Pooley, Inc.
Financial Plans and Divorce
Statistics show that about half of marriages in Canada end in divorce. Andrew and Sara are about to end their marriage and are concerned about the changes that will have to be made to their financial and estate plans. Some considerations are:
Life Insurance - The first thing that needs to be done is review beneficiary designations. If there are children, they may be the new beneficiaries. Trustees will be needed if they are minors. This will affect both personal plans and group benefits. When one parent is responsible for child support payments, new life insurance may be needed to cover this obligation.
After the sale of their house, Andrew and Sara may each buy a new home with their share of the proceeds as the down payment. As either may have a new mortgage, life insurance will be needed to cover it.
If either remarries, a complete review of their life insurance needs will be in order. If the various needs and obligations are not adequately provided for, a long and costly legal battle may follow.
Wills - Andrew and Sara will each need to make new wills. Provisions will need to be made for both child custody and support obligations. It is best to have a lawyer prepare the new wills, as do-it-yourself will kits are usually not adequate.
Unless a will is specifically prepared in anticipation
of a marriage, new wills need to be done again after either remarries.
Prior obligations still need to be provided for in the new will.
Disability Insurance - Both Andrew and Sara will be on their own and no longer able to rely on each other should either become disabled. Group benefits, if they have them, may not be adequate to meet their needs. Personal disability insurance may be needed to provide for every day needs and other obligations should illness or injury prevent either from working for a period of time. A complete review and analysis of their disability needs should be done.
Critical Illness Insurance - This insurance provides a lump-sum tax-free benefit if the insured survives a heart attack, cancer, stroke, or other listed serious illness. If either Andrew or Sara suffers a critical illness, money should be the least of their worries.
Registered Retirement Savings Plans - If one spouse has more in their RRSP than the other, the divorce settlement may require an equalization of funds. Canada Customs and Revenue Agency allows tax-free transfers between RRSP plans of one spouse to the other due to a marriage breakdown. RRSP beneficiaries need to be changed as well.
Provision for the tax liability on death needs to be considered. Life insurance is a very economical way to pay the taxman and assures the full value of their RRSPs goes to the beneficiaries.
A marriage breakdown is very disruptive for the whole
family. Future disruptions can be minimized by dealing with the financial
and estate plans today. A little time and a few dollars now can avoid
months of delays and thousands in expenses later.
Want help getting your financial and estate plans in order?
Hans Mathisen today at (306)242-7042.
© 2003 Bowen Financial Inc. and Donald F. Pooley, Inc.
RRSPs are the primary retirement savings vehicle for many Canadians. Being a major holder of investment capital, they may be the only vehicle available in case of a significant emergency - medical or otherwise.
If a critical illness strikes you, chances are you will survive... but will your finances? Give yourself options by protecting your retirement with an EquiLiving Critical Illness insurance policy.
John is 45 years old. He has just been diagnosed with a critical illness and has heard about a lifepsaving treatment only available in the U.S. This treatment costs $50,000 USD, or roughly $75,000 Canadian. Unfortunately, John's group and government health plans do not cover the treatment. Where will the money come from? Let's look at two options:
EquiLiving helps you keep your retirement dreams intact even if you suffer from a covered critical illness. EquiLiving provides you with a lump sum enefit in the event you are diagnosed with and survive the waiting period of any one of the 22 covered conditions. The benefit can be used however you wish: to afford the best treatment in the world, to pay off debt, or to simply spend time with loved ones. All this without sacrificing your retirment savings.
EquiLiving ... Protection When It's Critical
For more information, contact Hans Mathisen .
Mutual confidence is the power that binds together all harmonious human relationships.