For the majority of families, life insurance needs will change over time. Typically, more coverage is required while a family is still young and growing, with a decreasing amount required as the family finances mature. However, when it comes to insurance, permanent life insurance policies are designed to provide a level amount of coverage with level premiums for the lifetime of the policy. If you buy permanent insurance to cover all your needs, there’s a possibility you’ll be paying for more coverage than you need in the later years. Another option is term insurance, which is much less expensive in the early years, but becomes more costly than permanent insurance down the road, eventually surpassing the cost of permanent insurance. If you’re looking for the best overall solution for insurance protection, why not choose both? Oftentimes, the best insurance protection can come from a Term/Perm combination – that is, a small amount of permanent insurance, PLUS a term rider to cover the remaining amount. With this Term/Perm blend, you can ensure that coverage is tailored to your lifestyle over a period of time and within your initial budget. So, you get lots of coverage in the initial years of your policy, while knowing that you have some amount of coverage for the duration of your life – for maximum flexibility. Some of the benefits of using a Term/Perm blend of insurance coverage include: Coverage is aligned to your fluctuating needs over time Potential for a lower total cost over time At renewal for the term portion, you have the option to renew, convert, drop and/or add other coverages – options are great! It allows you to lock in permanent rates TODAY to guarantee the cost of the permanent coverage for life Some plans allow you to build cash values to support “premium vacations”. The fact is that the earlier in life that you purchase permanent coverage, the greater impact it can have as a financial instrument in your overall financial plan. So be sure to set yourself up for success from the start! Want to know more about the Term/Perm insurance strategy, be sure to contact our office.

Perhaps your employer provides you with group Long Term Disability (LTD) coverage. This benefit is a valuable component of most benefits packages, but may not adequately cover the loss of income that results from a disability. Here are a few LTD limitations you should know about when you’re evaluating the total insurance amount required to meet your needs in the event that you lose your income due to sickness or injury. LTD typically only covers base salary and not bonuses High income earners may be under-insured as most group LTD plans have built in maximums LTD usually does not include benefits for partial disability Most LTD plans include a two-year regular occupation definition of disability, switching to any occupation thereafter (any occupation means if you can work at any job you’re qualified for by education or experience, even for lower pay, your benefits will cease) Employers review employee benefits regularly and make adjustments to contain costs, so at any time, your LTD plan can change, and your group benefits are not within your control You can’t take LTD coverage with you when you leave an employer These are just some of the LTD limitations that you should be aware of that could impact a successful claim. A simple review of your benefits package and a review of the added security that comes with owning your own disability insurance will help you determine if integrating personal coverage into your overall benefits portfolio is right for you and your circumstances. For more information on the importance of living benefits, have a look at Enhancing Your Benefits with Critical Illness and Disability Insurance, Strengthening Your Safety Net with Critical Illness Insurance, Insuring Your Greatest Asset with Disability Insurance and SMART TALK… about living benefits. And if you have any questions or need a little more information about income replacement, be sure to contact our office.

Rimba was closing in on 80 years of age, and still had vivid memories of her great aunt Banou. Nearly 50 years had passed since she’d seen her favourite relative, but she never forgot her, the stories of her ‘boujee bijou’ or the shenanigans that ensued after her aunt’s passing. Banou left all her worldly possessions equally to her nine surviving great nieces but hadn’t earmarked a single thing for any of them. Great antics and high jinx ensued to determine who would be the next owner of this or that, but the one heirloom coveted by all was the gem (affectionately called ‘boujee bijou’) that Banou had discovered as a young woman of 23 on one of the island beaches. The gem was deep green, very grand, crystal clear, and worth absolutely nothing. But the truth of it never slowed island rumours about its priceless worth. So, while Banou lived a quiet meagre life, she revelled in the royal treatment lavished on her by all the islanders when she was out and about, great thanks to her ‘boujee bijou’. Rimba often lost track of which of her cousins was in possession of the gem at any given time during the ensuing decades, but they gathered every now and then to gleefully reminisce over the ‘boujee bijou’ monkey business, what with all the plotting and scheming and pinching it from one another over the years. It was all in good fun. But still, every time that it was mentioned among them, other stories were recalled about families who weren’t so lucky— how the succession of even the least valuable but sentimental possessions had caused disappointment, family feuds and in some cases, had even led to a few serious legal actions. As Banou’s last surviving great niece, Rimba said she wanted to distribute her possessions with dignity. So, she took inventory of her assets and specifically bequeathed those of financial value to her son in her will. And, since she too was a favourite aunt to her seven nieces and nephews, she knew that a special memento from Aunt Rimba might mean the world to them. After a visit from her son to see which possessions of sentimental value he might like, she had tea with each of her nieces and nephews and taped their names under their favourite items, including all seven under Banou’s boujee bijou! Consider this… Plan ahead for the distribution of your financial and sentimental valuables to avoid unintended consequences and to make any necessary arrangement for equalizing your estate. To learn more about the distribution of your valuables, watch our short videos: INFOclip: Protecting Your Estate, SMART talk …about digital assets, and SMART talk…about will planning and drafting, and read our article entitled: Sharing your Wealth with the Next Generation.

When it comes to applying for insurance, you and your Advisor determine how much and what kind of coverage best suits your need (like life insurance and/or living benefits), select the plan that is right for you, and complete an insurance application. Once you apply, the insurance company also has some decisions to make. When the insurance company’s underwriters review your application, and evaluate any medical evidence you’ve provided, they get to work making an underwriting decision to determine if your application will be approved at the company’s standard insurance rates – meaning no extra premium is required to cover the risk. It’s the underwriter’s responsibility to evaluate the risk each applicant poses to the insurance company and other insureds, and only those deemed to pose a standard risk for their cohort will be charged the published rates. Depending on the type of extra risk an applicant may pose, underwriters could offer something other than the standard rates. They could offer a rating, which means they add a percentage to the standard rates. Or for some types of insurance, they offer coverage but exclude a certain medical condition. And for very high risks, they may decline to offer coverage altogether. Every medical condition is evaluated by its own set of guidelines, so when an applicant has more than a single medical condition or takes several medications, the underwriting process can become more complex, as you can imagine. It’s not uncommon for applicants to be surprised that what they thought was a very benign condition actually disqualifies them from standard rates, or for underwriters to review the facts of a case and offer coverage to applicants who believed themselves to be ineligible. But you needn’t go through the entire application process to get an idea of how underwriters may classify your health risk. And if there’s a chance your health may pose a higher than standard risk, this doesn’t mean there aren’t plenty of options available to you. When you complete an application for insurance, we’ll likely ask you questions about any medications you take, the last time you were hospitalized or missed work due to health, and why. Advisors ask these questions because we have tools available to get a preliminary idea of whether certain medical conditions pose extra risk. This allows us to gather additional information, engage assistance to prepare your application for underwriting, and to set expectations if we think there may be any underwriting concerns. Understanding your medical history and conditions allows us to recommend insurance companies and products that are the best fit for your needs and your unique situation. When you help us to understand your health history in advance of sending an application we can work to minimize the likelihood of any underwriting surprises and provide you with the optimum insurance solutions for you. For a similar article, read You Have More Insurance Options Than You Think and if you have any questions, be sure to contact our office.

The business of adding actuarial science to insurance underwriting goes back as far as the late 17th century and included the production of life tables, the application of compound interest, as well as calculating the present value of the future liability – the very foundation of life insurance premiums as we know them. So, what does all of this have to do with gender? Well, in the early days, not very much. Actuaries of the time had their hands quite full wading through individual birth and death records to calculate premiums based on the risk factor that remains of utmost importance even today, the age of the person being insured. At that time, no distinction was made between women and men and, as a result, unisex insurance pricing was the norm. However, around 1880, the rate of male mortality began to rise causing insurance brokers to reflect those differences in the pricing of life insurance rates (1). This mortality/gender gap is especially evident in those that are older: 57% of all those aged 65 are female and by age 85 women constitute 67% of the population (2). And in Canada, women, on average, live 4 years longer than men (3). So, shouldn’t men be paying more for their life insurance? While in Canada that is typically the case with most life insurance policies, it is not the universal view. For example, since 2012, the European Union has prohibited pricing based on gender for life, health and even auto insurance (4). Perhaps this evokes a question of fairness… should a lower risk group, in this case women, subsidize the higher-risk group, male policyholders? The question of why women outlive men, at least on average, continues to be a hot topic. Early observations have concluded that smoking and cardiovascular disease are the male culprits, but these days we also possess a deeper understanding of the role of stress, as well as the behavioural and cultural patterns, that may predispose men to take more risks, drink more alcohol and seek medical care less often. The latter point is particularly harmful as although women are often thought to be diagnosed with depression more often, men generally have much higher suicide rates (5). This was highlighted most recently when United States Senator John Fetterman was hospitalized voluntarily for depression, drawing praise for making his struggle with mental health public (6). Compare this with 1972 United States senator and Vice-Presidential candidate Thomas Eagleton, who dropped from the ticket a week after disclosing his treatment for depression in the past – two very different stories indeed (7). The fact remains that today’s discussions on gender run deeper than the traditional female-male divide. New perspectives on gender identity, roles and their impact on health bring new understanding and continue to evolve. References 1. Crimmins, Eileen et al. Differences Between Men and Women in mortality and the Health Dimensions of the Morbidity Process. Clinical Chemistry. Volume 65, No. 1, 2019, pages 135-145. 2. Shmerling, Robert H., MD. Why men often die earlier than women. Harvard Health Blog, health.harvard.edu. June 22, 2020 3. Statista.com. Life expectancy at birth in Canada from 2010-2020 by gender. September 2022. 4. Fontinelle, Amy. Gender and Insurance Costs. Investopedia.com. July 25, 2022. 5. Mental Health and Suicide in Canada-Key Takeaways. Mentalhealhcommisison.ca. July 6, 2022. 6. Barry, Ellen and Gay, Sheryl. Fetterman’s Disclosure of Depression Signals New Openness on Mental Health. Nytimes.com. February 17, 2023 7. Greenfield, Jeff. What John Fetterman Should know About Thomas Eagleton. Politico.com. February 17, 2023.

Did you know that medical expenses currently rank as the number three cause of bankruptcy in Canada? Despite this, critical illness insurance (CI), which can help offset medical costs, often gets overlooked for other types of coverage like life insurance. If faced with an unexpected illness, disability coverage, whether part of a group plan or even as a stand-alone policy, generally will not cover your full income. This is a concern since out-of-pocket expenses typically increase anytime something medically prevents someone from working for an extended period of time. Likewise, any additional supplemental costs may only partially be covered by your health insurance – depending on your coverage. The truth is that in the event of an unforeseen illness, you could be faced with a shortfall, even with full disability coverage. This is where critical illness coverage comes in. Below are some factors to consider when deliberating on whether to bundle critical illness coverage with your disability insurance: I already have disability insurance, do I also need critical illness insurance? You already have DI coverage – that’s great! However, since they are fundamentally different products with different claim triggers, consider the possibility of claim for each. Would the disability pay out if the illness returns you to work before the elimination period? Would the critical illness pay out if you are off work due to an injury? Even if one pays out, will the income be sufficient? If both policies paid out, it wouldn’t be the worst thing that happened, and it would also help to support any increase in monthly expenses, whether caused by inflation or unexpected medical expenses. It’s important to remember that despite the overlap, both products cover off very different needs. Critical illness insurance is expensive! Insurance companies price their products according to risk. If there’s an elevated risk, you can expect higher premiums, whether it’s related to age, health status, or in this case the product having a higher claims rate. The best approach where affordability is an issue, is to try to fit it into your budget at a price point you’re comfortable with. A viable option is term insurance for critical illness. Compared to life insurance renewals, the premium renewal jumps can be relatively smaller and there are cases where the first renewal cost is LESS EXPENSIVE than a newly attained age quote. It’s an option. How much critical illness insurance is enough? There is no right answer to this as there are so many moving parts within critical illness such as recovery period, cost of procedures, medication, and unpaid leave from work, etc. One could estimate CI needs by estimating income (for example, 1 to 2 times your or your spouse’s annual salary), your expenses over a fixed period, or whatever fits your budget. Regardless of how you calculate your needs, some CI coverage is always better than leaving yourself at risk – even $10,000 could mean the difference (and relief!) between when your income ends and your disability coverage begins. I will self insure. Using personal savings, family income, or taxable investments such as RRSPs may seem like a good idea, but typically it becomes the more costly way of dealing with additional expenses. Using your own dollars is never the best option. Nothing is going to happen to me. We sure hope not, but statistics and life tell us otherwise and you don’t want to be left vulnerable in the case of an unexpected illness. Try this Strengthening Your Safety Net with Critical Illness Insurance calculator to discover the likelihood of some commonly known risks actually occurring. Risks are inevitable and it’s important to build your safety net today for all of your tomorrows. If you have any questions or are interested in more calculators and tools to help you learn more about the benefits of insurance, let us know!

A lot has changed in the past 30 years, and the financial industry is no exception when it comes to meeting the financial needs of women, which often differ from those of men. With women now making many household financial decisions, dynamics are evolving in family finances, insurance, investments, and retirement planning. Sound planning should involve a holistic approach and include collaboration to include multiple perspectives. Women have a growing role in planning and finances According to Wealth Professional, “today, women are the primary breadwinners in over 31% of households in Canada. By 2024, they are anticipated to control about $2.7 trillion of the country’s total household wealth. Looking further out into the next several decades, they stand to receive 70% of intergenerational wealth transfers totalling $71trillion (1).” Women have a longer life expectancy On average, Canadian women are living longer than men by approximately 3.5 years (84.74 vs 81.15), and many are living past age 90 (2). As women determine retirement income needs, it’s important to ensure that these additional years are covered as increased longevity increases the likelihood of needing home care services or entering an assisted living facility. Women, child rearing, and eldercare While numbers might be edging upwards for men who become stay-at-home parents, women are still four times more likely to take on this role (3). Women are also far more likely to reduce work hours, take time off or leave work to care for aging parents. In fact, adult daughters provide twice as many eldercare hours to aging parents when compared with adult sons (4).These breaks in employment can have a serious impact on the financial future of a woman. According to one 2018 study, “stay-at-home parents are half as likely to get a job interview as parents who have been laid off. And the mothers who do find a job are often penalized for their time away. “[W]omen who spend three years or more out of the workforce lose 37% of their earning power. [And] study after study has shown that even the women who do successfully re-enter the workforce after a career break never fully catch up to their earnings potential (5).” So, what does this mean if you are a woman? Well, you and your partner need to carefully consider risk. What would your income look like if your marital status changed later in life or if your partner were to pass on or become sick, or injured and unable to earn an income? A thorough needs analysis can provide you with peace of mind that your financial future is secure. When your income is crucial If you are a single-income household, you are certainly aware of all the financial responsibilities that rest on your shoulders. Sound planning is vital since your needs will be different than a two-income household. It is important to consider disability insurance coverage, along with critical illness insurance because there isn’t a second income to defray unexpected expenses. A solid retirement plan can round out your approach, giving you security and peace of mind. References 1. Almazora, Leo. Are Canadian women entering an age of financial empowerment? Wealth Professional. March 8, 2021. 2. Wordometer. Life Expectancy of the World Population. Worldmeter. March, 2022. 3. Honderich, Holly. Why ‘stay-at-home parent’ is a job title. BBC. April 14, 2021. 4. Almazora, Leo. How the gender pay gap adds up over women’s lifetimes. Wealth Professional. May 16, 2018. 5. IBID.