MONEYIS4U

The Uncomfortable Truth: Aging Without Insurance.

• Jacqueline Divine Correia • Season 2 • Episode 3

Share episode

Send us a text

Planning for your financial future requires more than just saving money - it demands strategic protection against life's unpredictable challenges. As we explore in this enlightening episode, insurance planning evolves through different life stages, each requiring specific protection strategies.

Young families with mortgages and dependents often benefit from term life insurance, providing substantial coverage at affordable rates. But that's just the beginning. Critical illness insurance has become increasingly essential as diagnosis rates climb among those under 45. Many people mistakenly believe their employer-provided coverage offers sufficient protection, creating dangerous vulnerabilities if they change jobs or if their employer modifies benefit programs. Personal insurance policies provide continuity regardless of employment changes.

The conversation deepens as we examine how insurance needs shift with age. Critical illness coverage can be secured until age 75 or 100, with premiums locked in at purchase. For those approaching retirement, long-term care considerations become paramount, especially for conditions like Alzheimer's or dementia. Participating whole life insurance can serve dual purposes - providing death benefit protection while building cash value that might later help fund long-term care needs.

Government benefits like CPP and Old Age Security provide baseline support, but rarely sustain the retirement lifestyle most Canadians hope for. This underscores why personalized insurance planning matters - there's no one-size-fits-all solution. Your family history, retirement dreams, travel plans, and health considerations all influence the optimal protection strategy.

Ready to secure your financial future against life's uncertainties? Contact me at info@nwninc.ca to develop a personalized insurance and retirement strategy that evolves with your changing needs. Because ultimately, money is for you - to provide security, peace of mind, and protection through every life stage.

Visit Amazon to purchase "My Farewell and Final Wishes" planning book to help organize your estate information in one place.

https://www.amazon.ca/Farewell-Final-Wishes-Organizer-Important/dp/1778203507/ref=sr_1_1

For more information, feel free to contact us at https://nwminc.ca/
Or follow us on our social platforms:


YouTube https://www.youtube.com/ ⁨@moneyis4u⁩
https://www.linkedin.com/in/jacqueline-correia-1b417727/
https://www.instagram.com/notablewm/
https://www.facebook.com/nwminc.ca

Follow us on all streaming platforms:
https://open.spotify.com/show/2dIwP2K2wBOFEfvJzNuXDo
https://music.amazon.com/podcasts/5a372120-38ef-4655-b650-c4c756265d86/moneyis4u

Speaker 1:

So if you've already purchased critical illness and you, let's say, you're in your 30s and you bought $200,000 and you have it till to age 100, that price will never go up. You're locked in at that price. Now, when we get older, it becomes a little trickier because, again, when we get to a certain age, you can't buy critical illness but there's a long-term care. A lot of people have this misconception that, oh well, my company, I have insurance with my company. One of the sad things about that number one if that insurance, if that company that you're working for, decides to cancel that program, you're now left without insurance. Like when I got laid off from the company that I was working for, I lost the insurance that I had with them, right, I mean, even though I had some insurance outside. That extra that I had with that company was supposed to make up for the shortfall. So now I had to go looking for insurance outside and I had to pay a higher premium because mortality, as you get older, insurance goes up. So you have mortality you have to worry about, right? Are you a risky insurance company? And if they feel that you're a risk, you pay a higher premium.

Speaker 1:

Welcome to Money Is For you in collaboration with Notable Wealth Management Inc. I am Jacqueline Correa, your wealth builder Management Inc. I am Jacqueline Correa, your wealth builder, your host on this journey, and today the topic about it's about putting your financial house in order. This is episode three, a continuation of the first part, and so when we talked about the last time, we talked more about the wills and the power of attorney and just putting things in order. This one is a little bit more about the product.

Speaker 1:

Um, one of the things I'm constantly hearing is um, people are really concerned about will they be able to finance their old age? And especially if, um, something like a alzheimer dimension happens, how can they? You know, what would, what would happen to them? You know, would they have enough money to take care of that? Um, so we're, we're gonna. I'm gonna break it down in two different parts.

Speaker 1:

The way it works is that in our younger like income protection is where we get the life insurance, and when I say the life insurance, most of that time we get like term life insurance, because most of the times we're young then and so we have a lot of debt. And in having a lot of debt is that we have children, we have a mortgage and so we want a lot of insurance but we want it cheap. So we're talking about life insurance. So that's when you'll find that a young couple with a mortgage and, let's say, two babies and a car payment, and you know children's sports and want to put kids through education, they will tend to get more term life insurance Not all people, but they tend to go that route because again, it's locked in for that 20 or 30 years at a cheaper rate, especially if it's a couple in the age of 29 to 35 to 40.

Speaker 1:

Insurance is cheap because it's all based on mortality. So at that age to get a million or $2 million life insurance, it's not going to cost the same as a whole life. Whole life is for the life of you, so it doesn't matter what happens. And also remember life insurance is life insurance. It's not like one is special and the other one isn't. Is that if something were to happen to you tomorrow and you die, whichever one you have, it'll pay out. So at the end of the day, as long as you have life insurance and you're being paid for it and it's active, if you die tomorrow, it'll pay out. It'll pay out. So if you have a million dollars and something happened to you tomorrow, it'll pay out. So if you have a million dollars and something happened to you tomorrow, it'll pay out.

Speaker 1:

The other thing with the life insurance and the ones that I sell so I mean, to my knowledge, all carriers in Canada if you were diagnosed with a critical illness and you had between six months to two years to live I think it is six months to two years to live the insurance company will allow you to take up to $250,000, I think to a maximum of $250,000 of that life insurance to live comfortable. So yeah, again, if you were diagnosed with a major critical illness and you had a terminal illness and you had just like a short period to live, the doctor said, oh, you're going to die in two years, you could actually fill out that document and get some of that money. So what it will do is allow you to live comfortable, right? So again, a life insurance is not just for debt and I think people think, well, oh, only a whole life insurance will do that. No, if you were diagnosed with a terminal illness and you had a maximum of I think it's two years to live, now, every insurance insurance company differs, right? I think some insurance company will not, will not give you that payout as a loan, and some will actually allow you to take from your policy um, not boring from your policy well, you could actually take it and then the remainder of that policy upon debt goes to the beneficiary. So that's something good to know also.

Speaker 1:

But in your working years you need life insurance, you need disability and for you need critical illness, right? Because critical illness is that you know they've been like. I'm looking at my, even my block of business. There's a lot of young people under 40, under 45, and under 50, are being diagnosed with a critical illness. Where, you know, when I first came into the business, we were looking at age 65 and up. Today a lot more younger people are being diagnosed with a critical illness. So sickness is not, you know, it doesn't have a date and it doesn't have, you know, a choice of who you're going to get sick. It's just part of life, right? So, again, as I said, you're giving that 3% of that of your money, of your monthly income, you know, to an insurance company to protect the risk. Sometimes it's less than 3%, but we're just, you know, when we say 3%. It could be life insurance. It could be critical illness and it could be disability.

Speaker 1:

A lot of people have this misconception that, oh well, my company, I have insurance with my company. One of the sad things about that number one if that insurance, if that company that you're working for, decides to cancel that program, you're now left without insurance, like when I got laid off from the company that I was working for, I lost the insurance that I had with them, right? I mean, even though I had some insurance outside. That extra that I had with that company was supposed to make up for the shortfall. So now I had to go looking for insurance outside and I had to pay a higher premium because mortality, as you get older, insurance goes up. So you have mortality you have to worry about. And again you know, weight is a problem, health is a problem, all of those things they look at when you get life insurance. Right, are you a risky insurance company? And if they feel that you're a risk, you pay a higher premium. So those are things that you have to think about.

Speaker 1:

So I always said to my client even though you're insured with a group benefits, you should still have your own personal life insurance, because if you change a company or the company decide not to give you insurance or decide to go to another carrier, which the rules might be different. You already have yours and if also, most of the times, especially a young couple most times you know they may start out with a starter home and then they have a bigger family and they buy a bigger home You're going to need more insurance or you know things are going to change. So if you have your personal insurance and I'm not talking the ones where the lender is offering you, I'm talking about personal life insurance you get to carry that for you know, as long as you want to and as long as it's maintaining your financial needs, it's yours. You don't have to worry that. You know you now have to go look for insurance. Maybe now you've diagnosed with something. If you already have the insurance, you're locked in and all our contracts that we sell you could convert that to a whole life at any time without evidence of insurability. So it means once you got approved with that insurance and you decide, let's say you had a million dollars but now you want to convert some of that to whole life, you can do that without having to go through the medical process. It's going to cost you some more money, but again, it's all part of that package. So it's always said to my clients get your own insurance. The only time you should be holding on to group insurance is if you've already been diagnosed with something and you're uninsurable. But if you're young, you can get the insurance. Get it Okay.

Speaker 1:

Now again, what I said to you on my last episode was check to see what your disability is. If you're working for an employee, some companies will only cover you up to a maximum $2,500. And sometimes you're covered for mostly 24 months. You're on there up until $865, but you're only covered. Maybe they're only covering for a two-year period and then you would have to come back to work. So after that, if you're past two years, they may say well, you're not covering here anymore, so you have to go back, and then, if you continue to get sick, you come back off again. But most companies are like that and so if you're only getting $2,500 and you're making about $100,000 or $120,000 or $80,000, you may want to top that up to bring it up to either $4,000 or $35,000. It depends what you would need. Now, when you get your own personal insurance outside, they'll cover you up to 80% of your salary. So let's say you had $2,500 and now you need another $2,500. You can get that outside so and again, it's not being taxed like the one is being taxed at work. So if you insure for $2,500, you'll get the full $2,500. So it's non-taxable. So that's a good thing.

Speaker 1:

Critical illness it's something that I'm a strong believer of. I believe that everybody should have it. You can have critical illness from the day you bite until to age 100. Especially, some carriers will stop at 75 and some carriers will go to 100. But the more and so the more that we are seeing it's that there's a need to have critical illness to age 100. So if you've already purchased critical illness and let's say you're in your 30s and you bought 200,000 and you have it till to age 100, that price will never go up. You're locked in at that price. Now, when we get older, it becomes a little trickier because again, when we get to a certain age, you can't buy critical illness but there's a long-term care. Now long-term care has become a little bit more trickier, but that's for old, like for anything past 48, you're now planning for long-term care. So you can't really purchase long-term care when you're younger, but you'll get it more in your more adult years, right, so that is more your retirement years.

Speaker 1:

But when you look at the chart, you should all have life insurance, whether it's term life For me, what I have, I have a combination of both. So what I have, I have some term life and I had those term life when my son was in university and I had a mortgage. Well, I still have a mortgage, but I needed more insurance, right. And then I have participated in whole life. So what my intention was and I had a couple different intentions why I did it this way One I come from a long life. My parents died in their 90s, so that's how the insurance company also look at your stuff when they start doing the underwriting. Does this person have cancer in their family? You know they have short life. Is the parents die before age 65? All of that has to do with how they rate you. But when I look at my parents, I come from parents with long life, so the chances are I'm also going to have a long life. So I have to plan for old age and in doing that, because of my weight, I wouldn't be qualified for long-term care.

Speaker 1:

So what I have done is I started to convert some of my term life to whole life and so, as my term expires, the whole life. Because with participating whole life, the product itself, like the dividend, buys more insurance. So the product continues to grow. So if you buy a hundred thousand whole life, in 20 years that a hundred thousand will become 200,000. So that is like having a mortgage and you like, let's say, you pay for this mortgage for 20 years but the equity in your home is now double. Well, the life insurance, these are cash value.

Speaker 1:

Participate in whole life. This is what it's doing. It's not a UL policy. Again, a UL policy is a little bit more trickier and I don't. That's just, you know, when I explain to my clients other than if they want it, I always say you know, you, you have to be an investor to be like looking at UL policies. But if it's just a straight, you wanted to do the simple, you know policy to grow to get you, you know, when you get to old age, participate in whole life is a better product. Ul it's more for, like you know, people that want to, you know, take more risks in the investment market and stuff like that. So, again, that's what I did.

Speaker 1:

So the whole intention for me doing that is that as my term expires, the participate in whole life will be the same, equivalent to what I had as a term life Right same equivalent to what I had as a term life right. So I will always have the same amount of insurance I had as term, but now as whole life. And again, that is me planning long term. So that's how I've done it. I've planned for long term because at some point I look at it, if I needed to plan for old age, I can draw from those participate in whole life right as my offset and entry, because I do have critical illness I don't have long-term care, but I have to think about that as part of my investment planning, as my long-term planning. So my participate in whole life products is what I look at. If I needed to and I needed to draw from those. Those products will have enough money in them as I age into old age and I can draw from them and the remainder will transfer to the executors and my beneficiary upon debt, right? So that's how I've planned it.

Speaker 1:

And so when I sit with my clients, these are things we talk about as part of estate planning, right. You know we talk about the short term goals, what we need to fit now and what are the long-term goals? Right? And so, as I said, the long-term goals in the long-term goals is that our critical illness the critical illness could be up to 75, but then after 75 it dies and if nothing ever happens to you, you've just paid for nothing, but then you can plan it to age 100. It's going to be a little bit more pricey, but that's part of where we talk about giving the risk to the insurance company, so that you know if something happened to you whether it's Alzheimer's, dementia you will be paid out and that money will keep you going, whether it's in a nursing home or to stay at home. Now, long-term care is also something that you can get and that thing you can get it, but there's a little bit of stipulation and they have amended those contracts tremendously from when I first came into this business in 2013. I think they've done a lot of amendment in 2018, 2019, because the insurance company realized that we were coming into a time where there was going to be a need for the long-term care.

Speaker 1:

The other thing about long-term care is you have to live in Canada in order to get long-term care. So let's say you were one of those what do you call those red eyes that travel back and forth, like in the wintertime you go to Florida or you go to a warm country or you go back to your home country in the wintertime and you're gone for six months. If you got diagnosed with a critical illness and you couldn't do, oh, the other thing with long-term care in order for you to pay out for long-term care, you have to be not able to do two out of six. So it means that you couldn't bat yourself, you couldn't feed yourself, you couldn't go to the bathroom, you couldn't I can't remember it's been a while and I haven't actually sold one of those critical in a while, so but it's, you have to be. You couldn't do two out of six for to qualify for long-term care, so it's a little bit more trickier than a critical illness, right? So you know, somebody could have had a heart attack and they're, they're fine and they could still be able to be functional. They could still be able to go to the bathroom after a period of time, right? But with long-term care you literally. So a dementia person would be a perfect example, to be qualified for that.

Speaker 1:

Now again, if you got diagnosed, you have to be back in Canada two months after being diagnosed in order to start receiving payment. So there's a lot of little trickiness when it comes to long-term care. So I think for me, this is why sometimes you know it has to be, you know the the my clients has to be fully present as to how it's function and what it does for them in order for them to be qualified, because a lot of I'm in a West Indian market Not all my clients are, but I have a percentage of my market that are West Indian. Majority of our West Indian people want to go back home, right? So here they are. You know they're in their late 60s and 70s and they want to travel back and forth. It wouldn't work for them and a lot of times they don't want to be in the hot, they don't want to be in the cold, they want to be in the hot in the summertime and they want to be in the hot in the wintertime. They would have to be back here two months after being diagnosed. So those are all the little things you have to think about. So the other thing that you can. So that's one way of financing your old age. So it means that when you're sitting down and you're doing your estate plan, you have to think about these things.

Speaker 1:

Now. There are people that are actually going into retirement and they're now freaking out about this point in time. If this is working for them right, you may still be able to qualify for long term career and put it as part of your exit in plan or planning for retirement. When you sit with your advisor you can contact me on that or if you have an advisor, maybe this is the time Now. If you have an advisor that says I'm your wealth or I'm your investment advisor and I don't do estate planning, I think it's time that you need to start finding another advisor, because you need somebody to take you into retirement and will work with you. So it's not about just getting your will and power of attorney.

Speaker 1:

But these are things, and these things might change as you get older, or you may have to add more stuff, or sometimes you may have to lose some. So maybe you had a million $2 million liability when you were young. When and now that you're older, the kids are gone, you don't have a mortgage, you may not need as much life insurance as you might, but not saying that you you don't want to, it just depends. So all that stuff you have to look at and that's where you sit with your financial advisor and go through those steps, right. So this is where it works well, when you speak up and you know, reach out to an advisor and reach out to an advisor.

Speaker 1:

Not everybody is going to be detailed with you, but find the right person that is suited and fit for your personality, but there is certain ways. The other thing also that you have to think about is that do you have a pension with the company that you're working for? Did you save for these golden years? When it comes to the government, what you're going to get from them, I think, based on the numbers that I've looked at, as for 2025, you're going to get maybe the minimum is. The minimum is, I think, the minimum you or the maximum, not the minimum. The minimum you will get for CPP might be 500. And then your OLED security might be 640 something, but then the government may top you up in a GIS to bring you to 1900.

Speaker 1:

Because I think the threshold for Canada and Ontario is $1,900 per individual. So again, we will have to incorporate all that to see what is best suited for you and planning for your retirement and what are your options. So these are perfect situation where, when you as I, there's no one um one size fit all. Every individual need will be different, and so these are things that, until you sit with a licensed advisor, that that you could really get into the depth of what is best suited for you. So if you need to reach me, you can contact me at info at nwnincca the number will be at the top of the link, but you can reach me and we can continue this. But again, if you like what you see and you want to hear more of this, like subscribe and even send me a note and tell me what it is that you want me to talk about, and remember money is for you.

People on this episode

Head Shot

Jacqueline Correia

Host