Insurance: Planning for a Longer Life

Congratulations – if you’re a senior or close to it, you’re part of a terrific good news story: You are likely to enjoy a longer and healthier life than any generation before you.

According to Statistics Canada*, life expectancy at the age of 65 continues to improve with Canadian men age 65 expected to live an average of 17+ years and Canadian women age 65 expected to live an additional 20+ years on average.

That is great news – but there is another side to your longer life: the need to extend your income over those years to ensure you continue to have a comfortable lifestyle. That could also include significant additional expenses for health care. You hope to remain healthy, of course, but statistics tell us that:

43 per cent of those over 65 will require an average of three to four years of long term care in a nursing home or long term care facility.*
66 per cent of married couples will have at least one spouse enter a long term care, personal care or health care facility at some point.**
28 per cent of Canadians age 65 and over who do not live in a health care facility are likely to receive care due to a long term health problem.***
1 in 13 Canadians over age 65 is affected by Alzheimer Disease or related dementia.****

You don’t want to outlive your retirement savings or see them eroded by unexpected health care and medical costs. So, more than ever before, an effective retirement financial plan is an absolute necessity. Here are some planning tips to set you on the right path to a long and financially comfortable retirement:

Add to your retirement income from your Registered Retirement Savings Plan with a well-chosen portfolio of non-registered investments. Look at investments that benefit from preferential tax treatment such as tax-advantaged investment structures.
Consider Universal Life insurance as a means of sheltering excess capital while maximizing the value of your estate and/or a life annuity that will provide you with guaranteed regular income for the rest of your life, no matter how long you live.
Protect your income (or your spouse’s) with carefully selected insurance coverage that could include life insurance, supplemental health insurance, disability insurance, critical illness insurance, and long-term care insurance.

Planning for retirement has never been more important. A professional advisor can help you develop a retirement plan that will work for you through all the years of your retirement.

* The Daily, Monday Sept 27, 2004 -- based on 2002 mortality rates

** The Council on Aging of Ottawa, 2002

*** Canadian Institute for Health Information, 2003

**** Alzheimer Society website, 2004

A professional advisor can help make your plan work for you. (Submitted by Damon Smith, Investors Group Financial Services Inc.) For more information call 1.888.335.1362.

This column, written and published by Investors Group Financial Services Inc. (in Quebec – a Financial Services Firm), presents general information only and is not a solicitation to buy or sell any investments. . For more information on this topic please contact your Investors Group Consultant.

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