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Mind the gap – are your clients covered?

Insurance needs for the next phase of life.

The baby boomer generation has always had a sizable impact on society, and this demographic is now changing how we look at what it means to grow older. The youngest of the boomers are now in their 50s, and the oldest in their late 60s. In the past, this would have meant winding things down for retirement, but the idea of entering the slow lane of life is proving ripe for disruption.

Today’s boomers are once again pushing against tradition and forging a new approach to the golden years. For the most part, this age group is healthier than in previous generations, living longer and choosing to stay in the workforce longer – which creates a unique opportunity for advisors to help ensure these clients have the right protection in place to fit their evolving lifestyle.

In a 2017 Employee Financial Wellness Survey by Price Waterhouse Coopers, two major concerns cited by boomer-age participants involved their health and their financial security. Thirty-six per cent were concerned about running out of money with an expected longer life span, and 33 per cent said they worried about declining health as they grow older.1

Karen Cutler, Manulife’s Chief Underwriter, says that while these two issues are important, the boomer generation is proving to be very proactive, especially in adopting technology. “A lot of people, including baby boomers, are more invested in being their own health coach and taking advantage of the technology to help them with their health,” she says. “There is a lot of technology available to help individuals manage chronic conditions, such as apps for diabetes and weight control, and wearables to encourage activity.”

Manulife Vitality program®

While getting older does come with an increased risk for developing heart disease, diabetes and cancer, technology is helping Canadians to have greater control over their health.

“I think the availability of information about health issues and chronic conditions has been tremendously helpful in guiding people how to manage their own illnesses,” says Cutler. “The internet provides people with credible sources and information is broken down into digestible terminology. As long as people have the time to research and understand what they are dealing with, they can manage their illnesses better.”

Increasingly popular initiatives such as the Manulife Vitality program can provide that active motivation to help clients stay on track with their health goals, through rewards for healthy lifestyle choices. “It’s fascinating to consider the impact that the boomer generation may have on the overall Canadian health care system,” says Cutler.

Go for a stroll

“By just getting up and moving 30 minutes a day, you can make a significant positive change in your mortality,” Cutler notes. A 2017 study published in the American Journal of Preventive Medicine looked at the effects of moderate exercise on longevity. The study found that simply walking 30 minutes daily provides substantial benefits: the risk for heart disease, cancer, diabetes and osteoporosis drops, cognitive function improves and depression decreases.2

“We can all do a lot to prevent ourselves from becoming a frequent user of the health care system,” says Cutler. “That is where the prevention method works in our favour.”

Prevention is a matter of moderate exercise, a healthy diet and not smoking or drinking alcohol excessively. The Manulife Vitality program can help motivate your clients to stay on track with their health goals. The program is currently available on all Family TermTM coverage options.

Coverage for the long run

Canadians are living longer than ever before, with the average life expectancy now 81 years.3 While we all want to live as long as possible, this can add to concerns about whether investments will stretch that far, and what might happen if health begins to decline or a more serious health crisis develops.

Florence Marino is the head of Manulife’s Individual Insurance Tax, Retirement and & Estate Planning Services. “Older individuals really need to get to the point of knowing they have enough, and that’s where advisors come in,” says Marino. “Part of their role and function is to show clients they are in good shape. They have been working with them all these years, handling their investments, protecting their wealth, and they have been providing sound financial advice so they will be well cared for and can potentially leave behind a legacy for their children and grandchildren.”

Along with adequate investments, client needs may include revisiting coverage for critical care, long-term care and private health benefits for dental, chiropractic, physiotherapy and other services. An important aspect is educating clients so they can make the right choice for their particular circumstances. 

Image: one in twenty six baby boomers is expected to live to 100

Life insurance benefits

As clients age, the role of life insurance may change somewhat – along with providing for family after a loved one is gone, there are tax-saving benefits that clients should be made aware of.

“Life insurance has very beneficial tax consequences,” says Marino. “The death benefit is tax-free, and clients can also save within a life insurance policy tax-free. A client can reposition assets that are subject to tax during their lifetime into life insurance, ultimately maximizing their estate.” 

Tax savings within an estate can also be maximized through donating a life insurance death benefit as a charitable gift, or using a death benefit to cover tax liabilities rather than liquidating other assets. 

Investments and insurance needs continue to grow as clients age. The trusted guidance of an advisor can help greatly as seniors navigate what can often feel like a confusing and overwhelming process. 

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