7 Financial Priorities to Consider When Dealing With a Loss of Independence

People tend to underestimate the probability that they will have to care for a loved one, or need this type of care themselves.

By Perminder Chohan of DFSIN

GET INFORMED

People tend to underestimate the probability that they will have to care for a loved one, or need this type of care themselves. Studies show that nearly four million Canadians are in such a situation. It makes them more likely to be absent from work, give up leisure activities, turn down a promotion, and spend fewer hours working.

TALK ABOUT IT

If you have aging parents, it might be wise to have an honest conversation on the subject of What if? What if they became unable to care for themselves? Could they pay for specialized care? Similarly, if you yourself became less independent, would you be able to afford the care you need so that you don’t become reliant on your loved ones?

IDENTIFY SOURCES OF INCOME

Where would you find replacement income if a loved one’s loss of independence caused you to be absent from work? Conversely, if you were to lose autonomy, what kind of income would your personal savings, private programs and public plans provide?

CONSIDER LONG-TERM CARE INSURANCE

Long-term care insurance pays a monthly benefit if the insured person becomes unable to care for him or herself. It can be of valuable assistance in providing specialized care, thus easing the financial obligations and emotional concerns on family.

CONSIDER LIFE INSURANCE WITH A LONG-TERM CARE OPTION

For several years now so-called “hybrid” insurance products have been available, combining life insurance and long-term care insurance in the same policy. This approach offers dual coverage: for the insured person, while he or she is alive, and for the survivors, after death.

PUT YOUR THINGS IN ORDER

An organized file system that contains your important documents and personal information can make things easier for your loved ones should you lose autonomy. It may also be wise at this time to prepare a will and a living will in case of incapacity. These documents would be invalid if they were prepared when you were already unable to make your own decisions.

ARTICULATE YOUR STRATEGY

  • In official documents
  • In an annual budget
  • In a long-term plan