Strong Family Connections can Increase Life Expectancy

“The greatest gift you can give your family and the world is a healthy you” – Joyce Meyer

Over a century’s worth of research underscores the link between life expectancy, physical health and strong, healthy family connections. The researchers behind a new meta-analysis conclude family support can increase survival by up to 50 percent. Moreover, exercising or losing excess weight turns out to be less important to physical health than interpersonal social networks.

The researchers analyzed results of studies going back to the early 1900s with a total of 308,849 participants. Strong family connections were found to help improve health and extend life expectancy by protecting individuals from stressful situations or establishing a standard of healthy living. A significant body of literature shows positive family relationships can mitigate a variety of physiological processes associated with risk of illness, such as high blood pressure and poor immune system functioning.

For seniors, a supportive family member can mean the difference between life and death. When including genetic factors in lifespan estimates, we find family plays a more crucial role now than ever before. Close family connections impact the likelihood of mortality directly. A recent study, presented at the Annual Meeting of the American Sociological Association, showed that seniors that said they did not feel close to family members beyond their spouses were more than twice as likely to die within the next five years compared to those that did.

Mortality Rate and Life Insurance

A number of factors are implicated in a reduced mortality rate, which life insurance providers reflect. These include marital status, the size of the network of family members, and the level of closeness people feel to family members.

The Role of Genes in Life Expectancy

Life insurance providers recognize that their clients’ family members impact their lifespan not only through social interaction, but also genetically. Genetics help determine whether or not a senior will live beyond the average life span, which is 79 years for men and 83 years for women in Canada. Healthy genes can help protect older adults from heart disease, cancer, and other common illnesses. The above-mentioned study showed a person’s genes account for over a third of what will determine their lifespan. The other factors are the environment and lifestyle.

Studies show people don’t classify family ties in terms of their quality, meaning positive and negative associations are lumped together. We can therefore conclude that the benefit of positive family connections is probably even higher than reported. Generally, the influence of family relationships on mortality is complex and contingent upon the quality of the relationship, the type of relationship, and the health status of the person. A recent study published in the Journal of Social Science & Medicine found that people suffering from chronic illnesses who characterized their relationships with family members as close, but negative and demanding, actually experienced lower mortality rates than those who did not maintain close relationships with family members. Researchers speculate that the participants in this study are being observed closely by spouses and adult children and mandated to take better care of themselves, go for regular checkups, take their medication, or other interactions which they may be qualifying as “negative” and “demanding”.

Clients of Canadian life insurance companies go through underwriting when applying for coverage, which involves assessing the insurance risk. The obvious importance of social well-being for physical health is a part of that. Assessment will likely include inquiries into family and social circles and relationship quality in the near future.

US vs. Canada Life Expectancy

Data of the World Health Organization (WHO) show the average lifespan of Canadians is up to three years longer than that of their southern neighbors. This difference is apparent in a variety of illnesses. According to experts, one of the reasons Canadians live longer is because the quality of medical care is better in Canada than in the United States. Health clinics and insurance providers in the US tend to invest more funds in marketing than in medical staff.

However, this doesn’t seem to be the only factor. Americans in the lowest income brackets reported much more health problems than Canadians and cited cost as the main reason for unmet health needs. Canadians, on the other hand, were more likely to cite waiting times.

How Does Life Insurance Help?

The right choice of a Canadian life insurance company will ensure waiting time is brought down to a minimum in moments of need. Statistics show that a large number of Americans have moved to Canada and Canadians living in the US have moved back home because they have grown tired of fighting with insurance providers over coverage issues.

Life insurance can provide income and financial security for the loved ones you name as beneficiaries, helping them cover final expenses and outstanding debts. In addition to this, it can also support a stable financial plan in your lifetime. Permanent life insurance makes it possible to increase cash value within the insurance policy, which can help you attain financial goals, such as paying for your loved ones’ education or augmenting your retirement income.

Don’t leave making a Will too late

Making a will is one of the tasks that people tend to put off most, and it’s one of the main reasons why every year millions of dollars worth of assets left by loved ones don’t end up in the right hands.

None of us like to talk about death and I can understand why, but failing to make a will can leave those left behind with significant problems and stress at what is already a tough time.

Also, having spent a lifetime working hard to accrue wealth and maybe property, surely you want to have a say in who receives what when you die?

A will can ensure that assets remain within the family and are passed on down the generations. Some people are concerned that new spouses may inherit their assets in the future, but a well-structured will can stop this happening.

More than half of Canadian adults do not have a will and could be at risk of losing control over their estate if they die.

Previous reports have estimated that about half of people who have lost a family member in the past 10 years have struggled to locate their financial assets.
The problem is, if people don’t know what savings, investments, life insurance and treasured possessions you own, they have little chance of tracking them down.

They could turn to a lawyer to help with their search, but it’s easy to run up a bill of $1000-plus for this service, and even more if it’s not a straightforward case.

Don’t leave it too late

The most common trigger for writing a will is reaching a milestone age, maybe 40, 50 or even older. Other cited reasons that spur people on to make a will are the birth of a child, the death of relative and buying a property.

Despite the fact that life events such as marriage, divorce and the death of a spouse can significantly alter the effectiveness of a will, many people have never updated their wishes, with a third of people admitting they simply haven’t got round to it.

Also consider this question. Do you have enough life insurance coverage? In many cases, there’s a major gap between the amount of life insurance coverage you need and the amount you have.

 

Providing for Children or Adults with Special Needs

Planning to meet the needs of children or adults who have special needs is often complex. Special financial planning techniques may be needed so you don’t jeopardize any government benefits they may be receiving. A further complication arises because many who have special needs require advice and protection throughout their lifetime from someone with legal authority to act on their behalf. For most persons with special needs, particularly those who are judged to be mentally challenged, two types of protections are required:

1. protection of the estate left to the individual;
2. protection of his or her person in some form of guardianship.

In practice, provisions for these two types of protection often overlap.

Why should families plan?

Some parents of a child with special needs are not able to see the necessity or benefit of estate planning for that child, although they are genuinely concerned about the long-term welfare of their child. Their child’s basic needs are presently being met by the state and in their thinking, will likely always be met by various levels of government funding. They, therefore, see no need to make provision in their will(s) for the needs of their child. For those parents who want to plan, but who have been told the child cannot have assets if government benefits are to be payable, specific planning options should be developed as a means of addressing the problem.

Will and trust provisions

The will should address such issues as guardianship of the child. Further, if funds are to be left at death, a trust can be established under the will to deal with the assets and provide for income/capital requirements for the child. If the child has a source of income, then he or she may be entitled to assistance depending on the amount of income. If the child owns marketable assets the authorities in most circumstances reject an application for assistance until such time as money realized for the assets have been depleted. In order to avoid a refusal of social assistance, the following points ought to be kept in mind:

  1. As it is unlikely that the survivor with special needs will ever be able to have the earning capacity that someone without special needs would have, they will be unable to purchase many of the same material items and afford the same travel expenses. Therefore, it is important to make provision in the will which will provide for those expenditures while not impairing the survivor’s entitlement to social assistance. As long as the testamentary gift or trust does not result in the hands of the survivor, he or she does not have an interest in the estate, and does not have an income which will affect his or her ability to receive social assistance.
  2.  It is very important to a family of limited means that what little savings they have at time of death not be depleted. It is important that their life savings be used over time to supplement what social assistance will provide to their survivor.
  3. Social assistance and other forms of government assistance only provides a minimum standard of living to recipients and occasionally will not pay for all programs which are available or in the best interests of the survivor with special needs. The vehicle available to avoid the depletion referred to above and to provide the material items, travel expenses and other amenities of life to the survivor without impairing their ability to receive social assistance is the discretionary trust.

How should the trust be worded?

A discretionary trust usually results from either:

  1. a specific fund of a specific amount being established in the will, or
  2. a portion of the residue constituting the trust. As long as the wording of the discretionary trust does not legally enable the survivor to the right to receive benefits from the trustee, the survivor does not have an asset. Drafting of the trust provision is therefore very important. In particular, the trust should be worded in such a way which will preclude the survivor from being in a position to demand or force the trustee to make payment on his or her behalf. The payments are therefore entirely at the “discretion” of the trustee.

Guardianship

In most cases, it is advisable to appoint a guardian for the adult survivor who has special needs. The guardian is an advocate of the survivor and is a person who makes decisions regarding the well-being of the survivor where the survivor is not capable of making such decisions. Again, the will can be used to make provision for the guardianship.

Life insurance

Some parents who do not have a large estate will wish to build up a fund for the child by naming him or her as a beneficiary of a life insurance policy. While insurance is a very useful method of increasing the family’s assets, it is generally not a good idea to make the child a beneficiary of the policy. If there are any serious questions as to the child’s ability to handle money, the insurance proceeds should be made payable to the parent’s estate in which event the money will be dealt with under the will of the deceased person. Alternatively, it could be paid directly into a trust established outside of the will in which case the trustee will dispose of the insurance proceeds in the manner described in the trust agreement.

The above should not be taken as providing legal, accounting or tax advice. You should obtain your own independent professional advice from your lawyer and/or accountant to take into account your particular circumstances.

Can I Buy Life Insurance on Someone Else?

Life Insurance Policy

You are allowed to pay the premiums and collect the benefits on a life insurance policy that insures a life that is not your own!

Can I buy life insurance on someone else? Or here is the one that really scares people. Can someone else buy life insurance on me and then collect the money if I die? I hear people asking these questions all the time and wanted to address both issues.

Can I buy life insurance for someone else?

The simple answer is, “yes”. You are allowed to pay the premiums and collect the benefits on a life insurance policy that insures a life that is not your own. For example, many people have life insurance on their children. Another example is that companies sometimes buy life insurance on their key employees so that they can recover from the negative financial effect that losing that employee might cause.

There are two things that you need to consider. One, you are going to need to have the consent and participation of the person whose life is being insured. Two, you are going to need to provide a reason to the insurance company that you will be affected financially if the insured dies. The only exception to this is life insurance on children. Usually the parent of a minor can purchase life insurance on the child without any additional reasons. If you have nothing to lose from the death of the person, then you don’t really have an “insurable interest” and in such cases would only gain financially from the death of the insured. Just being a relative does not necessarily create an insurable interest. You will have to prove that you are somehow financially affected by the death of that particular relative.

Can someone else buy life insurance on me and then collect the money if I die?

As you can tell from my comments in the previous paragraph it is going to be very difficult for someone to buy life insurance on you without you knowing about it. First of all they are going to need your consent and participation. Most life insurance policies require medical tests on the insured and I think you’ll notice the person coming over to your house to take your blood and to strap the EKG on your chest.

If a person purchases some kind of simplified issue or guaranteed issue policy without you knowing about it, then they are committing insurance fraud, which is a felony and would cause the policy to be voided.

Also if the person can’t prove insurable interest the insurance company is not going to let them buy the policy. The company will let anybody willing to give them the money pay the premiums, but the company is going to need to know that the person who is named the beneficiary of the policy has the insurable interest. Now if you originally purchase a policy you can usually transfer the ownership of the policy or change the beneficiary to whoever you want, but you will have to prove that the initial beneficiary has insurable interest.

Speak to a life insurance specialist at Solutions Financial to find out more on buying life insurance on someone else.