The department I work for is called Wealth Management. My meetings with clients go beyond market updates, portfolio reviews, and a re-assessment of their return and risk objectives, it also extends to risk planning and estate planning. Hence, it is not uncommon to educate clients on the different types of insurance that they or their loved ones could consider. We view insurance as a very important wealth management tool that clients can use to protect and grow their wealth.

Depending on client circumstances, the types of insurance we have recommended could include life insurance, critical illness, disability, and long-term care. Not all insurance vehicles may be necessary and the best way to diagnose the need for insurance is to perform a financial plan that illustrates which risks need to be addressed.

Some clients may be facing risks related to longevity risk (outliving one’s financial assets); Others may worry about losing a key source of income due to injury or sickness. In these cases, critical illness, disability insurance, and long-term care insurance may be tools that can help fund medical or other expenses. We refer to these insurance tools as “living benefits” as it is meant to pay out benefits during one’s lifetime. Paying for medical expenses and healthcare out of one’s own pocket could become a financial burden that some clients have decided to protect themselves against. With that said, it was recently announced that insurance companies in Canada have stopped issuing new long-term care policies. That means, clients cannot buy a new long-term care insurance policy anymore, and the only way to get it is via old critical illness or disability insurance policies that have conversion options.

There are also insurance vehicles that can provide benefits during and after one’s lifetime. Common risks and concerns that may warrant exploring a permanent life insurance solution are:

- Is the client facing a potentially large estate tax at death?

- Is the client declaring excessive taxable income from investments

- Is the client’s wealth not diversified amongst a variety of asset categories?

Under these sets of risks, a permanent life insurance policy may be appropriate as it carries the benefits of tax-free growth, tax-free distribution to beneficiaries, and a variety of liquidity options while one is alive in case they want to access the cash in the policy. This has been such a popular tax and wealth-building tool for Canadians that we have seen parents or grandparents help fund their children’s and/or grandchildren’s policies while the cost of insurance is notably lower.

Lifespan VS Health Span

Although the Global lifespan has more than doubled over the past 100 years,  our “healthspan” has not improved by much. Unfortunately, many people are living longer but spending most of those later years with chronic illnesses like heart disease, diabetes, and cancer. This might have been the reason why life insurance companies are not able to afford to offer long-term care insurance policies.

Hence, I think it’s becoming increasingly important that we take an active approach to caring for our health. I have come across two books that I found very interesting and I would like to share them with my readers here. “Why We Get Sick” by Ben Bikman, PhD, and “The Cancer Code” by Dr. Jason Fung. Below are some interesting points mentioned in the books related to the topic of insulin resistance:

1. High insulin (a.k.a. insulin resistance) contributes to many chronic diseases, such as diabetes, heart diseases, dementia, and cancer

2. Over 80% of American adults may have insulin resistance.  

3. Metaphorically, seeds need healthy soil to flourish. However, research on chronic conditions have focused mainly on gene mutations and not the surrounding personal and environmental conditions

4. Many lifestyle factors increase the risk of insulin resistance e.g. smoking, air pollution, and our diet (especially sugar, including fructose and hidden sugars in refined high carbs)

5. Being sedentary, sleep-deprived, and eating too frequently also increases insulin resistance

It’s important that we help our clients to protect and manage their wealth, but it’s even more important that we all take control and manage our own health. Getting the right insurance policy can offer protection and peace of mind; however, taking note of our health and being proactive still plays an important role to achieve a healthy lifespan. After all, despite being covered by car insurance, we still need to drive carefully!