the principal causes of financial...

The Principal Causes of Financial CrisisDisability, Critical Illness and Long-term Care

When it comes to avoiding a financial crisis, people are like ostriches

Consider these recent statistics on DI in North America

� Nearly 90% of disabilities aren’t work-related

and therefore don’t qualify for workers’ compensation benefits

� Over 5 million eligible Ontario residents are not covered under any type of disability plan

Source: CDA – 2010 Consumer Disability Awareness Study

North Americans not protecting their income against disability or critical illness

Source: 2009 Data by Northwestern Mutual. All rights reserved.

Chances of disability or critical illness

Statistics show that of 1000 males or females, at age 40:

� Approximately 350 males and 380 females will be

disabled 90 days or longer before reaching 65

� Average length of Disability which lasts over 90 days is 2.9 years. Bankruptcy WILL result in most cases

Source: 1985 Disability Table

Common disability claims

1. Mental or emotional disabilities

2. Back or spine

3. Arthritis and rheumatoid

4. Heart trouble

5. Lung or respiratory

6. Diabetes

7. Deafness or hearing problems

8. Conditions related to limbs and extremities

9. Blindness or vision problems

10. Stroke

Source: CDC – US Centre for Disease Control and Prevention

Why brokers don’t sell DI & CI

� Product knowledge and complexity

� Underwriting problems – medical and financial

� Price (too expensive)

� Too many exclusions and declines

� Too much time to get issued (average is 3 months)

� Claims (too many denied claims)

� Slow claims payment “When do I get my claim cheque?”

� Too many CI declines due to family history

All of the above are misconceptions!

Chances of disability or critical illness between the ages of 30 and 65

� 1 out of 3 chance of disability

� 1 out of 3 chance of critical illness

� 1 out of 2 chance after age 65 of a long-term care claim

The above is based on 1 out of 1000 males or females in these age groups.

Why Critical Illness Insurance?

Source: Empire Life Claims (2012)


Source: Munich Re, 2011


Source: Sun Life Financial (2012)


Male, age 30, non-smoker

You should plan to replace one year’s income to:

� Relieve financial stress

� Focus on healing

� Afford appropriate treatment

Why the need for Long-term care insurance in Canada?Daunting statistics in Canada that will make you think…

� More than 10,000 residents in Canada are abused annually by other home residents (W5 “Nursing Home Residents at Risk)

� 20,000 people are waiting for nursing home placement in Ontario today and the waiting period is approximately 155 days

� 24-hour care by a PSW in Toronto costs $4366/month

Source: Community Care Access Centre Ontario (CCAC)

Why the need for Long-term care insurance in Canada?Daunting statistics in Canada that will make you think…

� Approximately 37.5% of all nursing home residents in Ontario are under 64 years of age. (CCAC)

� 22% of all LTC will last 10 years or more (CCAC)

� 43% of all family caregivers still have children living at home (Family Caregiver Coalition, 2012)

� Demand for LTC beds has increased by 85% from 2005-2012

Source: Community Care Access Centre Ontario (CCAC)

CLHIA report on long-term careJune 2012

Why the need for long-term care?

� Shorter hospital stays

� More outpatient treatment

� Aging population

� Longer life expectancy

� Over the next 35 years, cost in current dollars of providing LTC is almost 1.2 trillion

� Unfunded liability for LTC is $590 billion

Source: CLHIA June 2012



� In 2009 the waiting period in Ontario for urgent LTC beds was 103 days and 618 days for non-urgent cases

� According to Canadian Research Network for Care in the Community, informal care givers (usually family or friends) provide assistance care for freeand make-up 80% of the care givers and their economic value is $25 billion




� Family and friends acting as caregivers results in a huge need for Respite Services (relief from care giving) which is not-funded by the government


LTC costs and shortfall


Current LTC Purchasers

� In 2010, 385,000 Canadians owned LTC benefits

� LTC benefits paid out have been $12 million dollars

� LTC market is tremendously underdeveloped

Source: 2012 CLHIA June Report

Long-term care facility rates in Ontario

* Rates Effective July 1, 2012 and do NOT include extra services associated with LTC

Source: www.health.gov.on.ca

Additional services as of July 2012

Source: www.health.gov.on.ca

Impact of informal care giving

� 50% experienced significant increase in stress levels

� 24% incurred significant out-of-pocket expenses

� 18% had to move or make changes in accommodation

� 15% had to decrease their number of paid work hours

Source: RBC Retirement Myths & Realities Poll

Annual review of insurance

Date: August 19, 2010

I, (we) have just completed a review of our Life Insurance, Disability, Critical Illness, and Long Term Care needs. After careful consideration and discussion with I, (we) have made the following decisions:1. Life Insurance recommendations:2. Disability Insurance recommendations:3. Critical Illness recommendations:4. Long Term Care recommendations:

I (we) have reviewed the above insurance needs and recommendations and have chosen to take:

NO ACTION in the following areas:

Write in areas of insurance and your recommended action!Sincerely,

Client Full Name ( )Witness Full Name ( )

Letter of authorization

To Claims Adjudicator at Disability Life; My Family Physician; My Accountant

In the event of my disability, either as a result of Accident or Sickness, I authorize myInsurance Broker to assist in the adjudication process.

This authorization includes openly discussing and releasing any pertinent information to(him or her) about my claim. This authorization includes providing (him or her) medical, financial records pertinent to the adjunction of my claim. Any appropriate costs for such information will be paid by me or my Power of Attorney if my Disability InsuranceCompany for Policy #123456 will not pay such costs.

Appreciating my rights under the Freedom of Privacy Act, I instruct any person who canhelp expedite the adjunction of my claim, including my Employer, to release pertinent information to my Insurance Broker.

Sincerely,

Client _____________ (Full Name)Witness _____________ (Full Name)

Letter to underwriterRe: App. #123456 On The Life of: John A. Smith

To Whom It May Concern,

The Following are some additional facts and clarifications about my career (job) and Health Background.

1) Height & Weight, Diet2) Exercise Routine, Hobbies3) Illnesses, Medications4) Accidents5) Detailed Job or Occupation (Duties or Tasks), at time of Application6) How much foreign travel have you done or plan on doing in future7) Travel to countries at risk, as deemed by the Department of Foreign Affairs

I have answered and reviewed all questions on the Part (1) and Part (2) of the application to you company. I also have a complete copy of the Illustration Attached to my Application.

Sincerely,

Client ________ (Full Name)Witness ________ (Full Name)

Client discussion

Not the same as a typical Life or CI discussion:

� Health background/family history

� Occupational risks – duties

� Hobbies/recreation/lifestyle

� Income disclosure

A unique product that transitions automatically into Long-Term Care coverage with no medical evidence.

Disability and critical illness feature summary

� Unique product to the industry

� Only transitional LTC product in the industry

� Unique Assistance Program

� The best alternative product to the non-cancellable, guaranteed renewable products

Key to understanding Tangible

Securing, Protecting and Preserving Your Wealth with ONE Product!

What do we mean?

DI & CI that transitions to LTC Not conversion, but guaranteed transition

� Available to 4A-B classes for disability

� Optional homecare benefit

� Optional yearly increase of LTC benefit from time of issue

� Can transition into a facility care/home care benefit as early as age 56

� No medical U/W when transition occurs

� Automatic transition to LTC - no conversion papers to be completed

� Enhanced Assistance Program

Alternative options for a professional

� Remove the ROP from the Own OCC DI policy

� Reduce benefits from $10,000 per month to $7,000 per month on the Own OCC policy

� Purchase $3,000 per month of Blue Cross Hybrid DI

� Purchase $80,000 of Blue Cross Hybrid CI

� At age 65 you will have a paid up home care or facility care policy for $9,848 per month for life!

� With Blue Cross, you can claim for the DI and/or CI and still have your LTC benefit at age 65*

*For the DI policy, you can not be cognitively disabled at age 65 and for the CI, you must continue to pay the premiums after receiving the CI benefit. For the Blue Cross DI and CI Hybrid, the premiums can be changed in the future.

Sample quotations for MD, professional or entrepreneur who qualify for Own OCC

What do we mean? Traditional solution – benefits that transition into LTC

Male, graduating doctor, non smoker, age 30

DI: 4A class, 120 WP, T65 benefit, regular OCC & partial

CI: T100, 26 illnesses, paid up at age 65

LTC: Facility & Home Care (lifetime), paid up at age 65

In summary

Traditional Solution $702.98

Blue Cross Tangible Solution $178.98

TOTAL MONTHLY SAVINGS $524.00

“That is the Tangible solution!”


Should you have a CI claim after you return to

work, continue to pay your CI premiums and have

a paid up LTC policy (home care or facility

care) as follows:

Current LTC sales

� Most LTC sales are made between the ages of 50-65

Assistance Program for Tangible policyholders

Enhanced Assistance Program

� Medical Second Opinion as compared to Best Doctors

� Referrals and case management

� Psychological support

� Residential assistance services

Medical Second Opinion

Getting the best care that you need, when you need it the most…

� Medical records submitted to the best Canadian and International experts

� Clarification of the diagnosis and treatment plan proposed by you doctor or specialist

� You WILL receive the best treatment plan for your medical condition!

Cranky Old Man

When an old man died in the geriatric ward of a nursinghome in an Australian country town, it was believed that he had nothing left of any value.

Later, when the nurses were going through his meagre possessions, they found this poem. Its quality and content so impressed the staff that copies were made and distributed to every nurse in the hospital.

One nurse took her copy to Mel bourne. The old man’s sole bequest to posterity has since appeared in the Christmas editions of magazines around the country and appearing in mags for Mental Health. A slide presentation has also been made based on his simple,

but eloquent, poem.

Cranky Old Man

And this old man, with nothing left to give to the world, is now the author of this 'anonymous' poem winging acrossthe Internet.

What do you see nurses?....What do you see?What are you thinking…when you’re looking at me?A cranky old man,…not very wise,Uncertain of habit…with faraway eyes?Who dribbles his food…and makes no reply.When you say in a loud voice…’I do wish you’d try!’Who seems not to notice…the things that you do.And forever is losing….A sock or shoe?

Cranky Old Man

Who, resisting or not…lets you do as you will,With bathing and feeding…the long day to fill?Is that what you’re thinking?...Is that what you see?Then open your eyes, nurse…you’re not looking at me.

I’ll tell you who I am…As I sit here so still, as I do at yourbidding…as I eat at your will.I’m a small child of ten…with a father and mother,Brothers and sisters…who love one another.

A young boy of sixteen…with wings on his feeDreaming that soon now…a lover he’ll meet.

Cranky Old Man

A groom soon at twenty…my heart gives a leap.Remembering, the vows…that I promised to keep.

At twenty-five, now…I have young of my own.Who need me to guide…and secure happy home.A man of thirty…my young now grown fast,Bound to each other…with ties that should last.

At forty, my young sons…have grown and are gone,But my woman is beside me…to see I don’t mourn.At fifty, once more,…babies play round my knee, Again, we know children…my loved one and me.

Cranky Old Man

Dark days are upon me…my wife is now dead.I look at the future…I shudder with dread.For my young are all rearing…young of their own.And I think of the years…and the love that I’ve known.

I’m now an old man…and nature is cruel.It’s jest to make old age…look like a fool.The body, it crumbles…grace and vigour, depart.There is now a stone…where I once had a heart.

But inside this old carcass. A young man still dwells,And now and again…my battered heart swellsI remember the joys…I remember the pain.And I’m loving and living…life over again.

Cranky Old Man

I think of the years, all too few…gone too fast.And accept the stark fact…that nothing can last.So open your eyes, people…open and see.Not a cranky old man…Look closer….see…ME!!

Remember this poem when you next meet an olderperson who you might brush aside without looking at theyoung soul within….We will all, one day, be there, too!

Thank you!

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