February 2010

Live long, die broke

… But there are alternatives.

A study by the Canadian Institute of Actuaries1 has revealed that between 30 and 50 % of the total cost the public health care system pays out for a person is spent in the last six months of his/her life. Striking, no? And that has personal implications too.

In fact, the combination of an aging population and people living longer with chronic illnesses can be costly to both the health care system and your personal finances. Most of us hope to die of a sudden illness, a quick exit. But increasingly that’s not the case, and many of us will die over a longer period due to an extended ailment that could last months or years. That puts pressure on the health care system, and on our personal savings, too.

Costly choices
That also means that, without proper planning, that same period can quickly eat up all of a person’s life savings, dramatically limiting his/her choices in the process. Here are a few of the issues people must consider when planning for the inevitable:

  • Most people prefer to live at home as long as possible and an increasing number are choosing to die there. For those with major illnesses that may mean purchasing special equipment, hiring people to carry out household tasks, or paying for specialized medical care.
  • In an era when spouses may still have to work and children live far away, there are often fewer “volunteer” caregivers to help out.
  • Private nursing homes can provide excellent care, but can be expensive. Your condition might make staying in a specialized centre a better choice – both options can prove costly.
  • In most nursing homes or care facilities, being able to pay extra can mean the difference between living in a ward or having a private room with some creature comforts.
  • Faced with extended wait times, accessing some services privately can be faster, more effective, and greatly contribute to quality of life.

Planning for tomorrow
In all of these cases, having the funds available makes all the difference. Fortunately, careful financial planning ahead of time can eliminate much of the strain. There are a number of insurance products available, including long-term health and critical illness insurances. These realities can also be taken into account when planning your retirement savings. Of course, the advice of a trusted financial services professional can make the entire process much easier.

And one thing all of the experts agree on: having your affairs in order – including designating someone to look after your affairs if necessary and having an up-to-date will – are also key pieces in the puzzle that will help you finish out your days as comfortably as possible.

1 “Health care in Canada: the impact of population aging.” March 21, 2001.