Showing posts with label disability. Show all posts
Showing posts with label disability. Show all posts

October 11, 2014

FIVE ESSENTIALS TO BETTER INVESTING (AND INSURING)

How can you lose by learning to invest better?

Steadyhand Investment Funds sells no-load low-fee mutual funds directly to investors.
They've prepared an easy-to-read report called Five Essential Elements To Being A Better Investor (PDF). The focus is on sound, timeless basics rather than trendy quick-fix tips.

You'll find interpretations at

Watch

You can also watch my chat with David Toyne, their Toronto-based Director of Business Development on Tea At Taxevity (interview #20).


An Extension

The steps to becoming a better investor also apply to becoming better insurance buyer. The following list shows the Steadyhand recommendation in bold and my interpretation for health or life insurance in italics.
  1. Be realistic: risk happens even if you’re optimistic and we have a knack for worrying about the wrong risks
  2. Have a long-term plan: prepare for your financial risks during your working years (disability), retirement years (longevity), throughout (morbidity, mortality) and at death (taxes!)
  3. Commit to a routine: if your insurance gets cancelled because you missed premium payments (e.g., cheques bounced during a long vacation), you lose your protection.
  4. Prepare for extremes: that’s precisely what insurance does by transferring unpredictable financial risks from you
  5. Act as the CEO of your portfolio: be proactive to make sure you get the service for which you're paying. Without regular checkups, you risk having the wrong amounts of insurance and perhaps the wrong types of insurance.
The Steadyhand report is well-worth reading. You might even want to invest with them.

Links

PS Invest in yourself too. Keep developing marketable skills.

January 12, 2014

DISASTER-PROOF YOUR LIFE: THE FIRST RULE FOR FINANCIAL SUCCESS FROM @PreetBanerjee


Preet Banerjee at Rotman on Jan 10, 2014“Most people don't want to learn and read about money but we must to a certain extent.” — Preet Banerjee

Preet Banerjeee quit his job the day after we first met. That’s coincidence. He was an investment advisor for a bank and I did advanced marketing for a life insurance company. We also met just before he started writing for The Globe and Mail, while he was filming Million Dollar Neighborhood, and other times too. He’s followed a squiggly career path.

The financial sector is filled with two kinds of people: salespeople (know how to sell) and technicians (understand what’s being sold). Preet stands apart. He’s very likable. Even better, he has a deep insider understanding of how the financial sector works, provides objective advice and says what needs to be said.
Stop over-thinking and get Preet Banerjee's book at Amazon.ca
Preet spoke at Rotman about his new book. I already read and recommended Stop Over-Thinking Your Money: The Five Simple Rules of Financial Success (review on GoodReads). I attended to support him. The quotes in this post are from his live talk and have been lightly edited for readability.

Rule #1: Disaster-proof Your Life

“The risk of running out of money is important and something you need to address. But if retirement is potentially 40 years away, there are a lot of risks that exist between now and then. Your future income is your single biggest asset.. Protecting it is one of the most important things you can do.

What are all the different ways you can lose that income?
  1. If you die, clearly you're not going to have any income and your family's lifestyle may be put in jeopardy
  2. If you become disabled, you're going to lose your future income
  3. If you lose your job, you're going to lose your income"
How true. 
1. Life Insurance
“Life insurance is boring if you are not in the industry. Even if you're in the industry it's pretty boring.”

I find insurance exciting, but I’m an actuary. What else provides a predictable lump sum tax-free at an unpredictable time of need? That’s peace of mind. I designed products, helped advisors sell them and use that insider knowledge to help the public review their protection.

We’ve changed. We understand the consequences of dying with financial obligations remaining but don’t always prepare. Term life insurance is inexpensive but life-changing events no longer trigger insurance purchases. For instance, the birth of a child creates expensive responsibilities. Yet 60% of parents don’t get life insurance within two years of their family addition. Does that surprise you? Maybe there are challenges affording the insurance.

If you’re single and without dependents, you might think you don’t need life insurance (but read this). Regardless, you likely agree you need insurance to replace your income if you become disabled.
2. Disability insurance
Disability insurance is complicated (see the guide to disability insurance, which includes links to an article and video by Preet). If you work for a company, you may think you have proper coverage. How do you know? Products are complex and life insurance literacy remains low.

How do you do you gauge
  • the stinginess of the definitions
  • the generosity of the benefits
  • the quality of the guarantees
At work, you’re stuck with group coverage, one of the two types of insurance you can’t own. That puts you at risk because your employer has full control and likely wants to reduce expenses.

Your benefits aren’t guaranteed even if you pay part of the cost. Remember Nortel? The long-term disability insurance covered 50% of pre-disability income. Would that be enough? Many employees didn’t think so and topped up coverage to 70%. Unfortunately, Nortel went bankrupt leaving the 357 disabled with only 35% of their expected benefits. Could you live on that? How would you feel knowing that lawyers and other professionals have already received over $1 billion in windup fees?

If the Nortel employees got independent advice, they might have purchased personal disability insurance that Assuris guarantees will pay at least 85% of the promised benefits if a member insurer goes bankrupt.

If you’re self-employed, don’t you need disability insurance too?
3. Job Loss Insurance
You can’t buy job loss insurance. That doesn’t stop you from taking precautions to bulletproof your career, following the eight steps to getting a job today or taking a Krypton course.

You can self-insure against job loss by establishing an emergency fund once you decide on the right size. Yet 45% of Canadians have no savings for emergencies. How’s that for optimism?

Act

Knowing isn’t doing.

Disaster-proofing your life isn't glamorous. The process takes time. Preet tells readers to get started by contacting suitable advisors immediately: “Put down the book and book the appointment. You do not know when these [unpredictable] things could happen. Do it. Get the ball rolling.

An author telling us to stop reading? At least Preet didn’t tell us to leave his talk. That’s advice we would have ignored. What advice will you act on?

Links

PS Stop reading this post and get Preet’s book. It’s an easy read.

November 26, 2011

INCOME REPLACEMENT: A GUIDE TO DISABILITY INSURANCE

disabled unfinished creation
In this week’s Globe and Mail, Preet Banerjee investigates the financial aid available to the disabled. I’m quoted. The interview took place via Bluetooth while I was driving to the sold-out Toastmasters conference. (There, Jonathan Holowka and I showed ways to turbocharge clubs with social media.)

Disability is a dreary subject and you avoid buying insurance, but the topic is popular this week. Advisor.ca, has articles to help salespeople clear the sales hurdle and pitch disability coverage. There is even a script for them to use on you. If you start getting contacted in the near future, maybe that’s why.

This post gives you more insider thoughts about disability insurance, which is sometimes given the glitzier name of income replacement insurance.

Statistics

There are many eye-popping statistics about the high risk of disability and how long income can be lost. You can watch a no-longer-embeddable video from PPI Solutions.

You probably know people who are disabled at least partially.

Differences

Death is something an actuary can calculate fairly easily and accurately. Predicting who will become disabled is not so easy. It is a calculation based on chance.
New York Times, April 2011
Life insurance pays a fixed amount upon death. Critical illness insurance pays a fixed amount upon diagnosis of a covered illness. Within reason, you decide how much coverage you want.

Disability insurance is different. It only replaces a portion of your lost income. If you were able to replace your full income and get indexed benefits, where is the financial incentive to return to work? If the economy is bad and layoffs are pending, getting disabled may look like an exit strategy.

To counter abuse, insurers have ongoing checks to make sure you still qualify. With life and critical illness insurance, you're only checked at the time of the claim.

Disability has subjective elements. Insurers have leeway in deciding who qualifies for benefits. There are three key ways to getting your claim paid.

Nortel

You can't rely on disability protection from your employer even if you pay the premiums. We already looked at the two types of coverage you may have but can't own.

Nortel is a sad example. Instead of getting real insurance, the company decided to insure employees themselves. Since Nortel is bankrupt, their promises mean nothing. The disabled lost their benefits. If real insurance were used, then benefits would have continued. If the insurer failed, Assuris protection would step in.

In British Columbia, the government is not paying legislated benefits to thousands of disabled people.

If you can't rely on an employer or government, can you rely on yourself? If you don't have your own DI coverage, you are your own insurer. Since you cannot tell if you're going to become disabled or for how long, self-insuring can prove very costly unless you're independently wealthy.

Problem

Statistics Canada reports that 1 in 7 Canadians are disabled. The rates increase with age. Not only is disability common during your working years, the benefits could be paid until age 65 and might even be indexed. While the protection is worthwhile, it's pricey. It has to be. That’s why some people buy critical illness insurance instead. That's valuable coverage but hardly a substitute.

The perceived problem is that you can spend lots of hard-earned money on insurance and never get a long term disability. Isn't that better than having a claim? You had peace of mind and your health.

Links

Disability
Salespeople
Nortel

Podcast 145 (hmm)


direct download | Internet Archive page | iTunes

PS Relying on your employer for your pension is also risky. Defined benefit plans are becoming rare in the private sector and we're living longer than ever.

August 24, 2008

When Doctors Disagree: Toe To Toe

The mistakes made by doctors are innumerable. They err habitually on the side of optimism as to treatment, of pessimism as to the outcome. --- Marcel Proust

As a kid, I thought of doctors as gods, practitioners of a noble profession. Experience shows these experts in health care have limits. Like everyone else. I just had a strange experience. A molehill got misdiagnosed and became a mountain.

Pain Without Gain
The pain in my left foot started months ago. Like Snake Plissken in Escape from New York, I paid no attention. Until I had difficulty walking. A growth on the side of an inner toe caused pain and swelling. To compensate, I burdened my other toes and other foot with extra weight and unnatural movements. That caused side effects.

Time for medical treatment.

Doctor 1
I went to a neighborhood walk-in clinic, waited and eventually saw a doctor. He diagnosed a callus. He cut away the top layers of dead skin ("tell me when it starts to hurt") and advised me to return if the pain remained.

A few days later, I went to IKI Canada, the centre for pain-free living. I go every 4-6 weeks for a general tune-up. My therapist, Julian Hirabayashi used Ki energy, acupuncture and other techniques to remove the swelling and rebalance my body weight.

Doctor 2
I wasn't cured, though. I returned to the walk-in clinic where a different doctor was on duty. She confirmed the growth was a callus. She poked from the top and sides ("does it hurt here?") but provided no treatment. My condition seemed too minor for her. I was to get a pumice stone.

Something was wrong. The pumice stone caused more pain. Progress was slow. I tried a special file. This worked faster but caused bleeding since too large an area got treated. I waited for the foot to heal before continuing treatment.

Doctor 3 (Specialist 1)
Because of other issues, I was getting orthotic shoes. When I went for foot impressions, the doctor looked at my aching foot and confirmed the earlier diagnoses.

Doctor 4
To reduce the pain, I'd been limiting my walking and wearing looser footwear. I wasn't getting better, though.

I went to a different doctor. He said I had a wart!?! This made more sense. He cut away at the top and applied cold to start killing the virus. He advised that I go to a specialist to get treatment with uber-icy liquid nitrogen.

I got an appointment about three weeks later.

Doctor 5 (Specialist 2)
The health centre could treat me but would not: I lived outside their zone. Something to do with how the province funds them. I should been screened out when I called for the appointment. Three weeks wasted. Plus an hour waiting and filling out forms.

As a courtesy, the doctor examined my foot and gave me a list of private foot care facilities. I got an appointment the next day.

Doctor 6 (Specialist 3)
After filling out paperwork that even asked for ages of children, my foot got examined. The recommended treatment? Surgery. No one mentioned this option before. It seemed ideal based on the location and advanced stage of growth. I paid $300 and got treated right away. That was a few days ago. I return for a checkup in a couple of days. Months of agony and misdiagnosis are ending.

Three Lessons Learned
I'm no doctor. I'm barely a good patient. Still, I'm dismayed that a minor ailment got misdiagnosed three times. If there were doubts, why not refer me to a specialist. I learned three lessons.
  1. good advisors are hard to find
  2. a bad diagnosis means a bad prescription
  3. you suffer when mistakes get made (time, money, inconvenience, pain)
Health = wealth.
Stay healthy.

May 31, 2008

Flying Without A Full Tank

Four police officers boarded the plane upon landing in Toronto and peacefully removed two passengers without drawing their weapons. Thus ended my previous flight to Calgary.

The Next Flight
What a beautiful morning, bright and sunny. I'm in an airplane heading to Calgary again. The doors have been shut. We have our seatbelts fastened firmly and our trays locked in the upright position. No one is sitting beside me --- about 10% of the seats are empty.

So why are waiting for more fuel?

Glad But Puzzled
Would you rather
A. leave on time but without enough fuel?
B. get enough fuel but leave late?

You'd probably pick B because you aren't given the option C:
C. leave on time with enough fuel

We had no choice and got option D:
D. leave late but with enough fuel

Maybe we didn't top up because fuel is cheaper in Calgary? That shouldn't matter because the flight had a fuel surcharge of about $200 for a round trip.

The plane didn't move for a smidgen for an extra 28 minutes. I figured we'd fly faster to make up for lost time, which would use up more fuel . Wrong! We landed 37 minutes late. Pity the passengers waiting to board in Calgary for the continuation to Vancouver.

Why More Fuel?
Why didn't the plane have enough fuel in the first place? It did until last minute passengers boarded. Once the pilot found out, he ordered more fuel. If you fly over the Grand Canyon in a small plane, you get seated based on weight. That's a tad scary. Luckily, a Boeing 737 isn't as finicky.

How Much Fuel Is Enough?
I talked to the airline afterwards. The plane needed enough fuel to reach the destination and an alternate, plus a margin of 1,000 pounds. The plane refuels at each stop. The tank is not filled up because of the weight of the fuel.

Passengers lose. When a flight is full, we are crowded and wait longer for boarding, a washroom, in-flight service and deplaning. I didn't realize that a comfortably-full plane could be delayed too, thanks to a handful of last minute passengers.

Our flight plan got updated too. Otherwise, we could have ended up in Colorado, a passenger quipped. Unlikely, I thought --- we'd need more fuel.

April 27, 2008

A Week In A Handicapped Hotel Suite

I'm in Ottawa all week staying in a suite hotel. For whatever reason, I got a suite for the handicapped. Ironically, staying longer restricted the choice of rooms available. I feel uncomfortable for two reasons
  • a disabled person loses access to the room
  • intruding into the inner world of a disabled person
Public Space or Private Place?
In Blink, Malcolm Gladwell notes that we can learn more about someone by spending minutes alone in their private space than from months observing their public face, stay at dinners and parties. That observation still doesn't motivate me to tidy up my office :)

The front desk assured me that the room was "normal" except modified for a wheelchair. From the hall, there's no sign that this room is different --- a nice touch.

Here's what I noticed:
  • wider hallways and more open space
  • lower counters
  • lower bed
  • bath tub with support bars
  • higher toilet seat
  • lower thermostat and light switches
  • lower clothes bar in closet
  • nothing in the kitchen's upper cupboards
To my surprise, the hot water tap spews lukewarm liquid. Protection against scalding? Actually, no. It just took time for the water to heat up and reach my room. This may be environmentally friendly, but it wastes minutes of water flow. Maybe there aren't many guests drawing water at the time. Regardless, the room itself cannot be a factor.

The Shower
The shower head is at a lower height and in the middle of the long wall. Picture a microphone on a stand. That's the height. To wash from the top of my head to my upper shoulders, I need to bend down or kneel. Each of the three walls has a support bar, which seems like a good idea for any bathroom. There are no support bars elsewhere in the suite.

Just Right
The room looks right for someone seated in a wheelchair. It great that the hotel has such facilities. I just hope that a handicapped person won't be turned away because of my intrusion.

March 5, 2008

The Six Financial Fears of Canadians

Sister says, "we're next in line"
The man he says, "that's okay."
And the Government says you're gonna pay, pay, pay
And you pay, still you pay.
--- Simple Minds, Soul Crying Out

What are your financial fears? Here are findings from a 2004 study of Canadians by LIMRA, a research organization established in 1916.
  1. Government's ability to fund health care (88% worried)
  2. Government's ability to continue pension plans (82%)
  3. Cost and availability of Long-Term Care (77%)
  4. Having enough income if critically ill (72%)
  5. Having enough money if disabled (69%)
  6. Having enough money for retirement (69%)
Sadly, there's plenty of overlap with the six basic fears that Napoleon Hill identified before most of us were born:
  • poverty (was #1): all 6 but mainly from long-term care (#3), critical illness (#4), disability (#5) and retirement (#6)
  • ill health (was #3): public health care (#1), long-term care (#3), critical illness (#4), disability (#5)
  • old age (was #5): government pension plans (#2), long-term care (#3), retirement income (#6)
Even more sad are the downward trends. Concern about long-term care worsened by 9% (from 68% to 77%) in just three years. And our population continues to age.

There are tools to help. Insufficient government funding (#1-#2) can be addressed with your vote and personal savings. Insurance is available for long-term care, critical illness and disability. For many, affordability remains a problem due to stagnant family incomes.

Links and Sources

February 24, 2008

The Final Basic Fears #3-6 (Napoleon Hill)

We've been looking at the six basic fears that Napoleon Hill identified 70 years ago.

1. Poverty
2. Criticism
3. Ill Health
4. Loss of Love
5. Old Age
6. Death

We focused on poverty and criticism already. This time we'll delve into the rest. Some of the symptoms may seem dated.

#3 Fear of Ill Health
Fear of disease can produce physical symptoms of the disease feared.

Auto-Suggestion
  • negative self-talk
  • “enjoying” imaginary diseases, treating them as real
  • favouring “quack” treatments over professional help
Hypochondria (imaginary disease)
  • concentrating the mind upon disease
  • negative thinking --> expecting disease to appear
Exercise
Susceptibility
  • body’s resistance breaks down --> easier to contract a disease
  • can lead to too much time preparing for sickness
Self-Coddling
  • using an imaginary illness to seek sympathy (and get out of work)
  • hides laziness and lack of ambition
Intemperance
  • use of alcohol and other drugs to destroy pains, rather than eliminating the causes
#4 Fear of Loss of Love
This may be the most painful fear. At least it seems that way if you listen to popular music.

Jealousy
  • suspicion of friends and loved ones without reasonable evidence
  • suspicion of everyone --> no absolute faith in anyone
Fault Finding
  • with friends, relatives, colleagues, and loved ones
  • without any cause
Gambling
  • thinking love can be bought
  • gambling, stealing, cheating, over-spending
  • leads to insomnia, nervousness, lack of persistence, lack of self-control, lack of self-reliance, bad temper
#5 Fear of Old Age
Old age can take away freedom and independence (physical and economic).

Slowing Down
  • feeling the best years are past

Apologizing for Being Old
  • rather than expressing gratitude for being alive
Narrow Thinking
  • no longer taking initiative, using imagination or maintaining self-reliance
Mimicking
  • dressing and acting like much younger people --> ridiculed by friends and strangers
#6 Fear of Death
This fear can be the cruelest fear for some. Is there life after life? The question of what happens after death can be troubling.

Thinking About Dying
  • instead of making the most of life
Lacking Purpose
  • too much time to worry when not busy
Burden on Loved Ones
  • could leave loved ones in poverty due to death or illness prior to death
Links

February 10, 2008

The Six Basic Fears From 70 Years Ago (Napoleon Hill)

[Update: It's now 2012, which means the fears are from 75 years ago. Here's a new video summary:
 

Now back to the original post]

In his classic 1937 book Think and Grow Rich, Napoleon Hill identified the six basic fears:

1. Poverty
2. Criticism
3. Ill Health
4. Loss of Love
5. Old Age
6. Death

Are we really that different 70 years later?

We're living longer, healthier and with more money. That doesn't mean the fears are gone. Let's look at the primary fear.

#1: Fear of Poverty

"(Warren) Buffett had planned to hold onto his money until his death, but he changed his mind after his wife, Susie, died in 2004." --- Fortune, Jan 2008
The fear of poverty is widespread. Even for those with lots. Warren Buffett didn't want to donate the bulk of his wealth until his death. In contrast, Bill and Melinda Gates plan to give away 95% during their lifetimes, which is causing their children to fear there won't be enough left for them.

Here are the symptons that Hill identified

Indifference
  • lack of ambition
  • tolerance for poverty
  • mental and physical laziness
  • lack of initiative, imagination, enthusiasm, self-control
Indecision
  • letting others do the thinking
  • sitting on the fence
Doubt
  • excuses to cover up, explain or apologize for own failures
  • envy or criticism of the successful
Worry
  • finding fault with others
  • spending beyond earnings
  • neglect of personal appearance
  • frowning; nervousness; lack of poise
  • self-consciousness
  • excess use of alcohol or other drugs
Over-caution
  • seeking out negatives
  • knowing all roads to disaster but none to avoid failure
  • pessimism leads to indigestion, bad breath and a bad disposition
Procrastination
  • putting off until tomorrow what should have been done last year
  • working on excuses rather than finishing the work
  • refusing to accept responsibility
  • compromising
Links
(You can download Think And Grow Rich for free. However, many sites use the book as a lure to sell you something. I couldn't find a link to recommend.)

October 8, 2007

Fitness Club Options

I would not join any club that would have someone like me for a member. --- Groucho Marx
Please accept my resignation. I don't care to belong to any club that will have me as a member. --- Groucho Marx
Health is wealth. My dad passed this message along --- fittingly --- during childhood walks. But do you really want to exercise outside in the rain, on a frigid day or in the scorching sun? Maybe you'd like to use exercise equipment too. A fitness club can help.
Better to hunt in fields for health unbought than fee the doctor for a nauseous draught. The wise for cure on exercise depend. --- John Dryden
The Cost
A reader of my earlier post Fitness Clubs Exercise Your Wallet suggested a cheaper way to join a fitness club: a corporate membership. You or your spouse may qualify. You may even have a facility where you work, but family members may not be allowed.

If you're the type to join a club and stop going, pick the cheapest place :)
Rule of thumb: Eat for what you're going to be doing, and not for what you have done. Don't take in more than you're willing to burn off. --- Lee Haney, former Mr. Olympia
Links
(Here are links I found while researching nearby clubs we were thinking of joining.)