The time has come!
“Someone is sitting in the shade today because
someone planted a tree a long time ago.” – Warren Buffett
Recently, I have been having conversations with senior government officials, MPPs and Ministers regarding my concerns about Canadian seniors and the looming financial plight they face in retirement. I have found that most people in a position of responsibility are aware of the overarching problem and the statistics. But few are talking about how life settlements can help alleviate the alarming reality.
A few facts
All these facts are sourced and cited in the Case for Life Settlements document.
- In the second quarter of 2013 the increase in debt among seniors was the biggest year-over-year of all age groups
- The average poverty rate for people over age 65 in Canada was 7.2 per cent between 2007 and 2010, a [significant] increase of about two percentage points.
- It is estimated that at current funding levels, government programs for long-term care will only cover about half of the total cost. As a result, Canadians currently have an astounding long-term care funding shortfall of about $590 billion or roughly $54,000 for each baby boomer in Canada. Given the magnitude of the challenge, urgent action is required to ensure that Canadians will have access to the long-term care they will need.
- The aging of the population will accelerate over the next two decades and between 2006 and 2026, the number of Canadian seniors is projected to increase from 4.3 million to 8.0 million.
- The number of Canadians aged 85 plus will nearly double, rising from about 500,000 in 2006 to about 900,000 in 2026 (80% increase).
- It is estimated that the number of Canadians eligible for Old Age Security benefits will increase from 394,000 in 2013 to 537,000 by 2030. Many will require financial assistance in retirement.
- As of July 1, 2010, there were 1,333,800 people aged 80 years and over in Canada, representing 3.9% of the total population. The number of people aged 80 years and over could double by the year 2031. It is projected that there could be 17,600 centenarians by 2031 and 78,300 centenarians by 2061.
- Statistics Canada issued a report conducted by Employment and Social Development Canada (ESDC) that analyzed the middle class that concluded, “middle income earners saw their wages stagnate and debts mount between 1993 and 2007 and that they are unlikely to move into higher income brackets.” In a sweeping summary, the analysts concluded: “the Canadian dream is a myth more than a reality.”
There are many more statistics, but you get the point.
Now is the time
Managers do things right and leaders do the right thing. – Peter Drucker
This is not simply a time to manage things better, it is a time for true leadership. We must do the right thing. I say this sincerely and adamantly to everyone I speak with, from government leaders and advocacy groups to financial advisors and the CEOs of Canadian insurance companies. We know that whatever plans are in the works, they are not enough and that life settlements can play a valuable role in helping seniors with their financial needs. Not too mention, alleviate some of the financial burden on governments (taxpayers). To have government regulations that essentially prevent life settlements in Canada is … well, financially harmful to seniors and irresponsible governance.
The Life Insurance Settlement Association of Canada (LISAC)
We have formed the Life Insurance Settlement Association of Canada because Canada needs leadership in life settlements – now. The new not-for-profit association is taking the lead in advancing and developing a well organized and well-regulated Canadian life insurance settlement industry.
The goal for the Life Insurance Settlement Association of Canada is similar to that of LISA in the United States.
To educate consumers and advisors about a life settlement as an alternative to allowing an insurance policy to lapse or be surrendered for less than its fair market value, and to advance the highest standards of practice and professional development for the life settlement industry.