02/23/2018 14:14 EST | Updated 02/27/2018 14:09 EST

Prepare Now For These 3 Emergencies You'll Probably Face

Unfortunately, we will all experience a parent who becomes ill and/or passes away, and over the next decade will see many people step into caregiver roles.

Just recently, I had two very different situations come up within my social circle. On the positive side, a good friend of mine was lucky enough to inherit money from the family business, but has no clue what to do with it. On the other hand, last November, my friend in San Francisco passed away unexpectedly of meningitis at 56, with no insurance, leaving behind a husband who doesn't currently have a job.

Life, and death, happens. It struck me that what tied these two experiences together was the lack — and importance — of preparation. This got me thinking about several life events that will be trending over the next several years as baby boomers age, but that impact each of us, and why it's critical that we're ready.

Aging parents

Unfortunately, we will all experience a parent who becomes ill and/or passes away, and over the next decade or so will see many people step into caregiver roles. According to the 2016 census from Statistics Canada, there were over 770,000 people aged 85 and older living in Canada, and between 2016 and 2026, there's a projected influx of baby boomers who are reaching the ages of 65 to 74.

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In 2012, eight million Canadians, or 28 per cent of the population aged 15 and over, provided care to family members or friends with a long-term health condition, a disability or problems associated with aging.

Both of my parents passed away by the time I was 45. The emotional, mental and financial toll can be significant for family caregivers, between hospital visits and transportation costs, and moving in to the same house to manage their care. It's a stressful situation, especially if you have kids at home. And if your parents don't have enough money to take care of themselves, you'll have to provide financial support as well.

My mother became ill when she was 36. I was fortunate she had enough money to cover most of her illness, but it got tense toward the end as she nearly ran out of savings. She didn't have disability insurance, but luckily, she had purchased a life insurance policy that helped cover the cost of her burial. Even so, my sister and I had to make financial contributions.

With demand on healthcare services on the rise for an aging population who are also living longer, the increased costs of caregiving will continue to be a growing concern for Canadians.

Mental health claims

Awareness campaigns around mental health are on the rise, and with good reason. According to the Centre for Addiction and Mental Health (CAMH), one in five Canadians experience a mental health issue in any given year, making it a leading cause of disability. In fact, almost one-third of group disability claims at RBC Insurance are related to mental health, and that number is higher if you count physical disabilities that lead to mental health concerns. For example, our claims data shows that a cancer diagnosis can often result in debilitating anxiety as well.

Unfortunately, it's unlikely these figures will get better any time soon. The social and economic landscape has changed considerably: we are busier, carrying more debt, working harder and racing to keep up with increased demands and technological advancements, all while supporting kids or aging family members. The gig economy is increasingly replacing steady, full-time jobs, forcing many to knit together an income from several freelance or contract jobs without any group benefits. There's a lot more anxiety, depression and stress than even five years ago.

Removing the stigma around mental health is important, but increasing access to innovative services and topping up individual benefit coverage is key

Mental health is often overlooked, despite research that shows how important it is to our wellbeing, and that of the economy. I'd like to see more people covered by individual insurance for mental health even if they have a pre-existing condition.

Many people suffer from anxiety or depression but, with treatment, are still able to be productive, something insurance companies look at. It's not cheap, but it's the right thing to do. If people are getting back to work earlier because of better treatment options, there's a cost benefit to be realized by the business. Removing the stigma around mental health is important, but increasing access to innovative services and topping up individual benefit coverage is key to a healthier and more productive workforce.

Wealth transfers

There's a lot of money that's about to passed on in Canada over the next decade, but many Canadians aren't adequately prepared to receive this inheritance, and don't necessarily know what to do with it to make it last. It's well documented that among high net worth families 90 per cent lose their wealth by the third generation. But among average folks, studies show that one in three Americans burn through their inheritance within two years because of financial mismanagement.

Whatever the amount of money or assets you receive, you should have a comprehensive plan in place. This includes proper education and communication around wealth — for yourselves and your own heirs in the future. With life expectancy being higher than ever before, many Canadians will need to ensure they have enough money to fund their retirement years so they can live the type of full lifestyle they want.

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There are several strategies to ensure enough income for yourself, while also maximizing what you'll be able to pass on. For example, you can supplement your existing savings with insurance products like annuities or segregated funds that provide guaranteed income for life, as well as estate planning and tax benefits. Your financial advisor can help guide you and determine which strategies are right for you and your family.

Some people may think it's morbid or boring to think about death, poor health or finances, especially at an early age. But preparation pays off, and your future self will thank you when, not if, life happens to you.

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