Gordon Powers

People reach different life stages at different ages. One thing is sure though: As your priorities shift at every stage, you need to change with them.

This has implications not only on personal finances and retirement savings, but on insurance needs, according to a recent report by TD Bank Group.

"People are living longer, supporting adult children and aging parents, and are more active later in life than previous generations — and that means they need more money to sustain their quality of life," says Dave Minor, vice-president, TD Insurance.

Thanks to medical advancements, more people are surviving critical illnesses and living longer, for instance.

The potential downside is that most Canadians feel that surviving a major illness could render them financially vulnerable, according to the 2011 Desjardins Financial Security Health Survey.

While intimidating, the reality is that what was once considered a terminal illness is now often survivable. As a result, Canadians are definitely living longer, with the average life expectancy now hovering around 78 for men and 83 for women.

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This steady rise in longevity means that critical illness insurance is becoming more important in protecting a family's ability to earn income and save for the future, especially during prime income earning years.

Instead of paying if you die, this kind of insurance policy pays so that you can live — offering protection should you fall victim to a serious medical condition, such as cancer, stroke, Alzheimer's, or Parkinson's disease.

Another lifestyle change that impacts insurance needs is the fact that many families are choosing to have children later in life. According to Statistics Canada, the number of women giving birth in their 40s has more than doubled in recent decades.

Most women are aware of the physical risks of waiting to have children, from infertility issues to birth complications, but they generally don't consider some of the financial implications.

"Many young and healthy Canadians put off buying life insurance until they start planning for a family," says Minor. "But the reality is, even if you're postponing having children until later in life, sooner rather than later is the best time to purchase a policy."

The earlier you buy a life insurance policy, the more attractive your premiums will be since they're largely based on your age. Getting set up early also reduces the risk of being declined for coverage due to future health issues, he adds.

It's no secret that young Canadians are now maturing in an economy with fewer job prospects and affordable housing options. In fact, more and more of them are financially reliant on their families until at least their late 20s, creating stress for parents who thought an upcoming retirement was their main economic worry.

According to a recent Pew Research Center report, three in 10 young adults between the ages of 25 and 34 have moved back home in recent years.

This migration can translate into higher-than-expected household expenses, including additional life insurance coverage to mitigate any disruption in household income and even an increase in home insurance coverage that may be needed for the extra valuables in the home.

"What's most concerning is the amount of expenses that this group of Canadians is being forced to take on at a time when they should be saving for retirement," said Laurie Campbell, executive director at Credit Canada.

According to a recent Credit Canada study, many Canadians in this sandwich generation admit to being torn between continuing to help their adult kids and financially supporting their own elderly parents.

As a result, they may cut back on what they perceive as "discretionary" expenses, including insurance premiums, without working through the long-term financial implications.

While average debt-loads in Canada increased at twice the pace of income over the past decade, the debt loads of those 65 years and older grew at three times the rate and contributed as much as half to the overall debt growth.

This indebtedness represents another unexpected milestone for families, says Minor, pointing out that "life insurance is frequently used to cover debts and protect the estate assets in case of death, sometimes even paid for by the beneficiaries to help manage the cash flow of the insured."

In some cases, for instance, the adult children purchase the policy, sharing the cost of the premiums among them.

In the same way, if parents have been providing financial help to one specific child, the proceeds from an insurance policy can be distributed to other siblings, recognizing the existing financial support as a "pre-payment" of any inheritance.