Tag Archives: seniors

MoneySense Feature on Rising Fraud: How Seniors and everyone else can minimize odds of being scammed

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MoneySense.ca has just published a feature article by me that looks at the rising tide of frauds directed at Canada’s seniors, and everyone else.

You can find the full piece by clicking on the highlighted headline here: Canadian Seniors, watch out for these scams.

This Saturday (June 15th) is World Elder Abuse Awareness Day.

Note that while the full 2500-word article at MoneySense is aimed at Seniors, it is not technically my  monthly Retired Money column, which is typically shorter.  And this short summary here at Findependence Hub is only a third as long: hopefully enough to entice readers to hop over to MoneySense for the full article.

So below, I offer only a small fraction of the full column and some of the major links. This is an important topic both for seniors and those who hope to be financially independent seniors one day, so do take the time to click on and read the full article at MoneySense.ca, linked above.

It was a bit of an eye opener researching and writing  this piece but it appears to be the unfortunate reality of the technological world we all now inhabit.  It’s overwhelming and the situation is unlikely to improve any time soon.

In the past MoneySense has covered such topics as getting scammed through e-transfers, phishing, crypto schemes, identity theft and more. There’s financial fraud in general that targets bank accounts, credit cards and potentially every other aspect of your financial life. My feature attempts an overview of most of them from a Canadian perspective, with a few new scams I hadn’t known about before researching this article. (Example: “smishing,” which is sort of phishing in the form of text messages on smartphones.)

A.I. is exacerbating the spread of Frauds on all platforms

As I note at the top of the full column, it’s a sad fact that the rise of Artificial Intelligence (A.I.) has exacerbated this problem. While anyone can be prey for technology-linked schemes to separate you from your money, seniors need to pay particular attention, seeing as they tend to have more money to lose and less time to recoup it.

According to Equifax, Fraud is the top crime perpetrated against older Canadians. Sadly, many seniors fail to report these crimes to the police because they feel shame or embarrassment about being duped by scamsters.

Identity Theft

 Identity theft is particularly worrisome for seniors, if not the rest of us. As Equifax puts it, “a scammer may try to get information such as a bank card or personal identity number, credit card number, health card number, or a driver’s license or Social Insurance number. They can then apply for credit cards, take out loans or withdraw funds in the person’s name.”

5 cyber scams targeting seniors

Elder Abuse Prevention Ontario (EAPO) lists 5 cyber scams that target seniors. These include Romance scams targeting the recently bereaved. Here are 5 red flags to watch for if you’re looking for love online. Continue Reading…

4 ways Life Insurance can fund Retirement

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Image by unsplash: James Hose jr

By Lucas Siegel

Special to the Financial Independence Hub

The infamous retirement crisis that’s been talked about for years just became real, with inflation and interest rates reaching record highs in the past few months. Consumer prices skyrocketed by 9.1% as of June 2022, the largest increase we’ve seen in 40 years. Couple that with a growing senior population living off a fixed income, many of which retired early during the pandemic, and you have yourself a massive problem.

Most senior Americans are unaware that their life insurance policy could be one of their most valuable liquid assets. Contrary to popular belief, life insurance isn’t just a way to care for loved ones after you die through the death benefit. In fact, permanent life insurance policies can also be used to access funds for retirement planning and healthcare when you need it most. Life settlements are legal throughout the US and regulated in all except six states, as well as the provinces of Quebec and Saskatchewan in Canada.

Regardless of age or financial standing, understanding the true value of your assets is essential to living out the retirement you deserve. Check out the following four ways you can use your life insurance policy to help fund retirement:

1.)   Sell your life insurance policy through a life settlement

For millions of Americans who own a life insurance policy, selling it through a life settlement can be a great way to access cash when it’s most needed. A life settlement involves selling a life insurance policy for lump-sum cash payment that is more than the cash surrender value, but less than the death benefit. Despite decades of industry innovation and growth, some 200 billion dollars[US$] in life insurance is lapsed each year that could have been sold as a life settlement.

While the life settlement process once took two to four months, AI technology has expedited the process, making it easier than ever the get a life settlement valuation. Policyholders can now use a free life settlement calculator to instantly see how much their policy is worth based on a few simple questions. Just as you track the value of your house on Zillow or your car on Autotrader, understanding the value of your life insurance policy is critical to make the best financial decisions for you and your family.

2.)   Obtain the cash value from a permanent policy

When you pay your premium on a permanent life policy, only a portion goes toward covering the cost of your life insurance. The remainder of these payments goes into an investment account where cash value can grow on a tax-deferred basis. As you age, you’ll also eventually be able to tap into the interest earnings from this investment account to help keep your policy active, thus bringing down your out of pocket premium payments. Essentially, the money in this account can be treated as emergency savings with tax advantages.

3.)   Borrow from your policy through a loan

Americans with whole life insurance that have accrued enough cash value to cover the debt can also use their policy as collateral through a whole life loan program. One major benefit is the interest rate will be much lower than what you’d see with credit card debt or an unsecured personal loan. This allows the policyholder to get a one-time, tax-free distribution that can be paid off with interest in life, or be withdrawn from your life insurance policy’s death benefit. Retirees might be able to go through their insurance carrier if whole life loans are offered, or utilize a third-party whole life loan program instead. Continue Reading…

Are life settlements key to solving America’s retirement crisis?

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By Lucas Siegel

Special to the Financial Independence Hub

As the retirement crisis continues, the need for workable options for funding retirement becomes even more vital. Today’s senior Americans are at risk of not having enough for necessary living expenses.

Over the years, misconceptions have developed about life settlements and their viability. The truth is, under the right circumstances, taking advantage of a life settlement and selling a life insurance policy to a third-party investor can help seniors unlock much-needed cash.

In the case of life settlements, we are talking about seniors having access to a significant amount of money. For instance, if eligible Americans took full advantage of life settlements, it could help cover more than US$42 billion in long-term care and retirement costs each year.

So, what is a life settlement?

A life settlement enables a qualifying life insurance policyholder to obtain a lump sum cash payment in exchange for selling their policy to a third party. The buyer takes on all responsibilities for the policy, including paying the premiums. The resulting money from the life settlement allows retirees to pay for necessary living and healthcare expenses, rather than struggle to make life insurance policy payments.

How to qualify for a life settlement

Many seniors are surprised to find how straightforward it is to qualify for a life settlement. They discover it isn’t necessary to have failing health or a terminal illness to receive a life settlement. The main requirements for a life settlement are being at least 70 years old and owning a life insurance policy valued at US$50,000 or more.

There is also no requirement in terms of how the money from a life settlement is spent. The money can be used for whatever the recipient wishes. Many seniors find the funds enable them to afford the rising costs of retirement. For instance, after receiving a life settlement, they may choose to pay down debt to decrease fixed expenses, pay for long-term care, pay for general living expenses, create an emergency fund, invest the money, or even spend the money on home renovations or a vacation.

Best states for life settlements

If you’re interested in learning more, you may be excited to find that you live in a state that is highly accommodating to life settlements. Our U.S. Life Settlement Index: The Best and Worst States for Life Settlements took a close look at seven attributes that affect life settlements in each state.

These attributes included existing state regulations for life settlements, the median monthly cost of long-term care, the face amount of life insurance per capita, and whether the state requires that policyholders receive life settlement disclosures. Additional considerations included the median household income, size of the population of those 75 and older, and average life expectancy.

Considering the various data, the U.S. Life Settlement Index identified the most and least accommodating states for life settlements. The top spots for most amenable went to California, which came in first, followed by Washington, New Jersey, and Illinois. Wisconsin and Massachusetts tied for fifth on the Index. Continue Reading…

Banking from home and Canada’s seniors: RBC sees surge in digital & online banking by older clients

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By Rick Lowes,

Vice-President, Retirement Strategy, RBC

(Sponsor content)

As the pandemic took hold in early 2020, many Canadian seniors quickly learned how to bank safely and securely from home. Now that winter is setting in, many seniors who’ve continued to use their branch through the pandemic are likely exploring these options. We’re looking forward to helping more seniors across Canada discover the simplicity of not having to go outside their home to do their banking, while resting assured their bills will be paid correctly and on time.

We’ve already heard from many of our senior clients about how pleased they are to have made the transition to online or mobile banking. An elderly client in Prince George, British Columbia who thought he could only transfer funds out of his eSavings account in person is now very happily doing online banking from home.

A senior in Burlington, Ontario – who wanted to know how he was supposed to pay his bills while the branch across the street was temporarily closed – is now paying all his bills online. And an older client in St. John’s, Newfoundland – who had fears about using a computer – couldn’t believe how easy and secure it was to do online banking, when one of our advisors walked her through the process over the phone. From coast to coast to coast, seniors like these have been engaging with our online platforms, spurred on by the realities of ongoing physical distancing.

To share some statistics of our own around what this new activity looks like, over this past year we’ve seen seniors aged 60+ increase their use of electronic money transfers by 101% and digital payments by 46%. Among seniors aged 70+ who are newer to online banking, mobile banking has quickly become their favoured channel for banking from home.

Seniors have been receiving one-on-one support from our advisors that is helping to make them more comfortable with online banking. As a result, we’ve seen that comfort level translate into empowerment and the ability to make decisions about their finances while banking from the comfort of their homes.

 Responding to Canada’s new Seniors Code

We’ve also responded quickly to ensure we had comprehensive support in place for seniors and for our employees who work with seniors, aligned with the new Code of Conduct for the Delivery of Banking Services to Seniors (“Seniors Code”). This Seniors Code guides banks in their delivery of banking products and services to Canada’s seniors. Continue Reading…

8 ways to protect Seniors from Financial Fraud

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By Mikayla St. Clair

Special to the Financial Independence Hub

There are tons of financial scams aimed at taking advantage of senior citizens. One of the key reasons the elderly are targeted for scams is that many of them grew up when deals were made and based on a person’s word and character. A handshake, many years ago, was enough to trust someone. Many elderly and senior citizens grew up in an era when people were more trustworthy, and scams like financial fraud were not as prevalent as today. There are other reasons why the elderly are targets for financial fraud, and understanding how thieves go about stealing from senior citizens will go a long way in prevention. Here are eight ways to protect seniors from financial fraud.

1.) Shred sensitive documents

A good shredder can go a long way in preventing financial fraud, but it only works if you use it. Many people fail to shred sensitive documents and simply throw them in the trash. Thieves aren’t above going through your trash in hopes of gaining your social security number and other information they can use to open fraudulent accounts or gain access to accounts already open. Shredding the personal documents of seniors helps to prevent others from gaining access to their sensitive information and creating fraudulent accounts in the senior’s name.

2.) Check Credit reports regularly

It’s essential to check the credit reports of older adults under your care. Credit reports should be reviewed twice a year or annually at a minimum. Look for any errors, suspicious charges, or accounts that you don’t recognize. Correct these errors immediately and close any unauthorized accounts. Using a professional credit monitoring service to monitor a senior loved one’s credit is also an excellent way to protect the elderly from financial fraud.

3.) Be cautious of new relationships, friends, and family

Seniors can be more trusting than younger people, especially if they are lonely. Many thieves and fraudsters use loneliness as an entry-point into senior’s life to gain access to financial information or trick them into giving them money. It’s also important to be cautious of friends and family members who may have an addiction or severe financial problems. Sadly, many cases of financial fraud against the elderly are committed by a family member or friend.

4.) Use a Power of Attorney if necessary

In some instances, it may be necessary to take full control of a senior’s finances through a financial power of attorney. A financial power of attorney may be necessary when a person has a mental condition such as dementia or Alzheimer’s. Seniors with these disabilities are often targets because of their health.

A financial power of attorney can give you full control of a person’s finances. If the senior is a family member, discuss the matter with others in the family to determine the best choice for managing the person’s financing.

5.) Watch for changes in Spending

Keep an eye on the spending habits of any older adult in your care. Continue Reading…