There are many things in life over which we have no control.
In terms of health some may be born with disabilities or a
predisposition to certain ailments. But most people can still
make choices. Choices in terms of lifestyle that can affect
their future health and wellbeing and where this column is
concerned, their financial health.
The escalating cost of medical care
A recent study in the US determined that a 65-year old couple
would need to spend US$200,000 on healthcare during retirement.
This assumes the male will live to 80 and the female to 85.
The figure excludes over-the-counter drugs and dental services.
Agreed, medical care in the US is very expensive but the costs
are escalating everywhere. You may have medical insurance
that covers your hospitalisation now and you are not too worried
about paying for the occasional visit to the doctor or prescription
drugs. But if you are still living in Bali at 75 medical insurance
is probably no longer an option. Alternatively, paying for
medical care in full could be financially crippling unless
you have adequate means to cover costs as they arise. But
one way to delay the onset of conditions that incur these
costs is to follow a healthy lifestyle.
Good health can mean huge savings
A growing body of evidence shows that moderate exercise for
at least 30 minutes a day for most days of the week can substantially
reduce the risk of developing some of the most costly and
debilitating conditions including heart disease, cancer, diabetes,
depression, obesity, stroke and even dementia. A brisk 30-minute
walk a day could reduce your medical bills significantly over
the long term. If you can stave off dementia and live on your
own longer you can avoid the US$50,000 or more a year cost
of a nursing home. This of course relates to the cost in western
countries. If you have no money and you return to somewhere
like the UK or Australia you may be fortunate enough to get
a place in an institution. But the quality of such institutions
is likely to deteriorate with the rapid growth of ageing populations
and the inability of the majority of the elderly to support
themselves.
Insurance
This is an area where good health and lifestyle can make a
big difference to costs. Generally speaking, if you have any
pre-existing condition when you apply for medical insurance
it will not be covered, at least in the first year or two.
The same applies to life insurance. Any serious pre-existing
condition will either preclude you from cover or will result
in a higher premium or the imposition of special conditions.
If you are a smoker expect to pay up to double the premium
for life cover! I probably get more enquiries for life insurance
quotes from smokers than non-smokers. But when they see the
huge premium loading they usually do not take it up. This
is unfortunate because their families are far more likely
to need financial protection than those of non-smokers.
The four basic principles for a healthy lifestyle
To prevent or delay the onset of heart disease and many other
ailments these are the four basic principles:
1. Watch your weight.
2. Watch your diet (cut down on fats and salt, eat more fruit
and vegetables). A healthy diet is also a cheaper diet!
3. Exercise moderately at least 3 times a week.
4. Don’t smoke. If you do smoke, give it up –
you could find you will halve your life insurance costs after
12 months!
The downside of longevity
I guess the ideal target would be to live a healthy and active
life till 95 then die quietly in one’s sleep. Problem
is, it’s unlikely to be that way! But let’s assume
we achieve this ‘golden target’. What kind of
quality of life will we have if we have not made adequate
financial provision for ourselves? Most people underestimate
how much they will need to live comfortably in retirement.
It has been estimated that 80% of westerners will be impoverished
in their later years. The only way to avoid this is to make
sacrifices and save hard during the productive years. The
chances are, if you lead a healthy lifestyle you are more
likely to achieve this! Not only will you stave off medical
bills but you are more likely to be successful in work and
business. Now who’s ready to join me on the Bali Hash
on Saturday?!
Colin Bloodworth is a senior financial adviser with Financial
Partners International. The opinions expressed are his own.
If you have any questions relating to personal finance you
may contact him at 021 520 8099 or colin.bloodworth@financial-partners.biz
