Canadians denying the truth about disability

by Will Ashworth30 Sep 2015
A new survey from RBC Insurance finds that Canadians are woefully unprepared for coping with a disability that keeps them off work for an extended period suggesting advisors have a real opportunity to address this problem.
"Working Canadians cannot ignore the real risk that they may be off work with a disability sometime in their working careers," explains Mark Hardy, senior manager, Life and Living Benefits, RBC Insurance. "One-in-three working Canadians will experience a period of disability lasting longer than 90 days during their working lives. Workers need to talk with their family and take action today so they are prepared for future financial implications of not being able to work."
The online survey of 1,500 working Canadians found that 43% of working households have experienced a disability of some kind requiring time off work. More telling: 72% of Canadians would face serious financial difficulties if they were disabled and unable to work for three months.

But the most damning finding?
Two-thirds of Canadian workers have never discussed how they would deal with such a disability – something that would most certainly be a financial setback in their household. 
Forty-three percent of households don’t have disability coverage. Those that do usually get it through group plans which are often inadequate. LHP recently discussed this with Montreal living benefits specialist Tim Landry.
“Another huge issue is people who think they’re protected with group insurance for long-term disability. With LTD terminology and definitions on group plans after two years you’re basically going to have to be totally incapacitated in order to collect,” Landry said. “If you can do any job that pays you 50% of what you were making prior to disability you’re not going to be considered totally disabled anymore. They won’t let you.”
So, while a group plan is better than none at all, the survey’s findings provide the perfect opportunity for advisors to have “that talk” with clients.
"There is a mistaken perception that a disability 'will never happen to me,' but becoming disabled is a real possibility during our careers. Disability can occur suddenly, and beyond the serious financial implications there's also the emotional toll to consider, which further underscores the need for conversation," added Hardy.


  • by Ken MacCoy, CHS 2015-09-30 11:10:14 AM

    A person's biggest asset is their ability to go to work and should be insured first!
    WHY? Because 48% of all mortgage foreclosures are due to disability; only 3% are due to death.
    Yet less than 20% of working Canadians have long-term disability protection.

    Consider these frightening odds:
    1 in 1300 homes will catch fire each year;
    1 in 105 persons will die each year;
    1 in 70 cars will crash each year;
    But, 1 in 4 persons will be disabled each year.

    In 1990 I was have personally disabled. The problem is ... my group LTD coverage didn't kick in until after 4 months, the 120th day.
    That meant depending on Employment Insurance. I had a 2 week waiting period, then 15 weeks of short-term benefits.

    The problem: EI only pays 55% of your income, the current maximum being $524.00 (taxable) a week.
    Could you survive and pay all your bills for 4 months based on 55% of your income?!

    Speaking from experience, we are not indestructible.

    Consider individual Disability Insurance.

    Insure your most precious asset first, your ability to go to work.

  • by Brad Jardine 2015-09-30 12:55:57 PM

    Same old story told over and over again. Let's be realistic-quality Disability and Critical Illness coverage is expensive and hard to get-period. The people who tend to need it the most can seldom afford it. RBC survey was right, but yawn.... I guess the banks are new to the insurance industry and felt compelled to invest some time and money in an unnecessary survey.

  • by Ken MacCoy, CHS 2015-09-30 2:08:20 PM

    Are Disability &/or Critical Insurance premiums expensive? Compared to what?
    If comparing premiums to a new big screen TV or a night on the town; then the answer is NO.

    Injury (only) coverage is available ...for ages 18 to 64 ... for the price of a cup of coffee a day.
    Example: A $1000 non-taxable benefit for injury (only) coverage ranges from an affordable: $8.80 to $34.70 a month depending on occupation. Based on: 30 day waiting period, 3 year regular occupation, 5 year benefit.

    The reality is ... it boils down to priorities. Some coverage is better than 'none' at all.
    And ...I have dozens and dozens of disability and critical illness clients who would agree.