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.