According to a recent Sun Life Financial Inc. survey, 40% of Canadians who have encountered a serious health issue say they are experiencing financial hardship as a result.
While the latest Sun Life Canadian Health Index report suggests many clients may be underinsured regarding their health coverage, at least one living-benefits specialist doubts the survey’s results will change advisors’ approach to the product category any time soon.
“It is clearly, in our view, the most important finding in the research,” says Kevin Press, Sun Life’s assistant vice president of market insights. “It seems clear to me that there is a wide range of financial effects and that these financial effects are happening quite often – often enough that advisors ought to be having discussions with their clients about health insurance.”
Mark Halpern, president of illnessPROTECTION.com Inc. in Markham, Ont., agrees that this issue deserves a discussion. But he doubts it will occur.
“Unfortunately, advisors are going to read this and turn the page,” says Halpern, a certified financial planner and a trust and estate practitioner. “They’re not going to do anything about it.”
In fact, Halpern is surprised that the number of financially distressed clients is not higher.
“Most people don’t prepare for these things,” he says. “Most people I meet don’t have wills; and if they do have wills, they’re not up to date. [Most people] don’t have powers of attorney in place, and they haven’t had somebody look at [their finances] from a holistic point of view.”
Halpern points to a number of factors affecting Canadians’ ability to plan for illness. Consumers are taking on more debt and they often do not have the job security their parents had. Adding to the burden, their children often are not fully independent and require financial assistance.
Canadians also are naive about the support they will receive from government and employee benefits, Halpern says. Further, employers are pulling back in their benefit plans and the large cohort of aging baby boomers will strain government programs for the elderly and the sick.
Halpern’s view is that financial advisors need to broach the topic of insurance with their clients, whether the advisors are qualified to do so themselves or need to refer their clients to specialists. “[Clients are] waiting for us to ask the questions,” he says, “because they don’t have the questions.”
Halpern does not think insurance will become a routine part of advisors’ planning conversations until advisors’ bottom lines become threatened. It will take angry phone calls from clients who are stunned to find they are not insured when they need it most.
Among the Sun Life survey’s other findings: 22% of respondents used credit cards or personal lines of credit to defray the costs incurred throughout their illnesses; 22% dipped into their personal savings; 12% borrowed from a loved one; and 5% remortgaged or sold their home.
Ipsos-Reid conducted the survey for Sun Life. The email-based survey was sent to a sample of 2,400 Canadians that reflect the adult population as determined by census data. Within that group, 28% (672 people) said they had experienced a serious health event.
The purpose of the research, Press says, is to highlight Canadians’ views on financial services and to find out where their concerns lie. The question about respondents’ financial preparedness for a major health event is an important one, he adds.
And when 40% of Canadians who have been in that situation are saying they experienced financial hardship, it is a topic worthy of discussion. IE
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