As a huge portion of Canadians approach retirement, financial planners should ensure these clients have a plan for health care coverage into their senior years, according to Bill Daneliak at Ontario Blue Cross.

Speaking at the Independent Financial Brokers Fall Summit in Toronto on Wednesday, Daneliak said many group benefit plans no longer provide coverage that extends into retirement, and aging Canadians must be aware of this.

“When you talk to existing clients that are covered under group programs, no longer can you write that off as part of their financial plan,” he said. “You certainly need to know, in terms of that coverage, how long it lasts.”

He encourages financial planners to find out when clients plan to retire, and whether they have health care coverage that will extend into retirement. In situations where benefits come to an end, financial planners can use various products to design flexible coverage plans for clients’ senior years, Daneliak said.

“What is the transition to a health care program when they leave their place of employment?”

He also encourages advisors to be proactive in selling benefit plans to clients of all ages, since clients seeking coverage in reaction to a sudden health care need would likely not be eligible for benefits.

“You should be dealing on a proactive basis,” he said. “Talk to people who are not covered under existing health care plans.”

Financial planners in Ontario have a considerable market in which to sell living benefits products, since more than 3 million people in the province—almost one third of residents—are not covered under any type of supplemental plan, Daneliak said.

“We’ve got a lot of prospects out there,” he said.

In addition, with a decreasing number of health care services covered by the provinces, benefit plans are becoming more advantageous to clients. The government of Ontario, for instance, has discontinued its coverage of eye exams.

Daneliak noted that sales of living benefit insurance products seem to be declining. Sales of critical illness benefits, for instance, fell 5% in 2006 and 3% in 2007. In addition, sales of long-term care policies fell 16% in 2006.

Given the looming wave of retiring workers, Daneliak said this should not be the case. He said this should be an area of greater focus for financial planners.

“Financial planers aren’t spending enough time in providing products in reference to living a long life.”

Daneliak expects demand for individual health care plans to begin rising as the economic downturn sets in. He noted that 87% of total insurance premiums are currently paid under group contracts, but said the slowing economic environment is forcing companies to cut costs, particularly in benefits.

“What’s the first cost they look at? They look at benefits,” he said.

IE