A significant number of Canadians who hold debt would struggle to cope with the unexpected loss of their income, according to new research.
A recent survey commissioned by TD Insurance reveals that 39 per cent of Canadians surveyed have no idea how they would pay for their expenses if they had no income for six months — a figure that rose to 44 per cent for those under the age of 35.
Nearly 70 per cent of respondents reported having “some” or “a lot” of debt. A majority of those with the most debt — 60 per cent — don’t know what they would do to pay their expenses in the event of a sudden illness.
“Personal circumstances, particularly loss of income due to critical illness, are often completely unpredictable,” said Anna Kavanagh, vice president at TD Insurance.
“The last thing you want to be worried about if you have a health emergency is your finances. Obtaining the right insurance coverage, paired with saving and maintaining manageable consumer debt, will help ease the financial burden brought about by a sudden illness.”
When asked, respondents reported they would need an average of $45,609 in savings to cover all expenses over the course of a year — just below the national average pre-tax salary as reported by Statistics Canada. Those with children reported they would need an average of $53,438. Interestingly the amount of savings required varies considerably among provinces.
While statistics show that one in two men and one in three women in Canada will suffer a critical illness before age 65, an increasing number is expected to make full recoveries.
These findings are from an Ipsos Reid online poll conducted between September 18 and 22, on behalf of TD Insurance. A sample of 1,000 Canadians from Ipsos’ Canadian online panel was interviewed. The poll is accurate to within +/- 3.5 percentage points, 19 times out of 20, had all Canadian adults been polled.