A survey commissioned by RBC insurance revealed that four in ten working households in Canada have had someone take time off due to disability and one in three Canadians will experience a period of disability of over 90 days at least once during their working lives.
“Being off work with a disability can take a heavy toll on individuals and families. Not only are you coping with your disability and trying to get better, but the financial and emotional stress affects everyone in the family,” said Mark Hardy, director of Living Benefits, RBC Insurance. “Canadians want to work and live healthy, productive lives … [so] Canadians need to take steps to ensure they’re prepared and protected.”
The financial strain of a disability can be quite significant – 29% of respondents had to reach into their savings to pay for recovery and expenses, 17% incurred more debt, another 17% loaned money from family and friends, and 9% withdrew from their RRSPs. The situation is even worse for those without any insurance, where 60% of those surveyed reported that they were in ‘rough shape’ and ‘financially terrible’ while off work.
Hardy also said that many people are shocked to find out that their employee benefit plans may be not enough. He advised Canadians to have a solid picture of their financial situations and disability coverage to be able to take steps to prevent dealing with a large drop in income while recovering.
Here are some tips for workers who need to take time off due to a disability.
- Investigate the coverage you have through your employer plan. Understand how the plan defines a disability and what is and isn’t covered. Ask about employee assistance programs
- Be proactive and formulate a ‘return to work plan’ with your employer and family.
- Ask your medical professionals about services or programs that may be available to ensure you’re getting all the care you need to recover
- Explore any of your ‘Return to Work Benefits’ such as financial planning, job search and retraining, rehabilitation and other services to help make a smooth transition back into the workplace
The Edmonton-based brokerage that recently introduced layoff insurance to ensure those out of work are still able to make mortgage payments, told Insurance Business Canada that “demand has been brisk” for its product.
Gordon McCallum, president of First Foundation Insurance, would not disclose detailed numbers but said, “Unfortunately there has been lots of demand from the public which is an indication of the state of our economy at the moment.”
Indeed, it’s an unfortunate sign of the times. Slumping oil prices have taken a toll on the Canadian economy, leading many resource-sector operators to scale back operations and cut staff. But this broker in Alberta is looking to help those hit by the faltering economy, while moving into a new product sector.
And others have taken an interest too. “We've had numerous inquiries from other mortgage and insurance brokerages as well about offering it,” McCallum said.
Almost half of Canadians are not financially prepared to miss work due to disability, and almost 80% say finances are tight when off work for a period.