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Stress testing your finances

How protected are you for the unexpected?

Posted by Medavie Blue Cross on May 18, 2021

The pandemic has been a wake-up call for Canadians on the need for extra health insurance, new research from Medavie Blue Cross found.

Maybe that includes you. Has the pandemic caused you to rethink your finances? From building emergency savings to rethinking retirement plans, many Canadians have taken action to protect their financial wellbeing. But would your current insurance coverage pass a stress test?

Our survey showed that working Canadians are anxious about the potential impact a major illness or injury could have on their financial wellbeing:

  • 80% anticipate such an event would impact their finances, and 45% say the impact would be significant.
  • Top financial worries include losing income due to absence from work (48%), lack of government coverage for treatment (38%) and an inability to pay mortgage or rent (37%).
  • In the event of a losing income due to a major illness or injury, respondents say they’d cope financially by cutting back expenses (57%), dipping into savings (48%) or seeking another source of income (34%). Another 57% would only be able to manage for 6 months or less before going into debt.

Insurance gap

The survey reveals a gap between the income protection working Canadians should have and the life and health insurance they already have in place:

  • Although two-thirds of respondents say the pandemic has made it more important than ever to own life or critical illness insurance, only 40% have critical illness coverage and 55% have accidental death & dismemberment insurance. Life insurance is more common at 70%.

As we continue living through the pandemic, now is a good time to consider what would happen to your financial health if you, a partner or spouse lost income caused by major illness or injury. Here are some questions to think about:

  • If your ability to earn income was reduced, how would you need to adjust your finances?
  • · How much do you have set aside for emergencies?

Myth busters

Here are some of the top misconceptions about life and critical illness insurance:

  1. It’s too expensive. If you are a member of an employer-sponsored plan and insured through Medavie Blue Cross, you can purchase Optional Benefits at preferred group rates lower than you could access on your own.
  2. It won’t happen to me. A serious illness or injury can strike anyone at any time. About 3-in-10 Canadians are living with diabetes or prediabetes, 9-in-10 Canadians have at least one risk factor for heart disease and stroke and 1-in-2 Canadians will experience cancer in their lifetime.
  3. The health care system will pay. In Canada, government health programs typically cover most medical costs. However, a critical illness or sudden injury can result in extra costs such as adaptive equipment, home modifications, travel and accommodations for treatment, childcare expenses, etc. That’s not to mention potentially losing income while they are away from work to recover from an illness, an injury, or to care for a loved one.
  4. It’s too complex. Our Optional Benefits digital platform seamlessly guides you through the entire application process, from login to purchase. You can select your coverage, calculate your rates and arrange for payment — all online.
  5. You have to do a medical exam. As a group plan member, you can purchase Optional Benefits during an open enrolment period — no medical questions are asked and no exams are required, up to certain coverage amounts.
  6. It takes too long to set up. Optional Benefits offers quick, easy sign-up. You can access added financial protection within minutes through our simple and secure process.

Secure your future

Once you have extra coverage, you can rest easy knowing you’re financially prepared for whatever tomorrow may bring. Should the unexpected occur, you will receive a lump sum, tax-free cash payment ― to spend as you choose ― so you can focus on your recovery and not your finances. It’s a smart, easy and affordable way to secure your finances and help protect your future.

Want more information?

Speak to your human resources representative to see if your plan includes these flexible coverage options or learn more below.

*Data is from a Medavie Blue Cross-commissioned Leger survey of 1,004 Canadians who are employed full time and have opted into their employer health benefits plan. It was completed between March 8-16, 2021, using Leger’s online panel.