Recently, new research told us something we probably already knew: serious health events can significantly affect our finances. But what we may not have realized is how deeply these events are changing our lives—especially financially.

The 2013 Sun Life Canadian Health Index™ measures the attitudes of Canadians toward healthy lifestyles. Two results in particular illustrate the impact of health on finances:

  • Canadians who have had a serious health event or diagnosis are feeling the pinch, with 40 per cent reporting financial hardship as a result.
  • More than half (53 per cent) of 45 to 54 year olds are struggling to make ends meet after a major health incident.

“It’s the fourth year in a row that we’ve taken the pulse of Canadians regarding their health,” Kevin Press, Assistant Vice-President, Market Insights, Sun Life Financial, says. “This year, we’ve noticed a trend pointing to increased stress in Canadians, and often that stress directly relates to finances.”

Seventy-seven per cent of Canadians report they’re experiencing excessive levels of stress, a five percentage point increase over 2012. Finances are the most likely cause of excessive stress across all age brackets.

What are the chances?

Understandably, most of your clients won’t want to think about becoming seriously ill or how it’ll affect their retirement portfolio. But many of them will know someone—a relative, colleague, friend, or friend-of-a-friend—who had a heart attack, is battling cancer, or has suffered a stroke. These critical illnesses occur more often than your clients might think.

The risk of illness is real. An estimated two out of five Canadians are expected to develop cancer during their lifetimes, and most will survive. Sixty-nine per cent of new cancer cases occur among those 50 to 79 years of age.1 Nine in 10 Canadians have at least one risk factor for heart disease or stroke.2

It’s encouraging that Canadians are surviving critical illnesses, and their chances of recovery are very good. The challenge comes with recovery costs. Out-of-pocket medical expenses or alternative treatments can run into the tens or even hundreds of thousands of dollars.

If clients have to cash in investments or stop investing for a while to manage their recoveries, their portfolios may never recover, especially if they’re in the 50- to 65-year-old age group.

How can you help?

Most Canadians know that a major or chronic health condition would affect their finances.3 Among Canadians with a financial plan, however, only 27% say theirs includes health insurance.4

“It’s important for advisors to talk to their clients about taking action to protect their assets from unplanned health-care costs,” says David A. Gray, Vice-President, Wholesale Distribution, Sun Life Financial.

1 Canadian Cancer Society, 2012.
2 Public Health Agency of Canada, “Tracking Heart Disease and Stroke in Canada,” 2009.
3 Nine out of 10 Canadians know this, according to results from the Sun Life Canadian Health Index™, 2011.
4 Sun Life Canadian Health Index™, 2013.