Money for Life** consists of 5 must-have, needs-based conversations at each life stage to help clients plan to achieve their financial goals. In part 2 of this 5-part series, we’ll look at essential elements to encourage clients to take care of their health needs.
Regardless of our age, when we’re healthy, we don’t like to think about our health worsening or the possibility of experiencing a significant health event. And if we don’t like to think about it, we really don’t like to talk about it.
How many times have you heard the following assumptions?:
- “I’m healthy now, and I’ll stay healthy.”
- “The government will help me if I get sick.”
- “My family will take care of me.”
- “My money will last, even if I have to pay for health care.”
They’re not only common, but they can also seriously undermine clients’ financial plans.
The truth is, clients’ current health conditions can worsen and new ones can emerge over time. As advisors, starting this often difficult conversation with clients in any life stage can help them plan for health needs and risks, and feel confident they can keep their financial plans on track. Health needs include money for medical expenses (not covered by provincial plans). Or, as clients age, they may also need money for emerging personal care costs, like in-home nursing and support services.
How are canadians facing health-care costs?
Canadians have a misplaced perception that the Canada Health Act and provincial health care is universal and covers all medical and health-care needs. While provinces offer important health coverage for hospital care, doctors’ visits and drug benefits for seniors, a survey shows gaps between respondents’ coverage and how they’ll pay — and that can cause stress:
- 78% of Canadians haven’t saved any money or otherwise planned for a health event.
- 76% of Canadians experienced at least one source of excessive stress, with survey respondents citing unexpected expenses (30%) and personal health issues (25%) in the top 6 stress generators.
Planned and/or unplanned health expenses can contribute to 4 of the top 6 sources of stress for Canadians.1 And many Canadians don’t own health insurance and have less health coverage than you might think — if they have any.
- 38% don’t have group health insurance coverage.2
- 4 out of 5 (81%) don’t have money saved specifically for health expenses.2
- Only 12% own critical illness insurance policies.3
- Only 10% own long-term insurance policies.3
Previous generations expected that employers not only offer group benefits throughout their working years, but into retirement as well.
Today’s employment landscape is much different, with many Canadians beginning their careers with contract or part-time work. These positions generally don’t offer group benefits. In addition, most employers are no longer offering health benefits that continue into retirement for their full-time employees.
Asking the right questions leads to the best answers
A serious health condition can occur in any stage of clients’ lives and may last a few weeks, months, years or the remainder of their lives.
Asking clients what would be important if they or a loved one suffered from a serious health condition can help them understand how such an event can affect their lives. To help you start the question, ask clients the following:
If you were diagnosed with an illness, would you like to:
- focus on managing the illness instead of mortgage payments and other financial concerns?
- have additional funds to help pay for medical care and treatment that you want?
- stay in your home as long as possible, and be able to afford the best assisted living?
- take time off work to help with care?
- keep your children’s lives as normal as possible?
Discussing health needs and providing solutions for clients can strengthen their financial situations and reduce stress by:
- getting coverage when they’re insurable,
- continuing to save and preserve assets, and
- reducing the risk of postponing retirement or outliving their retirement income.
Healthy solutions for every stage of life
You can present solutions to soften the financial impact of an unexpected health event, help clients focus on recovering without the worry of financial obligations, and create a protection plan. Here are several options to consider for each life stage:
|Building for the future||Getting ready for retirement||In retirement|
|In this life stage, health insurance can help clients protects their debt and income against a serious health event or illness. A health event at this stage could prevent clients from meeting their short-term goals, and make their long-term goals more challenging to achieve. Planning for family health and wellness expenses with personal health insurance can help if the client doesn’t have access to group benefits from an employer.||Suffering from a serious health condition at this stage could have a significant impact on clients’ assets and how they’ll fund their retirement, so it’s key to have a conversation about critical illness insurance. Also, clients should start thinking about the kind of care they’ll want in retirement and plan for future costs of care.||Work with clients to build a plan that considers their health-related expenses throughout retirement. Understanding how health needs will change over time, discuss long term care insurance and protecting their assets, so that they can enjoy the retirement they’ve been planning for.|
Your attention to clients’ health needs will demonstrate the value of your advice and ultimately deepen relationships with clients and their families.
Get continuing education (CE) credits – take the health needs course
Available on Sun Life Financial’s Education Hub, take the Money for Life – Health needs course and earn CE credits. During this 1-hour, self-study course, you’ll learn more about:
- the importance of discussing and planning for clients’ health needs in each life stage,
- what those conversations include, and
- how to help clients plan to cover these needs.
Looking at the role that health solutions play in each life stage will help you more easily start the conversation with clients and address their current and future health needs.
For more information about Money for Life and health needs, visit sunlife.ca/moneyforlifeadvisor. You’ll find videos, case studies, sales strategies and other resources to help you start the conversation. Read part 1 about basic needs, $53K a year on the basics — can retirement plans handle it?, and look for the next part in our Money for Life series.
For more information, please contact a member of your Insurance sales team.
Money for Life – Sun Life Financial’s customized approach to financial and retirement planning — offers a conversation framework to help clients talk about their short- and long-term goals, and get them thinking about how their needs will change over time. Supported by a suite of tools and resources, this approach can help you have conversations and present the right mix of life, health and wealth solutions.
You might also like…
- $53K a year on the basics — can retirement plans handle it?
- Personal debt is threatening retirement plans
* Of the survey participants who admitted to experiencing a serious health event or accident, 42% described some degree of financial hardship. 2014 Sun Life Canadian Health Index.
** Sun Life Financial’s customized approach to financial and retirement planning.
1 Previous three bullets are from 2014 Sun Life Canadian Health Index.
2 2013 Sun Life Canadian Health Index.
3 2014 Sun Life Canadian Health Index.