Disability Insurance for People Over 65
According to Sun Life Financial's Annual Unretirement Index, not only are Canadians working past age 65, but they're also doing it because they have to. The index shows that the number of Canadians who expect to retire by 66 has fallen by half between 2008 and 2012 from 51% to 27%.
The number of people who expect to be working full-time at age 66 also rose by 10% to 26% between 2008 and 2012. Plus, 32% of respondents expect to be working part-time at 66. Sun Life Financial president Kevin Dougherty ties these dramatic findings to the onset of the financial crisis in 2008 and 2009.
“The low-interest environment for sure has had an impact on people's savings and projections," Dougherty told The Canadian Press. “But really the realization is that people are living longer and longer.”
Back in 2008 and 2009, more Canadians said they would work past the age of 65 because they enjoy their jobs and wish to stay mentally active. However, since 2010, the top reason given for working past 65 has been to “earn enough money to pay basic living expenses.”
Only one-third of those who took the survey thought they were in good shape when it came to their retirement savings. Instead, four out of ten respondents believed there was a serious risk that they would outlive the retirement money they had saved.
In fact, the survey also found that six in ten Canadians think they will retire with less than $250,000 in savings, while 38% say they will retire with less than $100,000 saved.
As a consequence, with Canadians working longer, there's an increased need for disability insurance that extends beyond the insured's 65th birthday. Most disability policies end at age 65, but The Edge — now underwitten by The Cooperators — offers "injury-only" guaranteed-issue coverage until age 75.
Issue ages are 18 to 69 and benefit amounts are $1,000 up to $6,000 a month, depending on occupation. The plan offers coverage from day one. Partial disability coverage issues 50% of the benefits for up to 180 days, and waiver of premium after 30 days of total disability, while benefits are payable and a return-to-work benefit is included. This policy includes rehabilitation and financial assistance in returning the insured to work.
The Edge plan also offers an optional benefit, which includes accidental death and dismemberment coverage up to $300,000. This pays out on top of any other insurance the insured may have. As well, Manulife Financial offers a disability plan called Personal Accident Disability Insurance. All applicants qualify for at least a $1,000 monthly benefit. The plan is available to insureds aged five to 80 with interest renewable all the way to age 90. The plan is also available on an "Injury-Only" basis. Like The Edge policy, additional accidental death and dismemberment benefits are available on the Manulife Financial plan.
There are some exclusions to look out for on the non-medical, "Injury Only" plan. Benefits are not payable for an accident or injury that results from war, elective medical treatment, suicide or self-inflicted injuries committing a criminal offence or while imprisoned, misusing medication and abusing drugs. Participation in professional sports or hazardous activities, such as scuba diving, boxing, parachuting, rock climbing skydiving, hang-gliding and bungee jumping are also excluded. A sickness rider is available on the Manulife and Edge policies, but additional underwriting is required.
Ken Hunter, a partner at Hunter McCorquodale, a firm which specializes in high risk clients points out, "The problem with accident coverage is, accidents represent a small portion of disabilities among white-collar risks, particularly at older ages."
Instead, his firm offers a quote for full-accident and sickness coverage for seniors, which is underwritten by Lloyd's of London.
Hunter Mccorquodale offers unique solutions for applicants still working beyond 65. The coverage can extend for as long as the insured is working. They also offer high issue limits for employees earning incomes. What they offer is the maximum limit offered by traditional disability carriers.
If you would like more information on disability insurance beyond age 65, call us at 1-866-899-4849 or visit our Disability Insurance Quote Page for a free, no obligation quote.