A new poll suggests many pre-retirees are ill equipped to handle a serious health event but there are ways to ensure clients are covered.
A new poll suggests many pre-retirees are ill equipped to handle a serious health event but there are ways to ensure clients are covered.
“A vast majority of people are vastly underestimating the impact or the chance of having one of these incidents happen,” said Tim Cottee, Vice President, Retiree Planning at Investors Group. “People can kind of convince themselves ‘maybe not me’.”
Cottee was speaking to one of the main findings of a recent Investors Group poll that found 40 percent of pre-retirees (those aged 45-64) believe they couldn’t cover their living expenses beyond five years were they forced into immediate retirement from a serious health event. Another 16 per cent of pre-retirees worse even less hopeful suggesting they would only be able to cover just 12 months of living expenses.
When it comes to life and health insurance Investors Group found that only 22 percent of people aged 45-64 had critical illness or long-term care insurance, an amazing statistic considering that those often are the prime earning years.
“It’s always a game when you’re talking about retirement,” says Cottee. “Prior to retirement it’s a game of putting as much of your income into savings to create that large financial vehicle that will create the income that will sustain you through retirement.”
Where advisors have an opportunity to grow their share of critical illness and long-term care insurance is by educating clients about what can happen financially when a serious health event occurs prior to retirement.
Ultimately, it’s all about risks.
Experiencing a serious health event without critical illness and/or long-term care insurance can put a big dent in a client’s financial bucket. Having a plan ahead of time that includes these types of protection can make the difference in a client’s retirement.
“The problem when you get into those final years [before retirement] you’re at the peak of your earnings but you’re also at the peak of your savings,” says the retirement expert. “You’ve accumulated a large portion of money. Psychologically, one of the most insidious things that can happen to a person is them getting in their heads that their rich without understanding they’re going to have to maintain an income for 20, 30 or even 40 years.”
“A vast majority of people are vastly underestimating the impact or the chance of having one of these incidents happen,” said Tim Cottee, Vice President, Retiree Planning at Investors Group. “People can kind of convince themselves ‘maybe not me’.”
Cottee was speaking to one of the main findings of a recent Investors Group poll that found 40 percent of pre-retirees (those aged 45-64) believe they couldn’t cover their living expenses beyond five years were they forced into immediate retirement from a serious health event. Another 16 per cent of pre-retirees worse even less hopeful suggesting they would only be able to cover just 12 months of living expenses.
When it comes to life and health insurance Investors Group found that only 22 percent of people aged 45-64 had critical illness or long-term care insurance, an amazing statistic considering that those often are the prime earning years.
“It’s always a game when you’re talking about retirement,” says Cottee. “Prior to retirement it’s a game of putting as much of your income into savings to create that large financial vehicle that will create the income that will sustain you through retirement.”
Where advisors have an opportunity to grow their share of critical illness and long-term care insurance is by educating clients about what can happen financially when a serious health event occurs prior to retirement.
Ultimately, it’s all about risks.
Experiencing a serious health event without critical illness and/or long-term care insurance can put a big dent in a client’s financial bucket. Having a plan ahead of time that includes these types of protection can make the difference in a client’s retirement.
“The problem when you get into those final years [before retirement] you’re at the peak of your earnings but you’re also at the peak of your savings,” says the retirement expert. “You’ve accumulated a large portion of money. Psychologically, one of the most insidious things that can happen to a person is them getting in their heads that their rich without understanding they’re going to have to maintain an income for 20, 30 or even 40 years.”
