Cut-off age for long-term disability benefits should remain the same, says industry expert

Dave Patriarche of the Canadian Group Insurance Brokers argues that increasing long-term disability coverage age would result in less coverage for consumers

Cut-off age for long-term disability benefits should remain the same, says industry expert
In a recent report by actuarial experts John Have and Robert Brown, the study’s authors called for legislation to increase the cut-off point for those eligible for employee benefits. This, they said, would protect workers, but also benefit employers through higher productivity among older staff.

In the opinion of Dave Patriarche of the Canadian Group Insurance Brokers (CGIB), however, further legislation on age limits is not the way forward.

“This survey on benefits ending at age 65, the big issue is with long-term disability,” he says. “In almost every case, long-term disability ends at age 65 – that’s the way it’s always been. If you don’t have a termination age for long-term disability then people will work until they are disabled.”

With Canada’s aging demographic, that means a large amount of people, representing a huge cost for insurers and employers to meet their benefit plan obligations. Patriarche is the founder of the CGIB and president of his own firm, Mainstay Insurance Brokerage. Employee benefits are the bread and butter of his business, so he has strong thoughts on the implications of increasing the cut-off age for long-term disability.

 “If you force insurance companies through legislation to treat everybody the same, what you get is dramatically reduced benefits,” he says. “The easiest way for an insurance company or an employer providing the benefit would be to say everybody gets a five-year benefit. So if you are 35 years old and become disabled for life you will get income for five years, not until age 65.”

While offering long-term disability coverage to those past retirement age would be folly in Patriarche’s view, he sees no reason why that accommodation can’t be afforded when it comes to other benefits. As he explains, it is already standard practice with many firms in the industry.

“I definitely think we can extend benefits for things like life insurance and health and dental insurance past age 65 with no problem whatsoever,” he says. “Companies like Great-West Life and Medavie Blue Cross have been doing it for years. Manulife goes to age 70; Sun Life goes to 80.”

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