Few clients save for a sick day, says survey of Canadian advisors

(November 13, 2002) Canadian financial advisors want their clients to save more for future healthcare costs, yet a new survey suggests few clients follow this advice. The Health and Wealth Survey was commissioned by Advisor.ca, Advisor’s Edge and Objectif Conseiller to gauge the opinions of advisors regarding their clients’ concerns about the funding of healthcare, […]

By Jim MacDonald | November 18, 2002 | Last updated on November 18, 2002
4 min read
  • The imperative of critical illness and disability insurance
  • New taxes could pay for additional healthcare funding, Senate committee suggests
  • Romanow healthcare report called “benchmark for next generation”
  • Plan for “slow motion crisis” of an aging Canada, pension industry told
  • Critical illness could lead to emergency financial planning for many Canadians
  • Medical savings accounts bring choice, planning to healthcare: Report

    The survey found that 68% of advisors said their clients felt government will have difficulty meeting their future healthcare needs. Another 24% said government would not be able to meet these needs.

    Not surprising, ninety-six per cent of advisors said their clients feel either very, quite or somewhat concerned about the availability of healthcare funding. Concerns were expressed about the funding of long-term care, drugs, home care and hospital care.

    It follows then that the majority of advisors felt that planning for healthcare expenses was an important issue to their clients in their overall financial plan. Only 11% of respondents said the issue was “not very important” to their clients.

    Yet, on average, only 16.8% of advisors had clients that had actually saved money for a healthcare-funding plan. One-quarter of the respondents said none of their clients had allocated savings. Slightly more than 40% of respondents’ clients would have to liquidate assets in order to meet significant healthcare funding needs. (For more relevant statistics and insights from this survey, click here or read “Prescription for Health” on page 34 of the November 2002 edition of Advisor’s Edge.)

    “The majority of respondents who report that their clients allocate funds to a ‘healthcare’ plan for the future report that they are contributing healthcare funds to disability insurance (78%),” according to the results of the survey.

    Fifty-eight per cent of advisors had clients holding critical illness insurance policies and 47% had clients with long-term care insurance.

    A strong majority of advisors (83%) recommended that new products such as tax-assisted medical savings accounts should be approved to help Canadians save for their healthcare expenses. This was one of the top five “tax system strategies” suggested by advisors. The other strategies were tax deductions for certain medical expenses, deductible health insurance premiums, “medical RRSPs/RESPs” and complete tax deductibility of health expenses.

    “Respondents feel that the tax system can play a large role in the financial planning of healthcare, by offering incentives for planning in the form of tax deductions and/or savings on medical expenses, medical insurance and opening medical savings accounts/plans,” said the report.

    Last month, the Standing Senate Committee on Social Affairs, Science and Technology said Canada’s healthcare system is not fiscally sustainable and needs an additional $5 billion annually. A report from the committee recommended the money be raised through new taxes. The committee preferred the introduction of an annual healthcare insurance premium, ranging from 50 cents to $4 a day, depending on income.

    A Decima Research poll, conducted last month for Investors Group, found that 67% of Canadians expect they will need more personal savings to pay for medical care. Just over half (55%) of the respondents did not want to pay higher taxes to fund healthcare, but 41% would pay a tax hike.

    A survey released in July by Manulife Financial said 84% of Canadians were not confident that they could pay the extra costs of treating and/or recovering from a serious illness.

    A Royal Commission on the Future of Health Care in Canada, headed by former Saskatchewan premier Roy Romanow, is expected to release its recommendations later this month.

    Advisor.ca, Advisor’s Edge and Objectif Conseiller are all properties of Rogers Media.

    • • •

    Click here to read more about the Health and Wealth Survey in an article from the November 2002 edition of Advisor’s Edge magazine.

    How do you think Canadians should tackle the issue of healthcare financial planning? You can comment on the survey or the healthcare issue in general by simply clicking here to enter the “Free For All” forum in the Talvest Town Hall of Advisor.ca.

    • • •

    Filed by Jim MacDonald, Advisor.ca, jmacdonald@advisor.ca.

    (11/13/02)

    Jim MacDonald

    • (November 13, 2002) Canadian financial advisors want their clients to save more for future healthcare costs, yet a new survey suggests few clients follow this advice.

    The Health and Wealth Survey was commissioned by Advisor.ca, Advisor’s Edge and Objectif Conseiller to gauge the opinions of advisors regarding their clients’ concerns about the funding of healthcare, and to get a sense of how important healthcare financial planning is to clients and the savings vehicles they use. Advisors were also polled on what new savings products should be available.

    A sample of advisors across Canada was invited to complete the survey’s online questionnaire in April and June 2002. Approximately 380 responses were received. The majority of respondents were involved in financial planning, mutual fund sales and insurance.

    Related News Stories
  • The imperative of critical illness and disability insurance
  • New taxes could pay for additional healthcare funding, Senate committee suggests
  • Romanow healthcare report called “benchmark for next generation”
  • Plan for “slow motion crisis” of an aging Canada, pension industry told
  • Critical illness could lead to emergency financial planning for many Canadians
  • Medical savings accounts bring choice, planning to healthcare: Report

    • The survey found that 68% of advisors said their clients felt government will have difficulty meeting their future healthcare needs. Another 24% said government would not be able to meet these needs.

    Not surprising, ninety-six per cent of advisors said their clients feel either very, quite or somewhat concerned about the availability of healthcare funding. Concerns were expressed about the funding of long-term care, drugs, home care and hospital care.

    It follows then that the majority of advisors felt that planning for healthcare expenses was an important issue to their clients in their overall financial plan. Only 11% of respondents said the issue was “not very important” to their clients.

    Yet, on average, only 16.8% of advisors had clients that had actually saved money for a healthcare-funding plan. One-quarter of the respondents said none of their clients had allocated savings. Slightly more than 40% of respondents’ clients would have to liquidate assets in order to meet significant healthcare funding needs. (For more relevant statistics and insights from this survey, click here or read “Prescription for Health” on page 34 of the November 2002 edition of Advisor’s Edge.)

    “The majority of respondents who report that their clients allocate funds to a ‘healthcare’ plan for the future report that they are contributing healthcare funds to disability insurance (78%),” according to the results of the survey.

    Fifty-eight per cent of advisors had clients holding critical illness insurance policies and 47% had clients with long-term care insurance.

    A strong majority of advisors (83%) recommended that new products such as tax-assisted medical savings accounts should be approved to help Canadians save for their healthcare expenses. This was one of the top five “tax system strategies” suggested by advisors. The other strategies were tax deductions for certain medical expenses, deductible health insurance premiums, “medical RRSPs/RESPs” and complete tax deductibility of health expenses.

    “Respondents feel that the tax system can play a large role in the financial planning of healthcare, by offering incentives for planning in the form of tax deductions and/or savings on medical expenses, medical insurance and opening medical savings accounts/plans,” said the report.

    Last month, the Standing Senate Committee on Social Affairs, Science and Technology said Canada’s healthcare system is not fiscally sustainable and needs an additional $5 billion annually. A report from the committee recommended the money be raised through new taxes. The committee preferred the introduction of an annual healthcare insurance premium, ranging from 50 cents to $4 a day, depending on income.

    A Decima Research poll, conducted last month for Investors Group, found that 67% of Canadians expect they will need more personal savings to pay for medical care. Just over half (55%) of the respondents did not want to pay higher taxes to fund healthcare, but 41% would pay a tax hike.

    A survey released in July by Manulife Financial said 84% of Canadians were not confident that they could pay the extra costs of treating and/or recovering from a serious illness.

    A Royal Commission on the Future of Health Care in Canada, headed by former Saskatchewan premier Roy Romanow, is expected to release its recommendations later this month.

    Advisor.ca, Advisor’s Edge and Objectif Conseiller are all properties of Rogers Media.

    • • •

    Click here to read more about the Health and Wealth Survey in an article from the November 2002 edition of Advisor’s Edge magazine.

    How do you think Canadians should tackle the issue of healthcare financial planning? You can comment on the survey or the healthcare issue in general by simply clicking here to enter the “Free For All” forum in the Talvest Town Hall of Advisor.ca.

    • • •

    Filed by Jim MacDonald, Advisor.ca, jmacdonald@advisor.ca.

    (11/13/02)

    (November 13, 2002) Canadian financial advisors want their clients to save more for future healthcare costs, yet a new survey suggests few clients follow this advice.

    The Health and Wealth Survey was commissioned by Advisor.ca, Advisor’s Edge and Objectif Conseiller to gauge the opinions of advisors regarding their clients’ concerns about the funding of healthcare, and to get a sense of how important healthcare financial planning is to clients and the savings vehicles they use. Advisors were also polled on what new savings products should be available.

    A sample of advisors across Canada was invited to complete the survey’s online questionnaire in April and June 2002. Approximately 380 responses were received. The majority of respondents were involved in financial planning, mutual fund sales and insurance.

    Related News Stories
  • The imperative of critical illness and disability insurance
  • New taxes could pay for additional healthcare funding, Senate committee suggests
  • Romanow healthcare report called “benchmark for next generation”
  • Plan for “slow motion crisis” of an aging Canada, pension industry told
  • Critical illness could lead to emergency financial planning for many Canadians
  • Medical savings accounts bring choice, planning to healthcare: Report

    • The survey found that 68% of advisors said their clients felt government will have difficulty meeting their future healthcare needs. Another 24% said government would not be able to meet these needs.

    Not surprising, ninety-six per cent of advisors said their clients feel either very, quite or somewhat concerned about the availability of healthcare funding. Concerns were expressed about the funding of long-term care, drugs, home care and hospital care.

    It follows then that the majority of advisors felt that planning for healthcare expenses was an important issue to their clients in their overall financial plan. Only 11% of respondents said the issue was “not very important” to their clients.

    Yet, on average, only 16.8% of advisors had clients that had actually saved money for a healthcare-funding plan. One-quarter of the respondents said none of their clients had allocated savings. Slightly more than 40% of respondents’ clients would have to liquidate assets in order to meet significant healthcare funding needs. (For more relevant statistics and insights from this survey, click here or read “Prescription for Health” on page 34 of the November 2002 edition of Advisor’s Edge.)

    “The majority of respondents who report that their clients allocate funds to a ‘healthcare’ plan for the future report that they are contributing healthcare funds to disability insurance (78%),” according to the results of the survey.

    Fifty-eight per cent of advisors had clients holding critical illness insurance policies and 47% had clients with long-term care insurance.

    A strong majority of advisors (83%) recommended that new products such as tax-assisted medical savings accounts should be approved to help Canadians save for their healthcare expenses. This was one of the top five “tax system strategies” suggested by advisors. The other strategies were tax deductions for certain medical expenses, deductible health insurance premiums, “medical RRSPs/RESPs” and complete tax deductibility of health expenses.

    “Respondents feel that the tax system can play a large role in the financial planning of healthcare, by offering incentives for planning in the form of tax deductions and/or savings on medical expenses, medical insurance and opening medical savings accounts/plans,” said the report.

    Last month, the Standing Senate Committee on Social Affairs, Science and Technology said Canada’s healthcare system is not fiscally sustainable and needs an additional $5 billion annually. A report from the committee recommended the money be raised through new taxes. The committee preferred the introduction of an annual healthcare insurance premium, ranging from 50 cents to $4 a day, depending on income.

    A Decima Research poll, conducted last month for Investors Group, found that 67% of Canadians expect they will need more personal savings to pay for medical care. Just over half (55%) of the respondents did not want to pay higher taxes to fund healthcare, but 41% would pay a tax hike.

    A survey released in July by Manulife Financial said 84% of Canadians were not confident that they could pay the extra costs of treating and/or recovering from a serious illness.

    A Royal Commission on the Future of Health Care in Canada, headed by former Saskatchewan premier Roy Romanow, is expected to release its recommendations later this month.

    Advisor.ca, Advisor’s Edge and Objectif Conseiller are all properties of Rogers Media.

    • • •

    Click here to read more about the Health and Wealth Survey in an article from the November 2002 edition of Advisor’s Edge magazine.

    How do you think Canadians should tackle the issue of healthcare financial planning? You can comment on the survey or the healthcare issue in general by simply clicking here to enter the “Free For All” forum in the Talvest Town Hall of Advisor.ca.

    • • •

    Filed by Jim MacDonald, Advisor.ca, jmacdonald@advisor.ca.

    (11/13/02)