Many Canadians are vulnerable to personal financial crises when experiencing unforeseen challenges such as sudden illnesses or extended disabilities, according to a study by investment firm Edward Jones released March 7.
The study also indicates that less than one third of Canadians have insurance coverage for serious unforeseen life events, despite 63 per cent having some form of insurance.
Almost half of those surveyed (48 per cent) said they had not set aside enough money to cover their expenses if ever they became suddenly ill or injured and could not work. Twenty-three per cent of respondents said they had not prepared financially in case of premature death. Only 16 per cent had purchased a life insurance policy to cover unpaid mortgage payments in the event of their death.
Good planning considers worst-case scenarios
"While Canadians may think they are protected, there is a gap between what many people have and what they might actually need to cover a serious issue," said James McKeown, senior insurance specialist with Edward Jones. “While planning for the unexpected may seem like an oxymoron, it is a vital part of any long-term financial strategy, and this includes considering worst-case scenarios. Smart financial planning is like venturing out to sea — even great sailors pack a life jacket."
The study also found that just one-quarter of Canadians had personal term life insurance coverage, while 18 per cent of respondents had whole life or universal life insurance coverage. Under 10 per cent of those surveyed said they had critical illness or long term care insurance coverage.