RBC recently launched the Family Compassionate Care Rider available for several disability insurance products. The rider lets disability insurance holders receive their monthly benefit if they need to miss work to care for a terminally ill or injured spouse or child. A survey by the insurer found that many Canadians experience this situation.
The rider grants insured the full amount of the monthly individual disability insurance benefit for a 12-month period without having to complete the typical waiting period in case of disability.
RBC Insurance added this rider to all its fully underwritten individual disability insurance products: The Professional Series, The Foundation Series, The Bridge Series and The Quantum Series. “The first thing you want in such a situation is spending the last moments with your loved one. We wanted to make sure that the person has the possibility to make that choice,” Maria Winslow, Senior Director, Life & Health, RBC Insurance, told The Insurance Journal in an interview.
In parallel with the launch of the Family Compassionate Care Rider, RBC Insurance unveiled the results of a survey of Canadian workers that found that two out of ten workers had to take time off work to care for a loved one. In addition, two-thirds of Canadian workers could not afford the loss of income if they were to be absent from work to care for a family member. Furthermore, only one in three survey respondents said they could comfortably afford the loss of income if they were to take three months off work to act as a caregiver.
Inspired by real-life case
The idea of the rider came about a few years ago, after one of Winslow’s colleagues found out her child had cancer. “She had disability insurance coverage, but as we know, you’re not disabled or unable to work in those situations, so you can’t claim for that whether you have individual or group insurance,” Winslow explains.
Winslow said she could not imagine someone in this situation having to go to work instead of being able to stay home and care for her child. “I thought about how an insurance company can help those individuals in such a situation.” She adds that she can name five friends who had to care for their spouse. “We all know someone that is or has been in this situation. We are filling a gap in the marketplace,” she says.
RBC Insurance decided to limit the scope of the rider to terminal illness or fatal injury to avoid disappointing insured, Winslow says. “We structured the product to ensure that we clearly know whether or not the definition is met. We didn’t want to make the definition no one can claim on. We didn’t want a negative experience to happen with a new product. We wanted to keep it very positive,” she explains.
Presenteeism and mental illness
When a diagnosis comes through, you want to be with that person, Winslow adds. “You can’t be functionally productive at work during that period. People come to the office because they need that income. But at the end of the day, they have a very hard time being productive, and that creates anxiety for them, to the point that unfortunately, it can sometimes cause mental illnesses, like burnout,” Winslow points out.
An industry first
Research done by The Insurance Journal and information gathered from the product comparison site InsuranceINTEL suggest that this product is the first of its kind in the Canadian market, a fact that Winslow confirms.
Usually, life insurance products have an option in case of terminal illness, but it applies to the insured only. This offer is not a rider because the insured does not pay an additional premium to benefit from it, at the insurer’s discretion. Most companies offer this option, at an amount that varies between 25% and 50% of the total life insurance amount.
RBC Insurance publicized the new product in the distribution network for six months leading up to the launch, Winslow says. “We talked about it to our advisors, and they were very excited. We received emails saying that we were filling a need, a gap in the marketplace. We’re very pleased with the response.”
The price is also appealing. The rider is available for a modest monthly premium, the insurer says.