Crossgrove Blog

Tips for 2 tough conversations with clients

Mon, Jan 9, 2023 5:00 PM GMT

Client conversations, potentially uncomfortable ones, are required for comprehensive financial planning. Tips to begin a couple of tough conversations — specifically, on the topics of care needs as clients age and living benefits — were presented in Toronto on Tuesday at the annual fall summit of the Independent Financial Brokers of Canada (IFB).

Amanda Richards, senior director of business development and community integration with Chartwell Retirement Residences in Hamilton, Ont., suggested advisors can play a key role in helping clients plan proactively for when they may require care. “Your clients are looking to you as someone within their circle of trust,” Richards said during her session on understanding care options.

She suggested advisors consider the 40-70 rule: the ideal time to plan for care is when a person is in their 40s and their parent is in their 70s. If the client is the fortysomething, advisors can help them plan longer term for care costs, she said; if the client is in their 70s, advisor can help the family make decisions about care and living arrangements before they’re required, avoiding panic and time pressure.

One care option is government-subsidized long-term care homes, though “there’s no proactive way to plan for [publicly-funded] long-term care,” Richards said. “You have to have an acute need to qualify.”

The waitlist for these homes is typically long, with people prioritized by need.

An option for those who want to age in place and require support is home care, either government subsidized — clients are assessed for the number of home-care hours for which they qualify — or private. Home care works particularly well when the client has a good family or social network that can provide additional support, such as transportation and house maintenance, Richards said.

Private retirement homes, such as Chartwell provides, support a range of care needs, from independent and assisted living to care for those with dementia or at the end of life. The cost varies based on which type of care the client needs, type of accommodation and property location. There may also be waitlists, depending on the property, Richards said.

The average length of time that someone lives at Chartwell is two to three years, because people choose such living arrangements when they’re in a crisis, not as a result of planning, she said.

To begin the care conversation with clients, she suggested advisors plan the conversation in advance. Let clients know you want to talk about, and plan for, the period when they may need care, she said.

In the discussion, “position yourself as the subject matter expert” by researching care options in your area and costs ahead of time, Richards said. Providers of private retirement homes can answer questions about services, costs and waitlists as well as provide tours. (Clients considering a Chartwell residence can live in the residence for a period before making a final decision, she said. Chartwell pays no referral fees to advisors or residents.)

At a separate session, Ariana Kane, sales representative for Alberta and Saskatchewan with Humania Assurance, offered tips for discussing living benefits, which may be dismissed based on such things as their perceived complexity. Her key message was to communicate the topic simply to clients, to provide them with clarity. When advisors provide clarity, they empower clients to make decisions with confidence, she said. Without clarity, clients can’t act.

Clarity starts with advisors first understanding the available options. During the session, Kane outlined Humania’s disability and critical illness insurance, including coverages, premiums, underwriting and payouts.

To begin the living benefits conversation, she suggested advisors identify holes in their clients’ plans and present solutions. Some clients may have no living benefits insurance at all to replace their incomes, or they may be retiring and leaving their group plans. Other clients may require non-medical coverage or niche critical illness insurance, depending on their health history.

“This isn’t about selling them more,” Kane said. “It’s about giving them a more comprehensive plan.”

Canada’s healthcare system is regarded as one of the best in the world, providing all citizens and permanent residents free access to emergency care and regular doctor visits. However, there are still certain services that Medicare – the country’s universal health coverage – does not cover – including eye and dental care, outpatient prescription drugs, rehabilitation services, and private hospital rooms – which Canadians need to pay for.

So, it is not surprising that, although not required, nearly 70% of Canadians have taken out supplemental private health coverage, according to the latest figures from the Canadian Life and Health Insurance Association (CLHIA). Of these, 90% were purchased through group plans.

Overall, the nation’s health and life insurance providers paid out $30.4 billion in supplementary health benefits, $8.8 billion in disability claims, and $1.6 billion for accidental death and dismemberment, critical illness, and long-term care coverage last year, the association’s data also revealed. These numbers indicate a thriving private health insurance market in a country where the public health system already provides a good level of support for acute and accident care.

How does Canada’s healthcare system work?

Canada has a “decentralized, universal, publicly funded health system,” according to the Commonwealth Fund, a private nonprofit group that supports independent research on health care issues and provides grants aimed at improving the country’s health system.

“Health care is funded and administered primarily by the country’s 13 provinces and territories,” the organization explained. “Each has its own insurance plan, and each receives cash assistance from the federal government on a per-capita basis.”

The group added that while benefits and delivery approaches vary, all Canadian citizens and permanent residents receive “medically necessary hospital and physician services free at the point of use.”

However, not everything is covered by Medicare. According to the personal finance website moneyGenius, the public health system provides universal access to about 70% of a Canadian’s medical needs. The rest must be paid out of pocket or covered by supplemental private insurance.

What does Canada’s universal healthcare system cover?

The country’s public healthcare system covers many of the “basics.” These include:

  • Doctor and hospital visits
  • Diagnostics and examinations
  • Surgeries and treatments
  • Standard accommodations in the hospital (including care, food, and prescriptions)
  • Medically necessary dental surgeries
  • Eye examinations for Canadians aged under 18 or over 65

Each province and territory implement their own rules when it comes to health coverage, so the exclusions may vary. For the following items and services, private health insurance may be necessary to obtain cover, depending on where a person resides.

  • Outpatient prescription medications
  • Dental care
  • Psychological services
  • Massage therapy
  • Physiotherapy
  • Private hospital room stays
  • Ambulance and EMT services
  • Prescription eyeglasses
  • Medical equipment (including wheelchairs, crutches, and leg braces)

Long-term care insurance has long been lacking in the country, another thing to be aware of.

How much does private health insurance cost in Canada?

The latest available figures from the Canadian Institute for Health Information (CIHI) estimated the cost of private health insurance at $756 per year, which is equivalent to $63 monthly. The institute’s data also showed that the average Canadian paid out $902 in out-of-pocket health expenses, or slightly over $75 each month.

These numbers, however, were taken before COVID-19 shook not just Canada’s healthcare system but also that of the world’s, so the values might actually be higher at present. In addition, the figures above are mere estimates and the best way to get an accurate amount is to contact the health insurance companies directly.

What are the top private health insurance providers in Canada?

The country is home to 128 private health insurance providers, which served a total of 27 million Canadians in 2021, according to CLHIA’s latest industry fact book. These companies paid out around $30.4 billion in claims, $13.4 billion of which were for prescription drugs – the top reason for filing a claim. This was followed by dental coverage at $9.5 billion and private hospital accommodations at $1.6 billion. Vision care and massage therapy, which were valued at $1.3 billion and $1.1 billion, respectively, rounded up the top five causes of supplementary health insurance claims.

As with anything, circumstances change with time.  That’s why, at Crossgrove & Company, we scan the market in full with your specific needs in mind to bring you the optimal option(s) available when it comes to life, critical illness, and disabilityinsurance.  Contact us today to find out where gaps in your coverage may exist, and how best to go about filling in the blanks.

Reference: Advisor, Insurance Business Mag