Money matters.* Many of us think of our personal and professional lives as separate, but when it comes to cash flow, they’re inextricably linked. Our work begets paycheques, and our paycheques beget nights out, nights in, and just about everything in between. This means that the ramifications of a disability, illness, or accident that keeps you out of work can be catastrophic—especially if you aren’t prepared.
Did you know that nearly half of Canadian households report financial hardship when someone has to take time off due to a disability?1
That’s a reality Laura Wise, Wealth Advisor and Financial Planner at Lawyers Financial Advisory Services, says young lawyers should be aware of. “I’ve been in this industry for over 25 years,” she says. “I’ve seen a lot of bad things happen to good people.”
BEST-LAID PLANS, MEET WORST-CASE SCENARIO
In her former role as an insurance advisor, Wise helped lawyers and their families through all manner of nightmare scenarios from cancer diagnoses to life-changing accidents and chronic illnesses. As harrowing as these experiences may be, Wise takes solace in the role insurance plays in easing the financial strain that often accompanies a health crisis. “Of course, I’d rather see someone get better or not get sick, to begin with,” she explains, “but I've seen first-hand how insurance payouts help bad situations get a little better. It can be the difference between someone keeping or losing their home.”
Most people don’t think twice about insuring their home or car but often hesitate when it comes to protecting their income.
GENERATION SICK
We all know a colleague, friend, or friend-of-a-friend who’s been impacted by a life-changing accident or diagnosis. But it can be easy to classify these stories as the kind of thing that only happens to other people.
Unfortunately, there are some troubling statistics you might want to consider.
Rates of cancer diagnoses among people aged 15-49 have increased 79.1% since 1990,2 with specific types of cancer, such as colorectal, breast, and lung, becoming increasingly common among younger populations.3
Rates of disability are also up in Canada, with a 2022 survey reporting that 27% of Canadians aged 15 and up have disabilities that limit their daily activities, compared to 22% in 2017.4
Wise can attest to these worrying trends among her younger clients, describing the prevalence of health problems such as Crohn's disease, high blood pressure, diabetes, and mental health issues. “This generation is less healthy than their parents,” she says, also drawing attention to the fact that lawyers often work in high-stress environments that can make them particularly prone to ailments like high blood pressure and mental health issues.
THE ROAD TO RECOVERY IS PAVED WITH REST AND RELAXATION
The good news is that as rates of diagnosis rise, so do rates of survival. Though exact figures vary between types of cancer and stage at diagnosis, on average you’re 11% more likely to beat cancer today than you were in the early 1990s.5
This is where the value of “living benefits” comes into play, as these policies offer financial support as you focus on recovery. Disability insurance functions as an income replacement, providing regular payments if you’re unable to work due to an illness or an accident. Critical illness insurance, which Wise describes as, “a great complement to disability coverage,” offers a lump-sum payment upon the occurrence of certain medical events such as a heart attack, stroke, or cancer diagnosis. “The money is tax-free, and you can use it for whatever you want,” says Wise. “I’ve seen clients take their kids to Disneyland and even cross the border into the U.S. for treatment.”
NOT ALL POLICIES ARE CREATED EQUALLY
Wise knows that insurance policies aren’t the kind of exciting, glamorous purchase you dreamed of during all those years of law school and articling. “Nobody celebrates after buying insurance,” she says. “It’s the kind of thing you hope you never use.” She also points out that most people don’t think twice about insuring their home or car but often hesitate when it comes to protecting their income.
At the very least, young lawyers should know what these policies can offer.
Even those with employee group benefits need to be aware they might not have all the coverage they need. “People don’t always look at their benefits plan,” Wise says, highlighting the specific needs of those earning high salaries in the legal field: “I’ve had clients whose group disability coverage offered $2,000 a month. Unless you’re making less than $30,000 a year, that’s not nearly enough to keep up with your lifestyle.” Supplementing group benefits with a personal plan can be a smart choice to make sure you and your family are in line to receive the support you need.
And here’s the thing about insurance that never changes, regardless of life’s narrative turns: the younger and healthier you are, the lower your rates will be. So, invest in insurance now, with the youngest version of yourself you’ve got available.
We can help.
Real life almost never sticks to the outline. Ask an advisor about insurance that protects your income and gives you the time and space you need to recover.
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*Paycheques matter, and so do premiums. As a not-for-profit organization, we’re committed to negotiating the best possible insurance rates for lawyers, their families, and their firms. With Lawyers Financial disability insurance, a 28-year-old non-smoking male lawyer in Alberta can protect $100,000 of annual income for as little as $1.86 per day, as of August 28, 2024. With a package of Lawyers Financial term life and critical illness insurance, a 28-year-old non-smoking female lawyer in New Brunswick can get $150,000 of life insurance and $150,000 of critical illness coverage for as little as $1.19 per day. Ask an advisor for a personalized quote to see exactly how these rates apply to you.
Sources: 1. Insurance Business Magazine, “Half of Canadians financially unprepared to miss work,” February 17, 2016. 2. Global News, “Cancer cases soared 79% globally among young adults over past 3 decades: study,” September 6, 2023. 3. Time, “Why are so many young people getting cancer? It’s complicated,” March 26, 2024. 4. Statistics Canada, “The disability rate in Canada increased in 2022,” April 3, 2024. 5. Canadian Cancer Statistics Advisory Committee in collaboration with the Canadian Cancer Society, “Canadian Cancer Statistics 2023.”
