Many Canadians are lacking disability insurance, and financial advisors should embrace the opportunity to offer this kind of coverage – especially since few of their competitors are doing so, insurance experts said on Tuesday.

Speaking at the Independent Financial Brokers’ fall summit in Toronto on Tuesday, Dawn Marie Stevens, eastern regional vice president of sales at Newmarket, Ont.-based The Edge Benefits, said there’s a lack of disability coverage within many segments of the Canadian population. Specifically, 58% of self-employed Canadians lack disability coverage, and 40% of small businesses don’t offer benefits.

“What’s the best target market for disability? The self-employed,” Stevens said. “There’s a huge opportunity.”

Furthermore, of the disability insurance policies sold today, Stevens said about 80% are sold to higher income Canadians, leaving low and middle-income Canadians underserved.

This gap in coverage is not being addressed by the financial advisor community, Stevens said.

“Advisors have stepped back from doing disability,” she said, “because it’s a complicated product, a lot of clients get declined, [advisors] don’t know a lot about it.”

In fact, Max Mahardi, a sales representative in the individual products division at Ontario Blue Cross, said that of about 30,000 licensed life insurance brokers in Ontario, only about 10% actively market disability insurance.

The speakers admitted that disability insurance can be a hard product to sell, since it’s typically more expensive than term life insurance, and clients must often be convinced of the need for this type of coverage.

“Clients need to be sold it,” Stevens said. “You need to do a good job of establishing the need.”

But the need is certainly there, the speakers said, as clients face considerably high chances of becoming disabled at some point during their careers. Mahardi pointed to statistics showing that of 1,000 individuals who are 40 years old, 35% of males and 38% of females will become disabled for 90 days or longer before they reach age 65. And, he said the average length of a disability that’s longer than 90 days is 2.9 years.

“How many of your clients are going to be able to sustain no income for three years?” Mahardi said. “I’d say almost 99% would be in bankruptcy in a case like that.”

Canadians’ need for disability insurance has become even more pressing as household debt has surged to record-high levels. The debt-to-income ratio for the average Canadian household has reached 163.4, according to the latest figures from Statistics Canada. This leaves Canadians with very little capacity to handle even a short-term absence from the workforce, Stevens said.

“They do not have emergency funds set aside. They’re living paycheque to paycheque, and that’s the new normal,” she said. “So, the need to cover that has grown more than ever.”