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Long-term disability rates are expected to increase by 4.7 per cent in 2018 compared to the previous year, driven by a strengthening Canadian economy, according to new research by RBC Insurance.

The annual research, which demonstrates how long-term disability claims are linked to gross domestic product growth rates, shows a significant change from last year’s research, which predicted an uptick in the Canadian economy would help boost long-term disability rates by 2.1 per cent by the end of 2017 in comparison to 2016.

Read: New report highlights correlation between LTD claims and the economy

The continued rise in long-term disability incidence rates will impact both employers and employees, said John Carinci, vice-president and head of operations and client experience at RBC Insurance, in a news release. “Businesses in Canada spent $7.5 billion for LTD coverage in 2016, which is the third largest cost to a group benefits plan after health and dental. Knowing that LTD rates are expected to rise is important information that businesses can use to help manage those costs, support their employees and ensure their operations continue to run smoothly.”

It may seem counterintuitive, but the stress and worry employees experience during uncertain economic times are a key factor in rising claims once the picture improves, the news release suggests. As growth domestic product rises and the economic outlook brightens, workers start to succumb to illness and go on leave to recoup as they begin to feel more secure and the pent up stress and anxiety takes its toll.

Read: B.C. ruling adds further clarity to long-term disability saga

“With the anticipated rise in LTD claims, businesses should proactively create awareness of the support available to employees and create contingency plans to ensure adequate staffing,” said Julie Gaudry, senior director for group insurance at RBC Insurance. “While employees must deal with the significant emotional and financial stress of being off work, business owners can be particularly hard hit as they lose employees during times of strong economic activity.”

Copyright © 2021 Transcontinental Media G.P. Originally published on

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