Canadians say they’ll use Retirement Funds to get by after Disability or Major Illness, says RBC Insurance Survey

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Half of Canadians prepared to work longer as a result

MISSISSAUGA, December 9, 2004 � More than half (52 per cent) of all employed Canadians say they would use money currently earmarked for their retirement and work longer than planned to deal with costs associated with disability or major illness, according to an RBC Insurance/Ipsos-Reid study.

The RBC Insurance survey shows the likelihood of using retirement funds to pay bills and working longer than planned in the event of illness or injury is higher among employed Canadians aged 55 and over (58 per cent). This compares with half (50 per cent) of employed 18 to 34 year olds and 51 per cent of employed Canadians aged 35 to 54 who say they would use their retirement savings and work longer.

�The financial burden associated with a disability or serious illness can be astronomical,� said John Young, president & CEO, RBC Life Insurance Company. “While using retirement income to get by may seem like a good solution, dipping into savings means risking the long term value of the investment. The reality is that unless Canadians plan to save more in the future or work longer than planned, using retirement income to pay for disability or critical illness could compromise their income level and standard of living when they retire – something most people want to avoid at all costs.”

According to the 2001 Participation and Activity Limitations survey (PALS), sponsored by the Government of Canada, some 3.6 million Canadians have a disability — approximately one in eight. Furthermore, while the overall rate of disability in Canada was 12.4 per cent in 2001, the rate of disability increases with age.

“The potential for Canadians to become critically ill or disabled becomes more of a reality as they age, which is also when their retirement income will be needed for what it was intended,� added Young. �Canadians may be less likely to exhaust retirement funds if they were prepared for disability or illness and had a financial plan to address these issues. It�s important for advisors to have clients look at their entire financial picture and ensure that options such as disability, critical illness and long term care insurance are considered.”

The survey also shows regional differences across Canada, with those living in Quebec saying they are least likely (43 per cent) to use their retirement savings and work longer than planned if they were ill or hurt, whereas Canadians in British Columbia, Saskatchewan and Manitoba are the most likely (58 per cent) to use their retirement funds. As for residents of Alberta and Ontario, more than half (54 per cent) were prepared to dip into their retirement funds and in Atlantic Canada, the figure was 50 per cent.

These are the findings of an RBC Insurance/Ipsos-Reid poll conducted between August 10 and August 12, 2004. The poll is based on a randomly selected sample of 2,000 adult Canadians. With a sample of this size, the results are considered accurate to within plus or minus 2.2 percentage points, 19 times out of 20, of what they would have been had the entire adult Canadian population been polled. The margin of error will be larger within regions and for other sub-groupings of the survey population. These data were statistically weighted to ensure the sample�s regional and age/sex composition reflects that of the actual Canadian population according to 2001 Census data.

For tabular results, please visit the Ipsos-Reid website at www.ipsos.ca. News Releases are available at: http://www.ipsos-na.com/news/.

About RBC Insurance

RBC Insurance, through its operating entities, including RBC Life Insurance Company, provides a wide range of creditor, life, health, travel, home, auto and reinsurance products to more than five million North American clients. As one of the top 10 life insurance producers and the leading provider of individual living benefits in Canada, RBC Life Insurance Company offers a comprehensive portfolio of individual and group life and health insurance solutions. These products are distributed through more than 17,000 independent brokers affiliated with producer groups, financial planning firms and stock brokerage firms, as well as through direct sales and a network of career sales representatives. For more information, please visit www.rbcinsurance.com.

About RBC Financial Group

Royal Bank of Canada (RY: TSX, NYSE) uses the initials RBC as a prefix for its businesses and operating subsidiaries, which operate under the master brand name of RBC Financial Group. Royal Bank of Canada is Canada�s largest bank as measured by market capitalization and assets, and is one of North America�s leading diversified financial services companies. It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking, and transaction processing services on a global basis. The company employs 60,000 people who serve more than 12 million personal, business and public sector clients through offices in North America and some 30 countries around the world. For more information, please visit www.rbc.com.