Empire Life Insurance Company has launched a new Registered Disability Savings Plan (RDSP), becoming the first life insurer in Canada to offer the government-backed savings program with the added protection of segregated funds.
The RDSP, aimed at helping Canadians with disabilities and their families build long-term financial security, combines the federal government's grants and bonds with the investment flexibility and creditor protection associated with segregated fund contracts.
According to Steve Pong, senior vice-president and chief operating officer, insurance and investments at Empire Life, the plan has been designed to close a critical access gap in the market.
"Our RDSP allows those who qualify to take advantage of very powerful government benefits with the added protection and peace of mind that segregated funds offer," Pong said.
RDSPs function similarly to other registered plans, with investments growing on a tax-deferred basis. Eligible Canadians can receive up to $70,000 in Canada disability savings grants and $20,000 in savings bonds over their lifetime, with contributions capped at $200,000. Despite the advantages, only about one-third of eligible Canadians currently hold an RDSP, leaving significant untapped potential for both families and financial institutions.
Empire Life's move also expands the role of insurance-licensed advisors in the disability savings market, allowing them to offer RDSPs alongside other segregated fund and insurance-based investment products. This could open new distribution channels for insurers seeking to grow in the wealth management space.
"Applying for the Disability Tax Credit (DTC) and a Registered Disability Savings Plan (RDSP) can be complicated and confusing," Pong added. "We plan to support customers and advisors through both processes to make the experience easier."
Industry observers noted that the insurer's entry into the RDSP market signals growing interest among life insurers in integrating investment and protection solutions for underserved segments. The inclusion of segregated funds provides capital protection at maturity or death, a feature not typically offered through bank RDSPs, which may appeal to clients seeking guaranteed security alongside long-term savings growth.
The introduction of RDSPs by a major life insurer could reshape competition in Canada’s disability savings landscape, traditionally dominated by banks and mutual fund providers.
Insurers may leverage their risk management expertise and product flexibility to attract clients who prioritize both protection and investment performance.
As awareness of RDSP benefits grows, insurers offering integrated savings and protection plans could gain market share among financial advisors and families seeking long-term stability. Analysts expected that other insurers may follow suit, blending insurance-based investment solutions with government programs to capture growth opportunities in the inclusive finance segment.
