A disability – whether it’s sudden or because of a degenerative condition – can rob you of your ability to earn a living. Disability insurance is a type of coverage that gives you protection against the chance of losing income if you become disabled and you are not able to pay your expenses.
Your earning potential is a far more valuable asset than your automobile or your home. Disability insurance is designed to protect you from the possible loss of income. What’s the possibility of this happening? It’s more than you’d imagine. Why should you consider it? It’s the only sure way to provide guaranteed coverage and guaranteed premiums.
What’s The Possibility 0f This Happening?
Question: Why should you consider a personal disability insurance plan?
Answer: Worker’s Compensation only covers work related accidents. Unemployment insurance only covers 15 weeks.
Question: Canada Pension Plan: Are you comfortable relying on the government for a benefit that can change?
Answer:Group and association coverage can fill a valuable role in long-term disability protection. However, the benefit may be limited by the definition of disability and coverage amount. Remember, a custom designed individual disability insurance plan will provide you with guaranteed coverage and guaranteed premiums.
Types Of Disability Insurance
Short-term disability insurance
Short-term disability coverage typically provides benefits for up to 6 months while you’re sick or injured. If your employer has a short-term disability plan, your claim must be made through your disability plan. Employers aren’t required to provide paid sick leave and each employer is different. Speak with your employer’s human resources staff for details on your plan including any sick time or vacation time policies that might apply.If you don’t have short-term disability coverage and your employer does not offer one, you may be eligible for Employment Insurance (EI) sickness benefits.
To be eligible for EI sickness benefits, you must:
- usually have used all of your sick leave
- have worked enough hours
Long-term disability insurance
Most long-term disability plans will replace 60% to 70% of your normal income. Each disability plan is different. Some may provide disability benefits for up to two years if you’re unable to return to the job you had before becoming disabled. After two years, you may continue to receive benefits only if you’re unable to work at any job.
Long-term disability insurance benefits generally begin when the following benefits end:
- short-term disability insurance
- sick leave benefits from your employer
- EI benefits
What To Ask When Buying Disability Insurance
When buying disability insurance make sure you understand the following. Ask your benefits administrator or insurance agent about anything you don’t understand.
Is the policy “guaranteed renewable” meaning you have the right to renew the policy, usually without additional evidence
General terms and conditions
- How the plan defines disability
- Are there any exclusions
- Are there any pre-existing condition clauses in the plan
- that you should be aware of
- How much the policy will cost
Do you still need to make premium payments while living with a disability
- the amount of money you’ll get each month
- Are the benefits taxable
- Will benefits be adjusted for inflation
- How long you need to wait before starting to receive benefits
- Does the plan include partial disability benefits
- Can you increase your coverage without a medical exam
- Is your group plan provided by an insurance company or is it self-funded by the employer
- Will you still get benefits from a self-funded plan if the employer goes bankrupt or faces financial difficulty
- If you leave your job, are there provisions to continue your existing coverage until you get new coverage
Frequently Asked Questions
What is the meaning of insurance?
Why do I need Insurance?
Why should one cover oneself immediately ?
How to Choose the Best Term Plan?
Claim settlement record of a life insurance company indicates the ultimate moment of truth for the customer. Claim settlement record can be assessed through a percent number (Claim Settlement Ratio) released by IRDAI (Insurance Regulatory and Development Authority India) every year.
How much life cover do I need?
If budget is a problem, you could go for monthly premium payment option over a yearly commitment. However, it is important to have a sufficient life cover so that your family’s financial security is not compromised.