Disability insurance plans allow you to receive a certain amount of income, for a predetermined amount of time, in the event of an accident or medical situation. The only reason someone should apply for disability insurance is if they cannot work and need an income. Monthly payments, for this sort of policy, are determined by the profession (if any), how long the policy is active and what amount the insurance covers. A contract is only concluded when the user has received maximum insurance coverage – or, in most cases, a percentage of their normal earnings (approximately 60 – 70%).
Monthly payment amounts depend on various conditions:
A waiting period of 0, 30 or 60 days.
Status as smoker or non-smoker
Type of profession
Period of disability (2, 5, 10 or 65 years)
It is important that a disability policy remains consistent, in terms of monthly payments. This means that you are eligible for coverage if you cannot work due to illness or injury but you are not covered from the moment you are able to work again. If you are not covered through your job, it is important to purchase a policy that can cover you in the case of any sort of accident or unexpected illness.
Many employers offer group plans through work but you are able to purchase individual plans as well! The amount of coverage will be based on your job and your income. Doctors, accountants, dentists and lawyers have the best coverage but have very low payments because of their high incomes.
The amount that most insurance policies cover is usually limited to 70% of the income of the insured person.
A disability payment period can last for 2 or 5 years or until the age of 65.
There are two types of disability insurance:
The first is short term disability insurance. Short term disability insurance is temporary insurance, even though some individual plans can last up to 2 years. If your health condition does not allow you to return to work after short term disability insurance, you can upgrade to long-term disability.
long-term disability insurance can cover you for five years or until age 65.
While disability insurance policies make up less than 20% of all insurance policies in Canada, it is really important to know your options!
Sometimes disability plans can be complicated but don’t let that scare you – an accident or unexpected illness can leave you in a really horrible financial situation if you are not covered!
Please get in touch if you would like me to help you find a suitable disability insurance plan – either because you are in a situation that requires it or you are interested in taking precautionary measures!
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