would you insure the goose or just the eggs?
People rarely leave homes, cars, or other items of high value uninsured, but for some reason neglect insuring their income, which makes everything else they acquire possible. Disability insurance (DI) provides a regular monthly income in the event that you are unable to work due to illness or accident. It is a product of self-reliance and available to a wide-range of occupations.
Canadians have a five times higher chance of disability occurring before age 65 than death. Government plans such as CPP provide only very basic security.
Obtaining disability coverage at a younger age is highly advised, as the rate locks-in for the life of the policy, yet special features of the plan allow you to increase your coverage amounts in the future, as your income rises. Policies purchased before age 55 can include premium refunds of up to 100%, less any claims paid out.
Unlike the life insurance market, the disability insurance market is not very competitive. There are a limited number of Canadian insurers offering truly comprehensive DI policies. Therefore unlike term life insurance, where price is a major motivator, with DI the educated consumer is seeking the right long-term, permanent plan with the features, benefits, and value that match the needs. When you choose a disability insurance plan, you are making an important decision that will last throughout your working life: to protect your income, the cornerstone of your financial prosperity.
Group Disability Insurance vs. Individual Disability Insurance
If you own an individual DI policy, you can opt-out of any group long-term disability that might be available at your place of employment. Although the price is considerably higher for an individual policy, they have numerous advantages over group policies:
- in the event of disability, it supplements CPP resulting in a higher monthly payment
- available options such as cost of living adjustment, "own occupation" definition, and 100% return of premium
- complete portability: an individual policy goes where you go, throughout your career
Disability Insurance
Critical Illness insurance (CI) is often used in conjunction with disability income protection. Critical illness insurance is not a replacement for it, but works together with DI to provide more complete protection. CI provides a lump sum payment, 30 days after the diagnosis of a covered condition, while most disability policies carry a 90 or 120 day waiting period. In addition to this, diseases often need to reach a more advanced stage before the person becomes disabled as defined by the DI contract.
An example of this would be life-threatening cancer – a CI policy would pay out, but until cancer reaches its more advanced stage it does not trigger a DI claim. Critical illness insurance provides the short term cash needed to pay off debts, seek better medical care, or take time off work to heal. Should the condition become prolonged resulting in a medical disability, only then does the regular monthly payment from disability insurance provide the foundation for long term financial support until age 65.
Disability Insurance Quote Request
Your information will not be shared, and is not mandatory to receive a quote. You will only be contacted by a Capital Group Insurance broker at your request.