Disability Insurance
Unforeseen accidents and illnesses can significantly impact our finances and overall security. According to the Canadian Institute for Health Information, every minute sees five individuals admitted to hospitals across Canada, with an average hospitalization duration of seven days.
Amid unpredictable challenges, securing tailored disability insurance is crucial. This financial safeguard ensures income needs are met during incapacitation, allowing focus on recovery. Recognizing income as the greatest asset, this insurance preserves financial stability amid a disability’s impact.
Protecting income is vital for resilience and well-being, not just financially but also for stability in the face of life’s unexpected challenges.
A notable feature is the “Return of Premium” rider, which refunds 50% or more of all premiums if certain qualification criteria are met.
Note: Disability insurance policy features, riders, and qualification criteria differ among insurance providers.
Questions for Self-reflection
- What specific financial obligations and expenses would I need to cover if I were unable to work due to a disability?
- Who currently relies on my income, and who might depend on it in the future? It’s essential to consider both present and potential future dependents.
- How long could I sustain my current lifestyle without my regular income in the event of a disability, and what adjustments may be necessary?
- What is the likelihood of my employer providing sufficient disability coverage, and should I supplement it with additional individual disability insurance?
- If faced with illness or disability, how might tapping into my existing retirement plans impact my retirement, and what measures have I taken to mitigate such potential effects on my financial future?
- What is the waiting or elimination period before disability benefits begin, and can I adjust it based on my needs?
Examples of Plans
Any-Occupation Disability Insurance:
- Any-occupation disability insurance pays benefits only if you’re unable to perform any job for which you’re reasonably suited based on your education, training, and experience. This type of policy typically offers lower premiums than own-occupation coverage but may provide less comprehensive protection, especially for individuals with highly specialized occupations.
Disability Income Replacement Insurance:
- Disability income replacement insurance provides a monthly benefit to replace lost income if you’re unable to work due to a covered disability, injury, or illness. This type of policy can be customized to match your income level and financial needs, offering flexibility in benefit amounts and coverage terms.
Guaranteed Renewable Disability Insurance:
- Guaranteed renewable disability insurance guarantees that the insurer will renew the policy each year without requiring proof of insurability. While premiums can still increase over time, the insurer cannot cancel the policy as long as premiums are paid. This offers a level of protection against policy cancellation due to changes in health or occupation.
Non-Cancelable Disability Insurance:
- Non-cancelable disability insurance guarantees that the insurer cannot cancel the policy, increase premiums, or change the policy terms as long as premiums are paid on time. This provides stability and certainty for policyholders, ensuring that their coverage remains intact regardless of changes in health or occupation.
Own-Occupation Disability Insurance:
- Own-occupation disability insurance provides benefits if you’re unable to perform the duties of your specific occupation, even if you’re able to work in another capacity. This type of policy is advantageous for professionals with specialized skills or training, as it offers protection if they can’t continue in their chosen field.
Examples of Benefit Riders & Riders
Benefit Riders:
Cost of Living Benefit Rider:
- Adjusts monthly disability benefit annually during disability to counteract inflation impact. Subject to specific criteria.
Death By Accidental Means Benefit Rider:
- Provides a lump-sum benefit to the beneficiary in the event of the insured person’s death by accidental means. Subject to qualification criteria.
Future Insurability Option Benefit Rider:
- Allows increasing disability coverage without new medical checks as income or needs change, ensuring coverage matches evolving circumstances.
Sickness Benefit Rider:
- Expands disability coverage to include sickness, defining disability (total and partial) to encompass both injury and sickness, with sickness defined as any disease or illness not excluded in the policy.
Transplant Surgery Benefit Rider:
- Sickness rider covers organ or tissue donor disability during transplant if policy is in force for at least six months before surgery. subject to qualification criteria.
Riders:
Catch-up Rider:
- Provides lump-sum payment equal to unpaid amount during waiting period if insured becomes totally disabled for at least 180 consecutive days, helping financially catch up from disability impact.
Healthcare Profession Rider:
- Addresses career implications if healthcare professional contracts HIV, hepatitis B, or hepatitis C, potentially prohibiting them from performing duties despite being fully functional. Ensures disability benefits eligibility even without physical disability.
Designed specifically for the following healthcare occupations:
- Chiropodist
- Dental hygienist
- Dentist
- Lab technician
- Medical doctor
- Nurse – LPN, RN, RNA
- Paramedic
- Podiatrist
Own Occupation Rider:
- Ensures benefits if unable to perform specific occupation, regardless of ability to work in another role.
Partial Disability Rider:
- Acknowledges the possibility that individuals may continue to experience partial disability even after returning to work following a total disability, or may have been partially disabled from the outset due to injury or illness. It provides financial assistance to cover expenses during periods of partial disability.
Residual Disability Rider:
- Provides benefits from this rider enhance financial security, bridging gap between pre-disability earnings and earnings during partial or residual disability.
Return-of-Premium (50%) Rider:
- Offers return of up to 50% of yearly eligible premium paid or waived on specified dates if insured person remains non-disabled with minimal claims.