Do you need disability insurance if you already have critical illness insurance?
Disability insurance and Critical illness insurance might have some similarities; however, they have different purposes and are distinct. Statistics released by the Canadian Cancer Society show that there is a 50% chance for Canadians to develop cancer over their lifetime; of these, 60% will survive at least five years. When it comes to disabilities, Stats Canada indicates that disabilities that last for three months or longer can affect at least 50% of those aged 35. Sometimes these disabilities can last for years.
Understanding the difference between critical illness and disability is paramount to understanding why these two different types of insurance are essential to Canadians. Your health is important, and perhaps your biggest asset and enjoyment of all the things you have worked hard to achieve, rely heavily on being appropriately insured.
Even though Canada has a sound health system that ensures you have medical care when needed, illness or disability will prevent you from earning an income. The consequences of this can be devastating to you, your family, and the lifestyle you build.
Critical illness insurance explained.
Depending on the plan you choose, critical illness insurance can cover cancer, heart attack, and stroke. CI can also be more comprehensive and cover more illnesses.
These plans are meant to cover your financial needs as you recover from an illness, and they pay a tax-free lump sum if you develop one of the illnesses specified in your policy. The amount of money is paid out to you even if you can earn an income, and you can use the benefits in any way you choose.
Policies can be structured in various ways so that they can be converted from term to permanent without a medical questionnaire, or that you get a full refund of paid premiums if you have never made a claim.
The benefits of a critical illness policy are paid out after 30 days of diagnosis (you must survive 30 days in Critical illness, this is called a survival period) in a tax-free lump sum. Critical illness insurance is beneficial for paying your mortgage, household bills, and medical expenses during your illness and recovery. Therefore, you will have peace of mind, and you can focus only on your health and healing.
Disability Insurance explained.
Disability insurance protects your ability to earn a monthly income. It pays you a portion of your gross declared income (usually 60-70%) if you cannot work because of a disability or an illness. According to the type of policy chosen, there are different definitions of what a disability benefit constitutes. Common disabilities that result in long-term disability (LTD) claims are injuries, mental health disorders, musculoskeletal disorders, heart disease, and cancer.
An employee benefit plan may provide coverage for LTD, but you can also purchase an individual policy. Often people who feel they are under-insured by an existing group or disability plan supplement it with a “top-up” policy. Additional benefits can be provided by riders so that the disability benefit can increase with inflation. An increased coverage can also be an option in the future without a medical exam, and they can offer occupational protection for health professionals.
With long-term disability insurance (LTD) policies, the benefits are paid monthly for the pre-established period or until the insured reaches 65. Usually, the monthly benefit is subject to an elimination period, which depends on the policy. The benefits cease when work is resumed, but in some policies, partial benefits are paid if the policyholder resumes with a part-time job.
Some individual policies may also cover job loss or early retirement. With Disability insurance, you can choose both on work and off work injuries, and illnesses and the benefits can start immediately. However, you must ensure that the benefit amount you are applying for is consistent with the income you are making since, at the time of claim, the insurance company will ask you for proof of income.
How disability insurance and critical illness insurance can work together
If you are diagnosed with a critical illness and can still work, you may not qualify for your disability insurance benefits. If you are unable to work for a few months because of an injury and only have critical illness insurance, you won’t have an income while you can’t work.
Therefore, both disability insurance and critical illness insurance are necessary protection plans that complement each other well, giving you peace of mind if you cannot support your family because of an illness or injury. For most of us, our biggest asset is our ability to earn income, so we must protect and ensure it above all else.
AplusWealth is here to help you to protect your income and obtain the right Disability insurance.
Finding the right disability insurance policy with the proper policy structure at the right price is complicated and overwhelming.
Our licensed financial advisers are fully qualified to help you find the disability insurance policy that adequately protects your income by taking your age, occupation, liabilities, and financial goals into consideration. At Apluswealth, you can get a quote, compare quotes, and find the disability insurance quotes that comfort you.
Contact our expert advisers today and find out which is the best disability
insurance for you. Our disability insurance advisors will provide you with quotations and the most appropriate policy types.
The purchasing disability insurance process from Apluswealth is designed to be straightforward, online, and fast. If you know what type and amount of coverage you are looking to get, use our get a quote software and click apply online. However, if you require assistance from our expert advisors, we will set up an online or in-person meeting with you to review your needs analysis and help you make a decision.
Start protecting your income today.
Email: Contact@apluswealth.com
Tel: 1-888-461-6120