Protecting your income with disability insurance

Disability insurance is meant to replace your regular income so that you and your family can be protected if you are unable to earn an income because of an accident or sudden illness. Even though many employers do offer disability pensions, those that are self-employed or have no cover opt for private cover. Typically, insurance companies replace 60% to 85% of your regular income and this is continued until you can go back to work, or until the period of the coverage expires.   Disability insurance won’t only cover you for physical ailments and accidents. According to statistics, in Canada, the four top disability claims are for mental illness, poisoning, injuries, and musculoskeletal problems.

How much disability insurance needed

Your insurance broker will work out the maximum coverage for your disability insurance according to your age, occupation, and income. They also need to take any other disability pensions offered to you into consideration because these coordinate with the one you take out. This means that you will not get paid out more than the maximum eligibility for your income no matter how many policies you have, so there is no need to overpay.  Depending on your income the disability insurance can cover a qualified professional ranging from $500 to $25,000 per month. Depending on the type of disability policy, any payout will be if you can’t perform a job in your occupation. However, if your disability is partial and your condition allows you to work part-time, some policies will pay a portion of the benefit. On the other hand, some policies will only pay if you can’t work at all.

The differences between short-term and long-term disability insurance

Short-term disability insurance

With short-term disability coverage you will receive benefits for 6 to 12 months while injured or sick; depending on your coverage. The benefits are paid out from the moment you use up your sick leave and it typically replaces 60% to 70% of your basic income. It frequently covers the period before a long-term disability cover kicks in.

Long-term disability insurance

More persistent injuries and health issues are protected with long-term disability insurance. Starting from when the short-term coverage ends, the long-term coverage will continue if the disability continues, the benefits end or retirement age is reached. They typically replace 40% to 60% of your basic income. These are usually purchased by people who want to supplement the disability insurance provided by their employers.

Medical requirements for getting disability insurance

Some pre-existing conditions may not be covered when applying for disability insurance, but won’t necessarily disqualify you. These may be excluded permanently, but are also sometimes re-evaluated after a certain period and if there is no degeneration or recurrence of the condition may be reinstated. Therefore, for people who have one condition but can still perform the duties of their occupation, you can get disability cover for other unrelated conditions. This cover will not include any complications from the existing conditions.

Disability insurance coverage according to your occupation

Yes, you have guessed this correctly, your occupation will affect your premium payments. The more likely you are to get injured in your job, the higher the premiums will be, typically the lowest premiums are for individuals with a routine office job.  Disability insurance generally costs 1% to 3% of your annual income and these premiums or payments can either be made monthly, quarterly or annually. High-income professionals that don’t leave their office much will have a lower premium than a skilled tradesman or manual labourer. Moreover, the younger you are when you start paying disability cover, the lower your premiums will be. Other factors that will affect your premiums are your smoking status. The three different types of disability insurances that you can choose from are:

Own-Occupation

There is a generous occupation definition and you will receive benefits if you cannot work in your pre-injury occupation. If you can work in another occupation or another capacity you will continue to receive benefits and these policies are usually for highly trained professionals.

Regular-occupation

This protects your ability to work in your pre-injury occupation or a similar one that fits your education level. You will not get benefits if you take up another job that is not like your pre-injury position.

Any-Occupation

With this type of policy, you may be ineligible to receive any benefits if you can work in any other job. These policies have the lowest premiums.   There are a lot of Canadian insurers in the field of disability and each has different plans. We often find that applicants become confused with how to structure the payout of their disability policy to get the best premium rate. Apluswealth has highly experienced disability insurance agents that carefully study the condition of each client and devise a plan that will provide the best possible coverage for the client. AplusWealth Inc., is proud to introduce Get covered, where you can calculate your needs for disability insurance and get quotes online. You can also contact us to speak with one of our advisors and get a no-obligation quotation for the disability insurance coverage that is right for you. Contact@AplusWealth.com Tel: +1-888-461-6120