Disability Insurance in Canada
Protecting your Income with Disability Insurance
From age 14 - 44
14 PeoplePer 100 in Society
- Will suffer a disability
- Will suffer major disease
- Will not be able to earn an income
From age 45 - 65
24 PeoplePer 100 in Society
- Will suffer a major medical event
- Become disabled for 90 days
- Will still have to pay bills
From age 65-75
40 PeoplePer 100 in Society
- Will become disabled for 3-6 months
- Will use their retirement savings to fund recovery
- Will put a strain on family income
Disability Insurance – don’t become a liability
There’s an age-old adage that, in the face of the global economic climate, puts many households at risk without them being fully aware of the consequences of being without disability allowance: we live to our means.If this adage is true, and as a common phrase we all recognize immediately suggests it is, what would happen to our livelihood if those means were suddenly halved or, if you’re the only bread winner, eradicated completely through medium- to long-term injury?
Disability Insurance isn’t a luxury, it’s a necessity for a Professional…
According to an article in The Wealthy Barber, there’s a 25% chance that once you get past the age of thirty that you’ll be rendered disabled for a year or more at some point in your working lifetime.That’s a tough statistic to get your head around: if you’re thirty-something or beyond and you’ve not yet taken a year or more off work through disability, there’s a one in four chance that you will.As the article went on to point out, at the time your wage stops coming into your household, you go from being the asset to becoming a liability.
Your family bears the brunt of supporting you while also trying to replicate the income you were responsible for before the disability struck.
Disability doesn’t care how old you are…
For the example above, we used thirty as the yardstick to highlight the chances of you becoming temporarily or permanently disabled somewhere in your working lifetime. But disability is ageless; it can strike anyone, any time and is a far more regular occurrence than premature death.
To tweak that statistic and make it more appropriate for those in their mid-thirties, one in three will take at least one six month period off work between the ages of 35 and 65.
So let me ask you, here and now: what would happen if, Heaven forbid, you were to suffer personal injury through an accident, succumb to mental or physical illness or even learn that you have a degenerative condition that will worsen over time and jeopardize your family’s security?
How would the loss of your income impact you and your dependents? If you’re without disability insurance, the answer has got to be negatively!
What are the benefits of the disability insurance?
Many Canadians undervalue the importance of disability insurance, for two reasons.Our own human nature tells us that disability ‘won’t happen to me’ or we become so self-assured of our longevity that we assume our good health will last our lifetime.
The figures, especially as you get older, certainly don’t stack up in favor of that argument.The second reason is we become so preoccupied with life insurance and what’s going to happen to our loved ones once we’re gone, we tend to dismiss the possibility of them living without our income whilst we’re still here.
Life Insurance is, obviously, an important safety net for our families in the event of our untimely demise. But what happens when we lose our income and we have to find extra medical care costs?If the severity of our disability means that our loved ones have to give up full time work to care for us or specialist help has to be brought in to shoulder some of the physical and emotional burden, how would that impact your family’s lifestyle?Looking at it from that angle, you’d have to say that disability insurance is at least as important as life insurance, if not more so.
Other questions you may want to consider before applying for disability insurance are:
- can we survive on our spouse’s income?
- do we have sufficient savings to live on or set aside for retirement?
- do we have assets or could we consider selling our home to support our disability?
- can we get by on credit for now and pay it back in more fortuitous circumstances?
- would supplementing our entire income with disability insurance be the best option?
Insurances do stack up, no question. But in your portfolio of cover for all eventualities, disability cover deserves its place right there alongside your life insurance policy, no question.Disability knows no age, nor a time. Call us today and we’ll happily provide you with a no obligation disability insurance quote to help reinforce the umbrella that protects you and your love ones against life’s ill winds, no matter how strong they blow.
How do I decide if I need Disability Insurance?
Here’s another interesting snippet. 15% of those who file for bankruptcy do so due to illness or injury.Not all disability affects us that severely, true. And in some instances disabled people are permitted to carry out some type of work.But like disability benefits awarded by the Canadian Government, there are extreme limitations on the amount you’re entitled to earn, irrespective of your capability.The coverage group plans will only run to around 50-60% of your net income, too. When factoring in additional care costs, is half of your salary going to cover your monthly budget?
Choose disability insurance to reflect your needs
A scenario perhaps even worse than having no disability insurance is having a policy for the sake of having one! What’s the point of paying the minimum premium when the remuneration you’re entitled to under your chosen policy doesn’t cover you and your family’s expenses? Very little.
The difference equates to this: ensuring financial security during times of physical difficulty with cover or facing financial ruin as well as trying to overcome your disability without.The combination of the latter two elements, ruin and recovery, will only serve to prolong your rehabilitation period. It’s very difficult to stay focused and positive when you have bills you can’t pay landing on your doormat just as you’re hobbling out of the door on the way to physio to try to recuperate. If, on the other hand, you have adequate disability insurance, the spring in your step comes much more naturally.
You can remain positive about your security, positive about your recovery and, most importantly, use your convalescence to focus on building a future rather than dwelling on ‘what if’s and ‘could-a, should-a, would-a’s. Find out what premium you need to pay today to ensure that your disability insurance covers the worst case scenario and build that payment into the budget it’s there to protect.