Disability Insurance and Critical Illness
Many risks impact your livelihood, which is why disability and Critical Illness insurance are important products to invest in. Disability insurance protects you from loss of income if you develop a long-term illness or serious injury. Critical illness provides a lump sum payment to use at your own discretion if you contract a major life threatening illness.
How Does Disability Insurance Work?
Nobody plans to get sick or injured, but sometimes life brings the unexpected. Disability insurance offers a financial buffer while you are unable to work and earn income. There are varying degrees of disability insurance, but you will see payment of 60-80 % of your regular income on average.
There are two main types of disability insurance, these are:
- Short Term Disability Insurance – Temporary or short-term disability insurance is designed to help you financially while you recuperate. It is under the assumption that your disability is a short-term problem, which will eventually be resolved so you can return to your job.
- Long Term Disability Insurance – Permanent or long-term disability insurance may not provide compensation permanently but is designed for disabilities that are long-term in duration. If you have a spinal cord injury, for example, which will keep you from working permanently, you would require long term disability coverage.
What is considered a Disability?
Generally, a disability is anything that prevents you from performing your own job. It can be physical or cognitive in nature and is usually caused by injury or illness.
Some examples of disabilities covered in long term disability insurance include:
- Cognitive or Neurological Conditions
- Loss of Hearing
- Loss of Vision
- Limited Mobility
Short-Term Disability Insurance
A short-term disability is anything that will prevent you from attending work regularly for up to 6-months. It can include physical and mental illness or injury.
Short-term disability insurance is important because while many employers offer short-term disability leave, it is not always compensated. This leaves you unpaid while you are unable to work.
In Canada, we also have access to EI Sickness Benefits, a claim processed through Services Canada and your Employment Insurance. This claim requires a set number of hours worked before you can apply.
Long-Term Disability Insurance
Long-term disability insurance typically follows the short-term disability period. In most cases, however, you would use sick leave through your company, work with your Canada Employment Insurance benefits, file a short-term disability insurance claim, and finally reach the point of a long-term disability insurance claim.
Long-term disability insurance will have a waiting period and is usually offered from 2 years to age 65, replacing your income up to 85%, depending on the type of policy.
Disability Insurance FAQs
Working for so many years within the insurance industry, we have seen and heard it all. To better help our clients understand disability insurance, we have compiled a small list of frequently asked disability insurance questions.
Critical Illness insurance offers the financial help to pay the costs associated with a life-altering illnesses. If you become sick with an illness covered by your policy and survive the waiting period, you’ll receive a lump-sum cash payment. You decide how to spend the money.
- Reduce debt and other financial concerns while you cope with your illness
- Replace any reduced or lost income for you and your spouse, who may wish to take time off work to care for you
- Bring in additional help at home for you and your family
- Consider new medical treatments and medications not covered by private or government health insurance plans
Critical Illness FAQs
Contact: The Standard Financial Advantage for a Disability and/or Critical Illness Insurance Quote Today
The Standard Financial Advantage can help you find the right policy for your individual needs.
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