What is Disability Insurance?

By Candian LIC, April 16, 2021, 8 Minutes

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When you are the one who provides for a family, you probably wonder what would happen if you ever were injured and unable to work. This could be the insurance policy you are looking for. Disability Insurance can be very helpful if you need financial security during times of injury and healing.

What is Disability Insurance?

Disability insurance is an insurance policy, also known as Disability Income Insurance or Income Protection Insurance. Disability Insurance is designed to assist you and your family in being financially secure if you are ever injured or disabled. Disability insurance provides income replacement until you are healed enough to go back to work. It replaces a portion of your paycheque using a percentage of your usual income. The disability can be caused by either accident or illness. You and your loved ones will get assistance from the insurance payments until you can work again, or until the coverage term ends. You can work your policy so your payments come weekly or monthly.

Why Get Disability Insurance?

Anyone who is the sole provider of income, or If you have a regular income, you should consider getting disability insurance. Almost everyone has rent or mortgage to pay or support immediate or extended family members. You need to have coverage if you sustain an injury or get an illness that prevents you from working.

Several factors affect the cost of Disability Insurance. Benefits and premiums are affected by the following factors: gender, age, family health history, physical condition, and occupation. If you have other coverage, Disability Insurance payments may be reduced to offset the other benefits.

What Does Disability Insurance Cover?

There are many reasons to have disability insurance, accident, or illness.

Four Types of Disability Insurance

  • Own occupation means you are unable to perform duties of your own job
  • Any occupation is set up so benefits can only be paid if you are unable to do any part of the job for which you are trained and qualified.
  • Short-term disability insurance gives coverage for up to two years or for temporary issues and injuries. This is the type of insurance you should get when you recover and go back to work.
  • Long Term is where the insurance provides benefits and coverage for long-standing issues or injuries that will last months to years, or until you reach 65 years of age.

This insurance will make sure you will not lose income due to your inability to work, allowing you the time you need to get back on your feet. You will be able to pay bills, buy food, and cover household expenses.

Take care of your finances with disability insurance

If an accident has temporarily or permanently kept you from working, you can receive a tax-free monthly benefit if you have disability insurance coverage. This plan helps pay your monthly expenses. You also have the freedom to personalize your disability insurance coverage by adding extra benefits at a cost.

How does disability insurance coverage work?

Now that we know what disability insurance coverage is let us understand how this insurance policy works. In the unfortunate event, you become disabled; you must file a disability claim. After the filing is complete, you have to wait for the claim to be approved. Once approved, there is a waiting period; the waiting period is the start date of the benefit, including the number of days from the date you became disabled. This waiting period can be anywhere from 30 days to a year. Your monthly benefit would begin after the waiting period has been achieved.

Types of disability insurance:

  • Short-term disability insurance If you are suffering from an illness or injury, the coverage is provided for up to six months. Additionally, the waiting period is typically shorter than long-term disability.
  • Long-term disability insurance Sometimes life does not go according to plan; a severe injury or illness can prevent you from working for a prolonged period or permanently. A long-term disability plan protects you and your loved ones financially.

Reasons to purchase disability insurance:

  • Tax-free benefit If your company provides disability insurance, you usually don’t pay for it. The amount that you receive is tax-free, as you have already paid taxes on it.
  • Regular option coverage and occupation option coverage Disability insurance often comes with two types of coverage, regular coverage and occupation coverage. When you opt for occupation coverage, you are covered if you can no longer perform the job, you were doing when you got sick or injured. If you believe you can do any job for a regular occupation, you will not need much help with your bills.

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Significant impact on your finances

Have you considered what would happen to you and your family if you became sick or had a workplace accident? This is where disability Insurance comes into the picture. This type of coverage can get you some amount to help you and your family cover expenses in the event of your inability to work. Many individuals do not understand what a disability insurance policy offers; before purchasing a disability insurance coverage, you must:

  • Identify if you need short-term or long-term disability coverage.
  • Find out how much of my salary the disability insurance coverage covers.
  • Know if the insurance is covering my job.

Are you the sole income earner for your family? Do your parents depend on your income? If the answer is yes, you need to purchase a disability insurance policy. The unpredictability of life is petrifying, as one unfortunate event can leave you and your loved ones financially unstable. If you cannot work due to a severe injury or illness, owning disability insurance can help pay for expenses like utilities, school tuition, mortgage, food, and car payments. This insurance plan replaces a portion of your income if you are unable to carry out your work. Back injuries, heart diseases, and cancer are the majority of long-term disability claims.

Contact our expert insurance advisors today!

Don`t take a chance on life and own disability insurance coverage today. At Canadian LIC, our professional insurance advisors are experienced and have the patience to explain thoroughly why disability insurance is essential. To find out more details or to schedule a consultation, call us at 416 543 9000 today. We will be more than happy to address your queries.

Things To Know About Disability Insurance

If you have ever found yourself wondering what you would do if you became injured and unable to work, you may want to take a look at Disability Insurance. This is a great policy if you want to have peace of mind for your and your family’s future.

Get The Best Insurance Quote From Canadian L.I.C

Call 1 844-542-4678 to speak to our advisors.

Get Quote Now

What is Disability Insurance?

Disability Insurance is a policy for you and your loved ones to be protected financially if you are disabled. Disability can be from illness or injury. The insurance provides income replacement until you are able to go back to work, if possible. It supplements your paycheque by using a percentage of your income.

Why should I get it?

If you have a family or other financial obligations like a mortgage or rent, you will want to have financial security if you are suddenly unable to work due to illness or injury.

Factors that Affect the Cost of Disability Insurance

  • Smoking: This is often the cause of paying higher premiums for disability insurance. If you don’t smoke, you have more chances to get affordable premiums and other health benefits.
  • Age: This is a major cost-determining factor. The younger you are the more you get the policy, the less costly it will be. There is less of a chance of becoming disabled while you are young.
  • Occupation: A skilled tradesman or manual labourer will have a higher cost for disability insurance than a person with a desk job having a high income.
  • Health: If you are healthy, with no critical illness, you will pay a low cost for disability insurance.

Types of Disability Insurance

Own Occupation: Benefits paid if you can’t perform complete duties of your own position at your job full time.

Any Occupation: Benefits paid if you are not able to do any part of the position or job for which you qualified.

Long Term: Benefits paid for disability issues that will last anywhere from a month to years, or the policyholder is 65-years-old.

Short Term: Benefits paid for temporary issues or those that last for up to two years. These are issues you will recover from and will be able to go back to work.

Having Disability Insurance is just another way of taking care of your family. Ask your insurance broker for more information on Disability Insurance today.

Do I really need a disability insurance?

Our team at Canadian LIC can help with the paperwork, all you have to do is apply. We will provide you with all details and you can choose a suitable plan. Contact us and schedule an appointment today. We look forward to seeing you.

Generally, if your employer has group employee disability insurance, then you won’t have to worry about applying for a new one. You can reap the benefits. (We advise you to check the benefits for the existing plan that you’re part of). If you want to shop around, you should know a bit about disability insurance.

There are two types; the first is short-term disability insurance, here the coverage is up to 6 months when you’re sick or injured. It is the general type of disability insurance that employers offer but depending on the employer it can be different. If are not a part of a short term disability insurance then you may be eligible for Employment Insurance (EI) sickness benefits with the requirements being:

  • When you have used all of your sick leaves
  • You have worked enough hours

The second type of disability insurance is long-term disability insurance which offers coverage of up to 2 years. It also replaces 60-70% of your normal income. It should be noted that the benefits of short-term disability insurance are not included in this type of plan.

How does disability insurance work?

Here’s a summary of how disability insurance works. It will give you a better idea of the entire process. Please have a look:

  • Choose the amount you want. You can also add optional benefits to customize your coverage policy
  • Pay your monthly insurance premiums
  • If you have become disabled, then file a claim
  • Once the formalities are completed, you will receive your monthly payments (once the waiting period ends). The waiting period can be explained as the number of days from the date you’re disabled until the benefits start date.
  • Your monthly payments stop when you return to work or your benefit period ends

Your monthly benefit would be approximately 2/3 rd of your income (this is with respect to your gross employment). The waiting period is for 10 days and the benefits that you get are completely tax-free. We can customize your insurance plan to meet your requirements. Call Canadian LIC today and speak with our team members, we will be glad to assist you.

Eligibility for the Canada Education Savings Grant

  • In order to be eligible for the grant, parents or grandparents must contribute to a child’s RESP prior to the end of the calendar year in which the child turns 15 years
  • The child must be a Canadian resident
  • It is important the child must have a valid Social Insurance Number
  • There must be a RESP account in the child’s name
  • It is important that you request the government for the matching contributions

The Government of Canada helps and contributes towards your effort to save. It deposits substantial grants directly into your RESP.

How Disability insurance can help you out during unemployment?

Benefits of opting for disability insurance

  • Disability insurance will help you provide your family with financial security if you are unable to work due to an accident or illness.
  • Disability insurance will help you cover most of your expenses
  • It replaces a part of your income when you are unable to work
  • It also reduces your burden and also helps you save on taxes

Providing you the financial security when you need it the most
Accidents and illness are unfortunate and can happen to any of us. It is always best to stay financially secure and safe at all times by investing in the right disability insurance. You can choose from a range of disability insurance. Most of the disability insurances provides cover for senses and speech issues, such as vision and hearing loss, asthma, neurological disorders, mental disorders, depression and anxiety. For more information about how disability insurance can help you or to invest in a disability plan, please get in touch with us now. Our team is here to help you with all your requirements.

Long-term disability insurance
Long-term disability insurance provides cover in the event of an accident or a fall. It does not provide insurance for work-related accidents that are covered by workers’ compensation insurance. Long-term disability insurance ensures that an employee receives a part of their income if they cannot work due to a disabling injury.

The above information is only meant to be informative. It comes from Canadian LIC’s own opinions, which can change at any time. This material is not meant to be financial or legal advice, and it should not be interpreted as such. If someone decides to act on the information on this page, Canadian LIC is not responsible for what happens. Every attempt is made to provide accurate and up-to-date information on Canadian LIC. Some of the terms, conditions, limitations, exclusions, termination, and other parts of the policies mentioned above may not be included, which may be important to the policy choice. For full details, please refer to the actual policy documents. If there is any disagreement, the language in the actual policy documents will be used. All rights reserved.

Please let us know if there is anything that should be updated, removed, or corrected from this article. Send an email to Contact@canadianlic.com or Info@canadianlic.com