What Would You Do If You Became Injured And Unable To Work?
How Would You Supplement Your Income?
Disability insurance is often overlooked when considering insurance coverage, yet it is one of the most crucial forms of protection. Unlike other types of insurance that focus on assets or property, disability insurance safeguards your most valuable asset: your ability to earn an income.
Disability Insurance is designed to provide you with a safety net in case you are unable to work due to injury or illness. Whether the disability is temporary or permanent, it can have a significant impact on your ability to earn an income and maintain your lifestyle. Disability insurance helps bridge the gap by providing you with a portion of your lost income, up to 67%, allowing you to focus on recovery without the added stress of financial worries.
Types Of Coverage
Short-Term Disability (STD)
STD coverage typically provides benefits for a limited duration, such as three to six months, following a disability. This type of coverage helps bridge the gap between the onset of disability and the beginning of long-term disability benefits, or until the individual can return to work.
Long-Term Disability (LTD)
LTD coverage offers benefits for an extended period, often until retirement age, if the insured remains disabled. LTD insurance provides more comprehensive protection for individuals facing prolonged disabilities that prevent them from returning to work for an extended period.
Critical Illness
Critical illness insurance is a type of coverage that provides a lump-sum payment upon diagnosis of a covered critical illness or medical condition. Unlike disability insurance, which replaces lost income when you’re unable to work due to disability, critical illness insurance pays out a lump sum, regardless of whether you’re able to work or not.
What Type Of Coverage, & How Much Of It, Do I Need?
Determining the appropriate level of disability insurance coverage requires careful consideration of various factors. It is always recommended to speak with a broker before making a decision. This is your hard earned income, we want you to be entitled to the right amount in the case of an illness or injury. Although, that doesn’t mean you can’t learn about it yourself!
Factors To Consider:
- Income Replacement: Calculate the percentage of your income that you would need to replace in the event of a disability. This typically ranges from 50% to 70% of your pre-disability income.
- Employer Benefits: Evaluate any disability benefits provided by your employer, including EI benefits, sick leave, short-term disability insurance, or long-term disability coverage. Supplemental disability insurance may be necessary to fill any gaps in coverage.
- Financial Obligations: Consider your ongoing financial obligations, such as mortgage or rent payments, utilities, groceries, and other living expenses. Disability insurance should provide enough coverage to meet these expenses while you’re unable to work.
- Health and Lifestyle Factors: Assess your overall health, lifestyle habits, and risk factors for disability. Individuals with pre-existing medical conditions or hazardous occupations may require additional coverage to mitigate risks effectively.
- Income Replacement: Calculate the percentage of your income that you would need to replace in the event of a disability. This typically ranges from 50% to 70% of your pre-disability income.
- Financial Obligations: Consider your ongoing financial obligations, such as mortgage or rent payments, utilities, groceries, and other living expenses. Disability insurance should provide enough coverage to meet these expenses while you’re unable to work.
- Employer Benefits: Evaluate any disability benefits provided by your employer, including EI benefits, sick leave, short-term disability insurance, or long-term disability coverage. Supplemental disability insurance may be necessary to fill any gaps in coverage.
- Health and Lifestyle Factors: Assess your overall health, lifestyle habits, and risk factors for disability. Individuals with pre-existing medical conditions or hazardous occupations may require additional coverage to mitigate risks effectively.
- Income Replacement: Calculate the percentage of your income that you would need to replace in the event of a disability. This typically ranges from 50% to 70% of your pre-disability income.
- Financial Obligations: Consider your ongoing financial obligations, such as mortgage or rent payments, utilities, groceries, and other living expenses. Disability insurance should provide enough coverage to meet these expenses while you’re unable to work.
- Employer Benefits: Evaluate any disability benefits provided by your employer, including sick leave, short-term disability insurance, or long-term disability coverage. Supplemental disability insurance may be necessary to fill any gaps in coverage.
- Health and Lifestyle Factors: Assess your overall health, lifestyle habits, and risk factors for disability. Individuals with pre-existing medical conditions or hazardous occupations may require additional coverage to mitigate risks effectively.
Additional Coverage Options
Some providers offer additional coverage options, know as “riders”. Prices of these riders can vary.
- Rehabilitation Benefits: Some disability insurance policies offer rehabilitation benefits to help policyholders return to work by covering the costs of vocational training, job placement services, or adaptive equipment.
- Survivor Benefits: In the unfortunate event of a policyholder’s death while receiving disability benefits, survivor benefits may be available to provide continued financial support to eligible dependents.
- Cost-of-Living Adjustments: To address inflation and rising living expenses, certain disability insurance policies offer cost-of-living adjustments (COLA), ensuring that disability benefits keep pace with the increasing cost of goods and services over time.
- Rehabilitation Benefits: Some disability insurance policies offer rehabilitation benefits to help policyholders return to work by covering the costs of vocational training, job placement services, or adaptive equipment.
- Survivor Benefits: In the unfortunate event of a policyholder’s death while receiving disability benefits, survivor benefits may be available to provide continued financial support to eligible dependents.
- Cost-of-Living Adjustments: To address inflation and rising living expenses, certain disability insurance policies offer cost-of-living adjustments (COLA), ensuring that disability benefits keep pace with the increasing cost of goods and services over time.
Rehabilitation Benefits
Some disability insurance policies offer rehabilitation benefits to help policyholders return to work by covering the costs of vocational training, job placement services, or adaptive equipment.
Survivor Benefits
In the unfortunate event of a policyholder’s death while receiving disability benefits, survivor benefits may be available to provide continued financial support to eligible dependents.
Cost-of-Living Adjustments
To address inflation and rising living expenses, certain disability insurance policies offer cost-of-living adjustments (COLA), ensuring that disability benefits keep pace with the increasing cost of goods and services over time.
Enjoy the peace of mind that comes from knowing you’re protected against life’s uncertainties.
At Barnett & Associates, we are committed to helping you navigate the complexities of disability insurance and finding the right coverage solution for your needs. Our experienced insurance brokers will guide you through the process, offering personalized advice and recommendations tailored to your unique circumstances.
