When you cannot work, disability insurance works for you. Besides being tax free, disability payments help protect your savings when you cannot earn a living.
When buying a disability plan, consider:-
Benefit Amount – The monthly amount that can be paid out after a claim is called the benefit amount.
Payout Period or Benefit Period – The number of years the disability payments will continue is called the Benefit Period.
Waiting Period – The waiting period is usually the time to receive the first payment after making a claim.
How much disability insurance or benefit amount does you need?
We can determine the benefit amount we need based on our expenses, income, and future needs. We need to cover 60 to 80 percent of our income, and can add a total disability payout for the future needs.
Plans with the smaller disability benefit amounts are comparatively cheaper.
Insurance companies pay based on the taxable income, so buy accordingly. We are here to assist you with your disability insurance needs. We assess your needs and shop around for the best options.
How long is the Disability Benefit Period we need?
Plans are usually available for two years, five years, and up to age 65. The premium of disability insurance depends on the payout period or benefit period, it is cheaper with a short payout period or benefit period.
Although we cannot predict, but we can plan, according to the:-
Risk at job – I will consider long-term disability payout periods if working in a hazardous environment, such as a truck driver or construction worker. A long-term disability payout is more expensive than a short-term disability payout, since it exposed the insurer to a longer-term risk.
You must also consider your health and the way you live your daily life, for example, if you cannot exercise and work a sedentary job.
According to a survey, 90% of disabilities are because of illnesses, so long-term disability plans are better.
What is the disability waiting period?
Waiting between an incident and the first payout is called the wait period. There are three common waiting periods: 0 days, 30 days, and 112 days. A plan with longer waiting periods is comparatively cheaper.
Experts can answer questions about the waiting period, such as why we need minimum waiting periods, when we need longer waiting periods?
What is the cost of disability insurance?
It depends on the following factors.
Coverage Amount – How much coverage you are applying for? It is important to note that you can only receive a disability benefit based on earnings.
The duration of benefit – This is also called the benefit period. Which is for how long should disability benefits last, 2 years, 5 years, or until retirement age?
Waiting time – When the benefits or disability payments start, after 0, 30 or 112 days. If you have employment insurance, choose 112 days, because EI pays you for 112 days in case of disability claim.
Age – Disability insurance is usually cheaper for younger ages.
Health – Disability insurance is cheap for the affluent.
Work – Another factor determining disability premium is the nature of your occupation. Risky jobs are more expensive.
How much disability insurance benefits will I get?
A typical insurance company pays up to 80% of your income, so buy it according to your income.
The following table shows income and potential benefits. There are some government disability options available, such as CPP and DCPP, but the qualifying criteria are very restrictive, and the maximum benefit is less than $1500.
Riders on Disability Insurance.
A rider is an add-on with the plan, a disability plan can have the following riders.
Waiver of premium – When an event triggers a waiver of premium, the insurer waives the premium. When you are disabled, they stop collecting the premiums.
Return of premium – If no claim is filed until the maturity date, the insurer can return the premium.
Total disability benefit – The insurer pays an additional benefit in case of total disability.
Disability insurance in a package.
Special packages are available for truckers, construction workers, and other high-risk occupations. We can combine disability insurance with emergency medical coverage for truckers and with sickness coverage for chemical factory workers.
Group disability insurance vs. individual disability insurance
Plan might end when you leave your job – Could be yearly renewable.
Same plan for all members of the group – Individual
Plan will be with you anywhere – Premium remains the same always.
A customised plan according to you – Individual disability insurance premiums remain the same, although most group insurance plans have variable premiums.
There is no choice in group disability plans. You must take what the group offers. You can only choose options in an individual plan – Group plans are comparatively cheaper than individual disability insurance plans.
For truckers, we offer insurance packages, such as disability insurance with life insurance or disability insurance with travel insurance. Talk to our advisor today and protect yourself.
Disability coverage is available for short-term, long-term, and permanent disabilities.