Disability Insurance

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Statistics show that workers between the ages of 35 and 65 are many times more likely to become disabled for an extended period than they are to die.  For example, for a 45-year-old female the probability of becoming disabled before age 65 is 31%, her probability of being stricken with a critical illness is 17% and her probability of dying before age 65 is 4%*   Try this calculator to find out your risk of disability between now and your age 65. 

Many Canadians have disability insurance through their employers.  Disability insurance provides a replacement income in the event of a serious illness or injury during your working years.  However, disability coverage has limitations and doesn't cover all eventualities.  It doesn't replace your full income but only a portion of it.  Depending on the type of coverage, you may qualify for benefits for only a limited time.  And coverage usually stops at age 65. After you retire, you might no longer be insured.  Self-employed people or people working in small businesses often have no disability insurance. What would happen to you financially if you were to become unable to work?

For those who have disability insurance through work, we suggest that you review your benefits booklet with your Human Resources department to find out just what your disability coverage is. Most people do not know how much income replacement coverage their disability coverage gives them, nor how long they have to wait to collect it, nor how long it will last if they are disabled for an extended time.  Individual disability policies can be purchased from a licensed Life and Health Insurance Broker to provide or supplement disability insurance. 

Here's a summary of the key features of disability insurance:
Waiting period

Generally between 30 and 180 days for disability insurance;  

A pre-set percentage of income, paid monthly for disability, usually for a limited time;

Disability benefits are taxable to employees if they are funded by their employers, and tax-free if self-funded.  
Coverage period

Usually to age 65 or until retirement for disability; 
With our professional advice, you can design a comprehensive package to provide income, cover extra costs, and still allow your family to build toward important savings goals. 

*Source: InsureRight

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