Disability Insurance: How Does the Future Income Option Work?

disability insurance
Disability insurance is available to young
entrepreneurs without a medical exam.

Disability insurance along with life insurance forms the foundation of a solid financial plan.

But what about young entrepreneurs? In 2012, more than half a million people told CIBC that they had started their own business in a poll. According to theToronto Star, researchers at the Organization for Economic Cooperation and Development found that among all new enterprises that survived after three years, the highest employment growth was in companies started by people under 30. 

How can these young entrepreneurs properly insure themselves? Disability insurance allows you to replace a percentage of your current income if you become sick or injured, but what about your future income?

That's where a future income option rider can come into place. Most insurance companies allow you to add this option as a rider at a very nominal cost. RBC Insurance, for example, allows its highest qualifying applicants to have a future income option for as much as $25,000 per month. This can be a huge advantage for entrepreneurs or other young professionals who want to have the ability to upgrade their coverage in the future without a medical exam. The future income option allows the insured to get additional coverage without any medical requirements. The policy only requires financial underwriting.

For example, let's look at the owner of a technology company. He's working 60 to 70 hours a week, hoping to get his company going. Finally, his company starts to bring in big money and the owner wants to upgrade his disability coverage to reflect his increase in income. However, the long hours have already placed a toll on his health, so increasing his disability insurance might be a challenge. But this won't be the case if you have the future income option because the insured on this option can bypass any medical requirements.

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For more details on disability insurance in Canada, please contact us at 1-866-899-4849 or visit our Disability Insurance Quote Page.

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