It is easy for a person to take their well-being for granted. So in today’s turbulent economy, purchasing a disability insurance plan can seem like an unnecessary expense. However, according to the Canadian Life and Health Insurance Association Inc. (CLHIA), one-third of all Canadians will experience a debilitating injury or illness before the age of 64. In fact, that injury or illness could prevent that person from earning their regular income for many weeks, months, or even years.
Imagine the financial devastation that can follow that kind of income loss. Now consider that there is a simple solution that can limit the damage from this potential financial disruption. An accredited insurance broker will help an applicant find the best disability insurance plans in Canada and help to build an insurance portfolio that will protect the applicant’s family, investments, and future.
According to Vancouver-based insurance broker Tim Doubroff, disability insurance is necessary for “the same reasons that auto insurance is necessary.” He explains, “Disability insurance addresses the ‘just-in-case’ scenario.” For example, no one plans on having a car accident. Automobile insurance is purchased to protect a person in the event of an accident. In other words, automobile insurance is purchased “just in case.”
When looking for the best disability insurance plans in Canada, the same “just-in-case” scenario should apply. However, Doubroff suggests that no matter how strong the need for disability insurance might be, a person’s budget is always his first consideration. In fact, according to Doubroff, the proper disability plan will provide cost-effective coverage, with the most benefit going to “the person who could become disabled, while also potentially protecting anyone else who is dependent on that person’s income. This includes spouses, partners, children, business partners, or investors.”
Before Buying Disability Insurance Plans in Canada
Many of the best disability insurance plans in Canada will offer the same types of plans, but each one comes at a cost. So it is important that an applicant understands what their needs and obligations will be in the event of a disability and build an insurance plan that can meet those needs.
Most disability plans fall into two categories:
Injury-only Disability Plan: Injury-only disability plans pay benefits only when the insured has been disabled by a physical injury. Any disabilities that are caused by an illness are excluded under this plan. There are some advantages to an injury-only plan. Because there are fewer injury claims than illness claims each year, the premium for an injury-only disability plan tends to be more economical. Another advantage is that the medical underwriting for this type of insurance is less invasive. This can make an injury-only plan the best disability insurance plan in Canada for hard-to-insure applicants.
Injury and Illness Disability Plan: An injury and illness disability plan will cover disabilities caused by an injury or an illness. The medical underwriting on this type of plan is often more intense and requires full medical disclosure from the applicant. According to Doubroff, because disabilities due to illness are the most common type of claim, the premiums for this type of disability insurance can be higher than for an injury-only policy. However, an injury and illness disability plan would be the best disability insurance plan in Canada for an applicant who wants disability coverage with fewer limitations.
There Are Other Factors to Consider
Obviously, no matter which type of coverage an applicant chooses, disability insurance premiums will differ between insurance companies. There are also other factors to consider when looking for the best disability insurance plans in Canada.
Own Occupation versus Any Occupation: “Own occupation” and “any occupation” are important considerations to investigate when looking for the best disability insurance plans in Canada. When an insured chooses a plan with “own occupation” coverage, they are guaranteeing that they will be covered for any disability that prevents them from doing their own “specific” job. Also, according to Doubroff, the “own occupation plan may also pay out full benefits, while allowing the disabled person to pursue gainful employment in another field of work.”
A disability insurance plan with “any occupation” coverage will only pay out the benefits if the insured is disabled and cannot do any type of job. For example, if the insured is employed as a chef but has a hand injury that prevents them from doing that job, their “any occupation” insurance plan will eventually discontinue their benefits and require them to look for work in another field.
By having a clear understanding of the occupation clauses, applicants can feel confident in their ability to find the best disability insurance plans in Canada.
Return of Premium Rider: The return of premium rider (ROP) is an added coverage that can be found in some of the best disability insurance plans in Canada. With an ROP, if no claims have been made against the policy within a pre-determined timeframe, the insured will be awarded the return of a certain percentage of the paid premiums. “The advantage,” Doubroff says, “is that the awarded ROP can be a substantial amount, and over time, it will have drastically reduced the actual cost of the disability insurance policy.” However, an ROP rider will increase the cost of the monthly premiums, and actually places part of the risk back onto the insured.
For applicants interested in finding the best disability insurance plans in Canada, Doubroff suggests that their best bet is to meet with an insurance broker to discuss all the available options. An independent insurance broker can assess each individual situation to provide quotes for coverage that will meet each applicant’s needs and budget.
Tim Doubroff has dedicated the last 13 years to helping people understand how life, health, and disability insurance can protect their future. His compassion and his ability to help his clients prepare for tough situations are the cornerstones of his success.
For more details on disability insurance in Canada, please contact LSM Insurance at 1-866-899-4849 or visit our disability insurance instant quote page.