Andrew McKeown | Insurance Consultant, Great-West Life
Insurance Consultant, Great-West Life
1. What type of disability insurance do you own?
I own a Non-Cancellable Great-West Life Professional Disability Plan.
2. What factors did you consider when determining the coverage amount?
I didn’t want to buy a crap plan that I was sure wouldn’t pay. Insurance is expensive enough, why would you cut costs on something as important as disability insurance. It’s like buying a sausage from the cheapest vendor, you’re just asking for trouble.
In terms of benefits, I bought the most I could, as there really is a hard cap on how much you can buy. You can only buy as much income as you make, really easy math.
3. Do you think people underestimate the importance of disability insurance, and if so, why?
Yes, because most don’t understand what being disabled means. I really wish they started calling this income insurance or paycheque protection. It means you can’t work for whatever reason. I think the term disability really throws a lot of people off what it actually is.
Also most people think they are protected at work. But, I’ve gone through Group Long-Term Disability contracts for clients and they are a bottomless hole, there are so many exclusions where they won’t pay. Some plans still won’t pay for anything but salary. Imagine you are in sales making a small salary and a large bonus, you can’t work and they only pay you a small salary. What a catastrophic loss for that person, but proper disability insurance planning would have resolved that.
I just think that most people think of it as a checked box, “do you have disability”, “yes” they can answer. They don’t realize that the question should be, “Do you have enough disability insurance and do you have the right kind for you.” Lots of high income earners are walking around thinking they have good coverage; little do they know they’re nearly naked. We are constantly topping up an individual disability plan to complement the coverage they have with their group.
It’s funny that the #1 market for individual disability coverage is doctors; we have something like 85% market share into an individual plan. I haven’t seen a doctor who says, “No I have great coverage through my group.” That would never happen.
4. What are some limitations or exclusions people should watch out for?
I think if you can afford it, you should only be purchasing non-cancellable disability insurance, unless: you can’t get it due to health or you can’t prove income/working hours. Don’t buy a step down, if you can avoid it in anyway.
All the major carriers that sell Non-Cancellable insurance: Manulife, RBC, Canada Life and Great-West Life all have great products, and there are almost zero exclusions built into them; my favorite thing. Of course, based on health you can have exclusions, but those are pre-existing condition exclusions. Even if they slap one of those on you, you should still take it.
Having a policy with one or two pre-existing condition exclusions is still better than no policy at all. And the other types of policies have pages of exclusions already built into the contract. Don’t buy one of those if you can avoid it.
5. If you had to choose between Critical Illness and Disability Insurance, which one would you choose and why?
This is an easy question, if you don’t have disability insurance or enough or the right kind, put your money to a good disability policy. After that, you can make a decision what is more important, Life or Critical Illness Insurance. However, when it comes to term rates, you can probably get both Life and CI in an affordable range.
Everyday Andrew sees a different story: a single mom, a married contractor, a retired couple, the list goes on. His job is to make sure: There is insurance if it’s needed (Life, Disability and Critical Illness Insurance) and reduce the taxes that theses amazing Canadian will have to pay over their lifetime. He helps his Financial Advisors help their clients buy insurance when it’s needed!