If you were to become disabled, how long would you continue to receive a paycheck? This is a question that many people believe that they know the answer to; unfortunately, the answer is usually given without fully investigating the type and amount of coverage that they really have. The dilemma is that if you think you’re protected and it turns out that you are not, it could lead to unexpected and unfortunate consequences, should something adverse happen to you. Imagine how devastating it would be to work hard all of your life and then lose everything as a result of an accident or illness. The solution to this problem is finding out what type of coverage you have, and taking steps to address any shortfalls.
Discussing disability insurance Ontario is even less fun than discussing life insurance. But it’s important. Disability insurance is intended to help you meet your income requirements while you are off from work, allowing you to concentrate on what’s really important, recovering from your disability and returning to an active life.
For most of us, our income is our single greatest financial asset, and disability insurance protects the loss of that asset. While there are more dual-income households than ever before, the reality is that both incomes are needed. The loss of even one income can have a significant impact on the ability of a household to cover their monthly expenses.
Some things to consider:
If you already have a policy in place, what is your monthly benefit? Would you be able to live on that amount of income if you had to? One way to determine how you would be affected financially, should you become unable to work, is to try and live on the monthly benefit amount for a period of one month. If you find that you needed to dip into your savings, you’ll have a pretty good idea of how hard it would be to live for an extended period of time on this reduced income.
If you wait until you are actually ill, you may be unmeasurable. Nobody wants to get sick or injured, but if that happens, having protection in place can provide peace of mind. Consider this statistic: A 20-year-old has a 30% chance of becoming disabled by the time he or she reaches retirement age. While our medical system covers a large portion of our expenses, including hospital care, disability still remains one of the leading causes of bankruptcy in Canada (the reality is that even six months without income could wipe out years of hard-earned savings).
Everyone has something that they want to protect. For example, while a married individual with children would want to ensure that their family does not suffer due to a loss of income, a single individual with no dependents would want to protect their credit rating. In the event of an injury, you might incur a loss of income which could significantly impact your ability to pay your bills, and even though your income might change, your obligations likely won’t.
There are varying types of coverage that offer different types and amounts of protection. Talk to an adviser like Brendan Donnelly today, who would be happy to review your current coverage, answer any questions that you may have about disability insurance, and discuss a solution that meets your needs and fits your budget.