DISABILITY INSURANCE
Long Term Disability Income Replacement
Becoming disabled suddenly due to an accident, triggered by a mental illness, or becoming diagnosed with a degenerative condition can steal you of your ability to earn an income and not able to afford daily living expenses.
Disability coverage provides for day-to-day living expenses including paying down debt, paying the mortgage or rental payments, auto repair, home improvements, traveling to and from treatments, facilitate home care and child care expenses the list is exhausting and why disability insurance is commonly referred to as Income Replacement Insurance.
You are 1 out 3 people who will be disabled for more than 90 days before reaching age 65. Take your pick out of one of the following scenarios:
- Suffering from Mental distress
- You spend months in bed after recouping from a serious car accident
- You have broken your leg during a ski trip and cannot work for eight weeks
- You have been diagnosed with prostate cancer requiring chemotherapy and are not expected to return to work for at least 9 months if not longer.
- You just suffered kidney failure need to be hospitalized placed on kidney dialysis indefinitely waiting for a donor kidney transplant.
Disability insurance is rarely seen as a stand-alone insurance policy by employees who have an employee benefits plan but disability may not be covered as a health benefit within the plan.
Where do I find Disability Insurance?
- Disability coverage may already exist in your employee benefits package check with your human resource department at work
- Workplace Safety and Insurance (WSIB) coverage is provided through your employer as well with restrictions to accidents and illness occurrence attributed to your work environment while at work.
- Employment Insurance (EI) is mandatory coverage both you and your employer obtain through the federal government of Canada provide short term (STD) coverage for 15 weeks if your disability persist longer than 15 weeks you will need to apply for long-term disability (LTD)
- Canada Pension Plan (CPP) your government-sponsored pension plan provides for LTD in replace of the pension in extreme cases where under the direction of your family doctor and medical assessment determines that your state of health is permanent and advises that he/she expect you to be returning to work due to your health condition.
- Private disability insurance can be purchased through a health benefits broker if you do not have disability listed as a health benefit within your health benefits plan at work.
What is the difference between short-term and long-term disability?
The fundamental difference between STD and LTD
a. The period of coverage in the case of STD max 15 weeks LTD starts 120 days depending on the severity of the illness or sickness up until you turn age 70+
b. The definition of disability will also determine the duration of coverage restricting coverage between 24 months or extending coverage to age 70+
c. The waiting period also is a factor in the case of STD there may be a 0-day wait whereas LTD on average 15 weeks for employees and self-employed it could be 30 days.
Disability insurance can be complex and difficult to understand particular when it comes to the integration and coordination of both STD and LTD
To help find out how your overall LTD/STD income replacement program works it is best to speak with your employer and or if there is no coverage for LTDspeak with a benefits specialist insurance broker for a further assessment and quote.
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