Easy Ways to get Disability Insurance:

Disability insurance is a type of insurance product designed to replace a portion of your income should you become disabled or unable to earn an income. There are three ways a disability can occur and they include a serious illness, injury, or a mental health issue.

There are two types of disability insurance: short-term and long-term. There are also different types of disability coverage and these are as follows:

  • Individual disability coverage
  • Group disability insurance plans
  • Government disability plans (worker’s compensation and disability benefits under the Canada Pension Plan)

Most Effective Ways to Get Disability Insurance

Below are the easy ways to get individual disability insurance and group disability coverage:

Individual disability

You can go through an insurance broker or contact an insurance company directly for an individual plan for yourself and your family.  Most individual policies are long-term coverage plans, but some companies offer short-term policies as well.

Group Disability Insurance Plans

If your employer offers group disability coverage you can sign up at work for coverage. Most employers pay a portion or all of the cost of the premiums.

Some employers don’t pay for disability benefits but they offer it as a voluntary benefit. You can buy the coverage as an employee through their coverage at a group rate, but you pay for the premiums.

You can also buy disability coverage through some professional associations at group rates.

5 Factors That Affect Disability Insurance Payments

  1. Elimination Period: This is a length of the time after you first apply for benefits where you are not eligible to receive benefits. It’s similar to Employment Insurance where you have to wait two weeks before you receive benefits. The length of time varies with different policies.
  2. Total Disability: There are two definitions used to describe total disability in an insurance policy, and they’re called “Own Occupation” and “Any Occupation.”
  3. (a) Own Occupation: This applies to someone who’s unable to perform the substantial and material duties of his or her occupation. Thus, they don’t have to be entirely helpless, just not able to do what’s required of their particular occupation (generally, the position they had when they were injured).
  4. (b) Any Occupation: The standards for this type of disability insurance is stricter because the claimant can only receive benefits if they’re unable to perform any type of job for which they are qualified.  That is, any job that is suitable to them based on their age, education and experience.
  5. Benefit Period. In a disability insurance policy, the benefit period defines the maximum time in which disability benefits will be paid for a set period of the disability. Depending on the insurance company, this can be a short time (13 weeks), or until the claimant reaches retirement age.

The longer the benefit period, the more expensive the disability coverage will cost because the insurance company has to pay more money. On the flip side, if the insured is close to retirement age the benefit period won’t be as long.

Thus, disability insurance is still recommended as part of a financial plan for individuals close to retirement age.

  • Monthly Indemnity: Is what the benefit paid to the insured is called. Simply put, it’s the dollar amount paid monthly to the claimant while they’re totally disabled as defined in the disability policy. The monthly amount paid is normally around 60 per cent of the insured’s income that is usually earned from employment.
  • Other Income Benefits.While an insured is disabled they may be eligible to receive disability benefits from other sources. Other sources may include Canada Pension Plan, or disability benefits from another employee sponsored plan. Their benefits payable under their disability plan may be reduced by the other disability benefits.

The concept of disability insurance is simple, but the types of policies and the terminology can be complicated.

Thankfully there are easy ways to get disability insurance if you know the type you need.

Comment below if you have thoughts, questions, or comments.  

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Arnold Smith

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