Disability Insurance

Ask yourself this question?

Do you need Disability Insurance?

If you were presented with two job opportunities, which were identical in all aspects save one.

Job one - Pays $80,000 per year looks good, but if you were disabled the job ends without notice.

Job two - Pays $77,500 per year looks good, and is guaranteed to last your lifetime. Whether you are disabled or not!

Which Job would you take?

If you chose Job two -- you have demonstrated the difference between having Disability coverage and not having it.

Personal coverage will provide you with a tax free income until you reach age 65 and to be permanently disabled you don’t have to be like Christopher Reeve. You could be permanently disabled and still get around fairly well, but you might be unable to work.

Statistics

• A 30-year-old man has a 20% chance of suffering a long-term disability before age 65.

• A 30-year-old woman has a 33% chance of suffering a long-term disability before age 65.

• 50% of people who have suffered a disability lasting longer than six months remain disabled after five years.

• Heart disease and back problems are the two most common causes of disability.

• More people go bankrupt because of a disability then for any other reason.

• One in seven employees will be disabled for five years or more before age 65.

"You have 5 sources for Disability benefits in Ontario."

Government

• Canada Pension Plans - C.P.P. -- to qualify you must be severely disabled -- Long Term
• Employment Insurance - E.I. -- short term
• Workers Comp --the disability must have occurred on the job--Tax free
  
• Disability tax credit

Group Plans: -- this is company sponsored--can be short or long term or both depending on the policy the company has.

Personal Disability Insurance: Long term, but can have limits depending on the policy--Tax Free.

Disability Insurance comes in various types--term and permanent with or without return of premium, shortened or extended waiting period, job classification, etc.

A personal disability policy must be crafted for and unique to the individual. There are too many variables to detail a D.I. policy here. Just keep in mind that two distinct types of D.I. policies are available. Those underwritten at time of application and those underwritten at time of claim. Like mortgage disability insurance.

If your policy is underwritten at time of application -- should you become disabled the Insurance company will pay out a tax free benefit according to the policy you have regardless of how you were disabled.

If you have a policy underwritten at time of claim. It is then, the Insurance company will make the decision whether they will pay the claim. Does this mean that anyone disabled under such a policy will not be paid? Not at all, but it’s not a for sure thing.

If an agent is presenting you a D.I. policy, be sure to ask if the disability is “underwritten at time of claim are upon acceptance?”

Disability coverage is particularly important for self-employed individuals who are not covered by Workers Compensation or E.I. and have no group plan.

To find out more about proper disability coverage speak with an Insurance professional. They can craft an individual policy that would be best suited for your situation.

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Terry Johnston

J C Mitchell Financial Services Inc.
431 Bayview Drive, Suite 1
Barrie, Ontario
L4N 8Y2

Phone:        866-721-7781 ext. 232
Fax:            705-721-1556