Disability insurance replaces a part of your income if you are unable to earn because of disability. A disability can occur from a variety of reasons like an accident, illness or a mental health issue. The duration of disability depends on how and when you can recover.
Disability insurance covers various kinds of plans like group insurance, and individual insurance. It also covers government plans for workers working in a factory or place that may lead to disability. This plan covers for the benefits and compensation for these workers under the Canadian pension plan.
There are many kinds of insurance plans available, it is better to speak to an advisor so that he can provide you with options that will fit your circumstances. An advisor will not only show the options of the plan but will explain everything in detail so that you have clarity on how to use it in future.
Disability insurance covers for loss of income through a monthly benefit if you are disabled.
There are two kinds of disability insurance:
Short-term disability insurance this will work as a group benefit provided by an employer. Usually construction or factory workers provide their workers with such benefits, for the initial 120 days of disability.
Long-term disability insurance coverage can be taken by individual as well as group employers. This insurance offers coverage from the 120th day or until retirement at the age of 65.
A disability insurance helps the employers to take care of their employees and protect them against any injury that may occur at the workplace or at construction sites. Whether you buy a long term insurance or a short term insurance, you must know what your plan covers:
which disability is covered in your plan,
The conditions that insurance plan offers and
how long you have to wait to receive the income.
Now you need to understand if the amount you will receive from your insurance is enough to cover your expenses and take care of you in future. The insurance will cover you for sickness but if it is not enough to maintain your expenses then you can apply for disability insurance.
Worker's Compensation usually covers some types of workers and occupational accidents. So if you meet with an accident on a bike and are hospitalized and disabled to work for the next three months then this may not be covered in your workers compensation. If the accident did not occur at your workplace, it will not be covered.
The unemployment insurance cover will provide benefits of maximum 15 weeks. But if you still can't work, once 15 weeks are over then you can use disability insurance.
How does it differ from other insurance plans?
People usually think disability is only about two things: critical care and long term care insurance. The disability insurance covers for people under the age of 65 years and long term and critical insurance are created to cover health related costs for people.
Disability insurance will give you a monthly benefit if you are under 65 years and lose your job because of the accident and can't work for some time.
Long-term care does not reimburse your hospital expenses or give you standard recurring benefit for the care you require if you get physically dependent or impaired. In this situation, you will need personal nursing care or help from a family member.
Critical illness plan in turn gives you a monthly payout to help you cope up with your illness expenses and other expenses. You will get your benefit if your policy covers the condition that you have or have survived the period after which it becomes active.
Now if you are working at a job that may put your life at risk, like a manufacturing unit, that uses big machines, or a construction site where you have to work at heights and build houses. If you want you can buy disability insurance by yourself. The employers usually cover their labours with the minimum of coverage. The minimal cover that you will get from your employer may not cover the accident fully, in case you meet any. Also the policy may provide you with a minimum amount which may not be enough to cover all the expenses you have to cover. So taking these things into account will help you in choosing the disability cover that will work for you. CCFD will help you in deciding the right insurance for you, with just a click you can compare several insurance plans online.