10 Reasons To Buy Disability Insurance

July 28th, 2010 | Author: Mitch Reynolds

10 Reasons to Buy Disability Insurance

Good Reasons Why Canadians Should Buy Disability Insurance

Buy Disability Insurance in Canada 1. Becoming disabled is your biggest risk

2. Group disability insurance is limited.

3. Your health is your wealth.

4. Your lifestyle depends on your ability to earn an income.

5. You don’t want to do a job you hate.

6. Self employed or without group benefits leaves you totally exposed.

7. You might not always be insurable.

8. You can design a plan to meet your needs.

9. You’re worth more than you think.

10. It’s one of the smartest bets you could ever make.

1. Becoming disabled is your biggest risk.

There is a very high chance you might suffer from a long-term disability in your life: about 50%. With one in two Canadians experiencing a long-term disability during their lifetime, it is risk you should not ignore. Even though it seems unlikely, the younger you are the greater your risk of becoming disabled. It’s because you have many more years of work ahead of you, and the risks of injury or illness for those many years of work in the future increases your likelihood of suffering a long-term disability. If your period of disability lasts more than 90 days, the average time off work is 2.9 years!

2. Group disability insurance is limited.

If you are lucky enough to have a group disability insurance policy, you are probably not as fully covered as you might think. Here is a short list of�reasons�why your group disability insurance policy might not cover you fully: if you earn bonuses or incentive pay which is not considered regular salary it is not covered; many group disability insurance plans have limits or a cap on monthly disability benefits, so top earners like managers and executives have very little coverage�compared�to total compensation; disability income benefits are payable for only 24 months for your regular occupation, and then you would be forced to do ANY occupation if you are fit to work outside your specialized field and would no longer be covered; your group disability policy insures only TOTAL disability, so if you return to work part time your disability income benefit would stop. Group disability insurance is limited, and if you do have a higher income to protect, you should look at a disability insurance top-up.

3. Your health is your wealth.

We all need to be healthy to go to work each day and make a valuable contribution. We’ve heard it all before, but we really don’t value our health enough until we’ve lost it. If you were suffering from an injury or illness, going to work each day becomes a struggle, and it can affect your income, which could be reduce or stop altogether. How long would your bank be understanding if you couldn’t make the mortgage payment because of a disability? Will your monthly bills for heat, water, electricity, etc. be forgiven because you are disabled? In short, NO – and it is unlikely a bank would lend to a disabled person out of work. Remember, you must buy disability insurance when you are healthy, before suffering from a serious illness, injury or a mental/nervous disorder. Once you become sick or hurt, you might become uninsurable.

4. Your lifestyle depends on your ability to earn an income.

Your lifestyle is based on your income, and your future plans/dreams all depend on your ability to earn income today. You need to feed money into your savings each month to reach your retirement goals. Paying down a mortgage, buying a family cottage boat, RV, etc. all require you to keep earning an income. If you suddenly couldn’t work, and your income stopped, your future dreams, retirement plans and everything could disappear as you struggle to find money to make it through each month.

5. You don’t want to do a job you hate.

Would you want to be forced to change jobs because of a disability? What if you could do another type of work that was somehow easier than your current occupation, but it might pay significantly less money. You might be forced into a job that is beneath your current level of skills and abilities because of a sickness or injury. Without proper disability insurance, this becomes a reality for many Canadians. After 24 months on a group disability insurance claim your definition of�REGULAR occupation�will be changed to ANY occupation and you will be reassessed to see if there is any form of work you can do even with your current level of physical or mental�impairment. If so you will be forced to re-enter the workforce in a new kind of career or immediately lose your disability income benefits. This is a terrible situation to be in.

6. Self employed or without group benefits leaves you totally exposed.

If you are self employed or working for a company without any group�disability insurance, you would suffer a total income loss from a disability. Most people in this situation have disability insurance as “something I should get around to”, but often it doesn’t get done. We all procrastinate, especially with things that will cost us money and time. Just imagine becoming disabled while you were thinking you should buy disability insurance. Many people find the cost to buy disability insurance very high, and wish they had the cheap stuff offered through an employer group disability plan. Actually,�cheap group disability insurance only seems inexpensive to the employees because the employer is paying the bulk of the premiums as an added benefit of their employment. There is no cheap disability insurance. You should look for disability insurance that is a fair price and provides value.

7. You might not always be insurable.

As said above, you must buy disability insurance while you are still healthy. Once your health changes, due to a serious illness or an injury to a part of your body or some form of mental or nervous disorder, you suddenly become high risk. Even though you might think you’re fine, you might be a high risk of claim in the eyes of an insurance company. Once you ar “high risk”� to an insurance companies, there is one of two outcomes. You might be rated, and asked to pay much higher premiums than a health person for your coverage, or you could be declined – meaning the insurance company doesn’t want to take on your risk. If you leave the doctor’s office feeling uncertain about your health and your future, an insurance company will feel exactly the same way, and not be very lenient. Get insurance NOW, while you’re still healthy.

8. You can design a plan to meet your needs.

There are many different types of disability insurance plans. You can customize disability insurance to fit your unique needs and budget. There is a lot of complexity to designing the right disability insurance policy, so be sure to seek out a disability insurance specialist before you buy. Keep in mind that you can’t insure more than you earn. A very high level of disability insurance benefit would give you incentive to stay home on claim. Therefore insurance companies typically offer about two thirds of your earned income as a disability insurance benefits. This should meet your monthly bills, but not provide for any extras. There would be an incentive to go back to work so you can earn more money and fulfill your dreams! If your budget does not allow you to buy disability insurance covering your full income, you can always buy less. It’s better to have some coverage than none at all.

9. You’re worth more than you think.

How much do you think you’re worth? Can you put a dollar figure on yourself? Think of yourself as an econominc engine, able to work and make money/income for many years to come. If you think of yourself this way you might see how valuable you are. As an example,a 35 years old, making $75,000 and planning to work another 30 years would earn over $3 Million (assuming a 2% annual increase). You’re definitely worth a lot more than your house or your car, and you wouldn’t think twice about insuring those assets. Insure YOURSELF – you’re definitely worth it.

10. It’s one of the smartest bets you could ever make.

Do you like to gamble? Let’s make a wager on either becoming or avoiding a disability. Here is how it works. If you bet you will have a disability and buy disability insurance one of two things can happen (50/50 chance): either you become disabled and get a HUGE financial benefit from your plan, or you don’t get disabled and lose the smaller amount of money via your monthly premiums. If you bet you will �not have a disability and don’t buy disability insurance, one of two things can happen (50/50 chance): you don’t get a disability and have saved or spent the extra dollars you would have used for disability insurance premiums, or you do have a long-term disability, lose your income, your savings and possibly your house if you can’t pay for it. Weighing up the risks and potential outcomes, and you will see the smaller price of disability insurance premiums is the wiser choice.

Life Guard Insurance can help you buy disability insurance that is right for you

Feel free to get a quote for disability insurance now, or just contact Life Guard Insurance to be put in contact with a local life insurance broker in your area. They will help you design and buy disability insurance that meets your needs.

The article was written by +Mitch Reynolds. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about 10 reasons to buy disability insurance�would be very much appreciated.