Disability and Critical Illness Insurance – Either-Or or Both?
Can Canadians afford both disability insurance and critical illness insurance?
Why do people need both? Simply stated, most critical illness contracts pay out a lump sum once the life insured has survived the critical illness diagnosis for 30 days. On the other hand, disability insurance pays out a monthly income after the waiting period has passed (usually 60 or 90 days). But what happens when it doesn’t? What happens when there is a hold up or a dispute over one’s disability insurance claim?
A gentleman I know had this happen to him and it had a huge impact not only on himself, but on his immediate family. His daughter was forced to the brink of bankruptcy when her disability claim took well over a year to get approved. She helped him organize his many doctor’s reports, attend a battery of tests, and chauffeured him to many specialist appointments, while time just marched on. She was so busy helping her Dad that she couldn’t work and her expenses increased. ultimately she exhausted all of her resources, including money saved for her RRSPs and taking another mortgage on the home.
Not every disability is going to qualify as a critical illness, but when it does fall into the very common 24 major illnesses and injuries (including cancer, heart attack, stroke, MS, Parkinson’s and more), the lump sum tax-free payout can be used as the insured chooses, and that can be as income replacement until the disability claim is approved. Having a critical illness benefit to tied one over for 6-12 months is just wise planning.
It doesn’t always have to be an either-or choice because of cost. Canadian clients can afford a small but very important $25,000 critical illness insurance benefit. Empire Life’s Vital Link can add an extra level of security in the case of illness. For example, $25,000 of Vital Link 10 for a 40 year old female, non-smoker for would have a premium of $19.94/month.
You should speak with your insurance broker/advisor today about critical illness insurance AND disability insurance. It doesn’t have to be an either-or choice – it can be both. And be sure to take a look at Empire Life’s Vital Link critical illness insurance policy. We have one of the most competitve policies in Canada today to protect your from a life altering critical illness.
The article was written by Marc Germain, Account Executive, Retail Insurance Distribution with Empire Life. 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 Disability and Critical Illness Insurance – Either-Or would be very much appreciated.