Archive for the ‘RBC Insurance’ Category

Patty Randall is our guest author about long term care insurance. She is the owner of www.longtermcarecanada.com and Canada’s foremost speaker and educator on long term care needs and aging successfully with passion and purpose. You can email her at pattr@telus.net. Please check out her website section on Long Term Care Insurance in Canada.

An Opinion on Long Term Care Insurance

Maybe this is a good time to remind everyone that long-term care truly is ‘a family affair’.

In our country, 90% of care is undertaken by family in one’s own home and 1 in 5 caregivers still provide care to their loved ones even when in a care facility. As well, 80% of Alzheimer’s-dementia persons are cared for at home, usually by a spouse.

“It upsets me!” “It upsets my family!” These are the two major barriers recently identified for not having a conversation about our future long-term care! Shockingly, the majority of couples have not talked with their spouses yet about the three key aspects pertaining to their future care:

• Their options when they need some care and related costs
• What they expect of their family members
• How their future care is to be paid for

Many people ask me about long-term care insurance (LTCI) as a method of financing some of the costs of our potential future care. I’m not a planner, insurance agent or broker, nor do I work for any insurance company, so I can only express my understandings as a consumer with years of care-related experience.

1 in 4 Canadians retire because of a health issue. 1 in 4 of us will have a long-term disability while 8 out of 10 of us when elderly will have a chronic health problem. So, I view my future long-term care like I do any other risk. I own house insurance (the chance being 1 in 1200 that my house might burn down) and I own car insurance (the chance, 1 in 240 that there might be a catastrophic crash). And I own LTC insurance (the chance is 1 in 2 that I will need some care in my future). Long Term Care is the single largest out-of-pocket cost for adults over 60 therefore it is a significant financial risk too.

Naturally I won’t be disappointed if I never get to claim against my house insurance after years and years of paying for it. And that’s my attitude toward my long-term care insurance too. (Great, I won’t have needed it!)

Long Term Care Insurance is an insurance program designed to help the insured, you/ me, provide for our own care in cases of chronic illness, disability, an accident or as a result of growing older. (Long Term Care Insurance is not just for seniors — care may be required at any age.)

It provides coverage for times when we can’t manage the essential physical activities of our daily living (ADLs) on our own, such as feeding, dressing, bathing, toileting and walking, as well as moving from a bed to a chair. However, mental incapacities can be covered as well. It is important to understand the importance of the ADLs since the inability to perform a certain number of these ADLs or to pass certain mental tests is how insurance companies decide if we are eligible to claim and receive the benefits of our policy.

The experts tell us that we should own a long-term care policy for the same reason we buy life insurance, because we love our family, and without it, our family could be seriously affected, in some cases devastated. We are going to be taken care of one way or another, but it is our loved ones’ lives that will be changed dramatically without some planning on our part — it’s all about consequences. It is often said that ‘LTCI doesn’t replace a family’s love, it complements it’.

We need to consider this type of insurance since many of us couldn’t afford to pay for all our care needs over a long period of time as that care, wherever it may be, could be costly. Because provincial government care-initiatives are limited and can change over time, it isn’t a good idea to put ourselves in a position of dependency on government programs and services.

Of course, none of us want to become a burden. We’ll want choices, as one gentleman said, ‘I would like to choose where I go rather than be taken there’. We may also consider Long Term Care Insurance to protect our estate. For me, peace of mind is extremely important since I want to ensure that I have all in place in my retirement and Long Term Care Insurance fits as a piece of that plan.

We should buy Long Term Care Insurance ‘sooner rather than later’ (as my best friend who is an insurance agent tells me, ‘better 5 years too early rather than 5 minutes too late’). One must be ‘health eligible’ to qualify, but, and this is an important but, even if you have a certain health problem now, it doesn’t mean you won’t qualify, so always ask.

We should buy a policy that allows both ‘home care‘ and ‘facility care‘ — trying to have our bases covered — and don’t forget to ask about spousal discounts and inflation coverage.

Long Term Care Insurance polices aren’t one type. Different companies sell policies that combine features and benefits such as benefit periods, 1-2-5 years or lifetime. Also, the amount of daily benefit you can purchase can range ($100-$300).

And insurance companies pay differently too. Some pay a lump sum monthly up to your limit; some pay the amount of the care-bills actually incurred monthly upon submission; and there are even income policies. It’s important to ask specifically about the policy’s payment methods as you’ll want the best for your situation.

A key question always asked is, ‘What does it cost’ . . . ‘That depends’ I usually respond . . . think of it like buying a house, what features do you want, your Long Term Care Insurance policy is ‘customized’ to fit your circumstance. Since I have been in situations where I’ve had to pay the care bills every month for years, I also discovered that a Long Term Care Insurance premium is less expensive than actual care costs. Of course, it is best to buy prior to age 65 as costs are age-based, the younger you buy the better!

Certainly cost is always an obstacle, but I would rather make do without some other big-ticket item in my life than this particular insurance plan given our demography, economy, health system budget concerns, marital status changes and our tendency toward long life.

Long Term Care Insurance is a complex product, but we shouldn’t be in denial that we’ll probably need some demanding care in our later years when ‘our biological warranty’ is running out. I recommend you investigate Long Term Care Insurance by calling a qualified insurance agent or financial planner. You may also go to my website and link to the reputable insurance companies that offer this product in order to learn more.

Wishing you good decision-making regarding Long Term Care Insurance, Patty

Pricing Wars for Term Life Insurance Continue in Canada

Term Life Insurance in Canada is cheaper, but at what cost to consumers?

It has been over a decade now that Canadian life insurance companies have been battling over the term life insurance market. Prices have steadily come down over these years as life insurance brokers have been able to price compare different life insurance companies’ offerings for clients. Low cost life insurance is a good thing for Canadians, but we should all be careful to remember price isn’t everything.

One of the first major problems with term life insurance prices dropping is the fluctuation in business flow from one life insurance company to another. An efficient market for life insurance would mean that each life insurance company has captured a certain percentage of the Canadian term life sales and is comfortable servicing this size market. When aggressive term life insurance re-pricing brings one company’s prices well below their competition, a majority of the life insurance brokers across Canada will begin putting their business through that company. This is what happened to RBC Insurance recently when they reduced their term life insurance prices to be the lowest in Canada for many target age groups of clients. The flood of business that went to RBC Insurance was huge, and they were not prepared to handle the increased case load. A company like RBC Insurance, which is Canada’s largest bank owned Life Insurance Company, is still only about the 8^th or 9^th largest life insurance company in Canada. It could not efficiently handle the massive intake of new term life insurance business. This meant long wait times to get policies underwritten, lower levels of customer service, unhappy customers and frustrated brokers.

Sometimes price isn’t everything. Trust, dependability, and a good relationship mean a lot more when dealing with a life insurance company (for brokers) or an insurance advisor (for clients).

Reinsuring term life insurance can move prices lower

One of the reasons life insurance rates continue to drop is because Canadian life insurance companies have been selling off their risk portfolios to international reinsurance companies. These giant companies deal directly with local life insurance companies in Canada, offering to buy up large amounts of their book of financial risk for less than the premiums the Canadian life insurance company gets from their clients. For example, a reinsurance company goes to RBC Insurance and says they will buy up the their term life insurance business for $0.85 for every dollar RBC Insurance gets in premiums. This means RBC Insurance is no longer liable to pay the claim (the reinsurance company will pay claims since they bought the business) and RBC Insurance can now pocket $0.15 of every dollar paid to them in premiums as pure profit.

So, how do reinsurance companies make a profit is they get less money for the life insurance risk they buy? There are a couple of things happening. Firstly, there are the mathematical laws of large numbers. These reinsurance companies are huge and have millions and millions of people from all over the world insured through them. The large numbers of insured people mean the statistical risks from any one group (like Canadian clients from RBC Insurance) go down. Reinsurance companies can make money because they very accurately calculate the total claims expected versus the premiums coming in. The larger your group, the more accurate you can calculate these numbers. Even a serious natural disaster or terrorist event, like 9/11, is only a minor blip on a reinsurance companies claims rates for the year.

Secondly, and more importantly for Canadians, is that reinsurance company’s hold a great deal of power over their Canadian life insurance company partners. In order to “accept” the life insurance risk portfolio that a Canadian life insurance company is selling, they require more detailed investigations into clients’ health records and more tests of blood and urine samples. The outcomes for this increased amount of underwriting to get life insurance have resulted in the following:

Term life insurance is harder to get than ever before

It has become harder and harder to actually qualify for life insurance, especially term life insurance. Reinsurance companies want to reduce their overall risk portfolio, and so by increasing medical investigations they can weed out the undesirable candidates for term life insurance. Term life insurance is a specialized risk class for life insurance companies. The premiums are very low (never been cheaper in Canada than today) but the financial risks to the insurance company are high. If a Canadian life insurance company or a reinsurance company can reduce its overall risk portfolio on a product line they will make more profit because the group they have left is less likely to die during the term number of years they carry their life insurance policy.

What we have seen as brokers in the life insurance business is:

• more detailed underwriting questions uncovering every possible health condition
• a higher likelihood that a full blood and urine analysis will be done on our clients
• more paramedical exams and telephone investigations being ordered
• greater focus on mental and nervous disorders when considering life insurance risks
• a doctor’s medical report will be ordered to investigate even minor conditions that are reported
• more focus on foreign travel and not insuring Canadians travelling outside of Western countries or tourist areas

Preferred rates less likely and rated policies more common on term life insurance

In the past, when term life insurance premiums were higher, the life insurance companies could afford to absorb a bit more risk and even offer preferred or discount rates for borderline cases. This is no longer the case. A life insurance company, held captive to its reinsurance agreements, must increase term life insurance premiums by a minimum of 50% extra when clients have even minor risks. I have even seen a case of minor irritable bowel syndrome (IBS) where my client only took medication occasionally during flare-ups (which was once or twice per year) get a plus 75% rating. Otherwise this client was very fit and a competitive athlete.

The flip side of getting rated (paying a percentage extra above the standard rates) is qualifying for preferred rates. It was fairly common that about 35% of Canadians in the past could qualify for preferred rates. A preferred rate usually means about 10% to 30% discount on your annual or monthly insurance premiums based on your good health. With the inclusion of family history questions and your driving record, preferred rates do not depend only on your good health anymore. It also depends on your immediate family’s good health and your good behaviour behind the wheel.

Term life insurance is still a great risk management policy, but you have to plan ahead

Having said all this negative information, there is still a lot of good that has come out of the pricing war for term life insurance in Canada. Term rates are lower today than ever before. If you are in good health you might qualify for preferred underwriting, locking in an even cheaper term life policy for many years to come. Even if you can’t qualify for preferred rates, and are offered a standard term life insurance policy, it is still cheaper than a preferred policy of ten years ago. The big lesson is to be proactive with your life insurance plans. Do not delay buying life insurance today, otherwise your health might change, your driving history could get worse or even your immediate family could get sick. All these events could limit your options when trying to buy term life insurance.

Feel free to contact Life Guard Insurance today to get a quote for term life insurance and to find out if you will qualify for coverage. We look forward to helping you secure good family risk protection with a term life insurance policy.

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 Term Life Insurance would be very much appreciated.

Long Term Disability Insurance is Complex to Design

The many moving parts of long term disability insurance

Long term disability insurance is one of the more complex insurance products to design for people. It has many moving parts and various riders and options that can be added to it. In this article we will cover the fundamental plan design elements to setting up a proper disability insurance plan. Also, we will discuss the three elements of underwriting that take place to get qualified for disability insurance.

This is different from group long term disability insurance, which usually has a static plan design and cannot be customized by the policy holder. When you purchase a personal disability insurance policy you can adjust many of these features to make the plan fit your unique needs.

Plan design elements of long term disability insurance

Elimination Period

The elimination period is also called the waiting period for a long term disability insurance plan. In fact, with most disability insurance policies, this elimination period can be as short as 30 days, but that is the most expensive option. The real premium sweet spot is a 90 day elimination period. This means you would be covered for all major illnesses and injuries that would keep you from work after waiting 90 days, and the insurance company is not likely to pay claims for short term events, like sprains, strains, break and cuts.

If you have enough money in the bank to afford to wait 3 months before your benefits start, then your long term disability insurance plan will be priced very competitively for your most financially impactful risks. Insurance industry statistics show that if your disability lasts more than 90 days, the average time off work is 2.9 years.

Benefit Period

This is how long you would like your insurance payments to go for if you were disabled. The shortest timeframe is for 2 years, or 24 months of benefit. You can also choose from a 5 year benefit, 10 year benefit or until age 65 benefit. For most people, even though the coverage to age 65 is the most expensive, it provides the best level of protection they are looking for.

Even though about 95% of all disability cases are back to work within 5 years, the 5% who don’t go back probably will never return to the workforce. For these people, knowing their disability insurance payments will never end throughout their working career is very valuable. Also, the price difference between a 5 year benefit and a “to age 65” benefit is not that steep, and can usually be managed by the budget.

Coverage Amount

When determining the amount of coverage you can buy for long term disability insurance, you have to look at your actively earned income. Passive income, like collecting rent cheques or interest payments from an investment, is not included in calculating your coverage amount. This is because passive income would continue even after you become disabled. Only a percentage of your actively earned income is insurable. The insurance company doesn’t want to over insure its clients so as to give people a financial incentive to remain on a disability insurance claim. They want to provide enough income for paying day-to-day expenses but give you incentive to go back to work.

So, there is a maximum you can qualify for. It is usually about 60 – 65% of your gross income before taxes. If you are a high income earner in Canada, this percentage will decrease. Disability insurance companies do allow for high income earners to get a much larger benefit but it is a much small total percentage of their take home income. For instance, if you earned $75,000 per year you could get a month benefit of $4,125 per month tax free benefit (or 66% of gross earnings). If you earned $250,000 per year from all sources of active income, like salary plus bonus, you could get $9,500 per month tax free benefit (or 46% of gross earnings).

If you feel you don’t need the maximum amount of monthly benefit, you can always reduce your coverage and thereby reduce your monthly premium. You cannot, however, get more monthly long term disability insurance coverage than your earnings qualify you for.

Regular Occupation vs. Any Occupation

A very common difference between personal long term disability insurance group coverage is the definition of regular occupation vs. own occupation. Regular occupation is defined as the job duties needed to perform the regular occupation under which you were insured. For example, if you are an oilfield consultant, you need to drive to sites, be able to walk around the job site, be able to use a computer, have strong cognitive abilities to write reports and analyze data, etc. And these job duties would be related to the job of oil field consulting, not supervising a manufacturing facility for instance. An inability to do these duties because of injury or sickness would trigger your long term disability insurance claim.

Any occupation definition, on the other hand, is defined as being able to perform normal job duties that would qualify you to re-enter the workforce in ANY occupation for which you are suitable trained and/or have experience in. A disability insurance company would also have the right to demand that you engage in retraining so you would become qualified to re-enter the workforce, and thereby get you off a long term claim.

With a personally owned long term disability insurance policy you can have the regular occupation benefit through to age 65. With group insurance you have regular occupation definition for 24 months, and then it switches to any occupation definition.

Total, Partial and Residual Disability Definitions

With group benefits disability coverage your only definition of coverage is total disability. This means you must be incapable of returning to work in any capacity and staying home 100% of the time. Even if you return to work part-time you would lose all your disability insurance payments under the total disability definition.

With a personally owned long term disability insurance policy you always get the total disability definition, but you also could get partial and/or residual disability definitions. A partially disability definition is if you are away from work about 50% of the time and/or you cannot perform one or more of the major duties of your job. Qualifying for a partial disability benefit would give you 50% of your monthly benefit. Residual disability coverage is defined as percentage of income loss while you are injured or sick and under the supervision of a doctor. If you are losing more than 20% or your prior income you would get that percentage of you monthly benefit. For example, if your benefit is $5,000 per month and you are losing 60% of prior earnings, you would get $3,000 per month and still be able to work part-time.

Having total, partial and residual disability definitions gives you a lot more choice and flexibility when on claim. Being bored at home and feeling trapped by a long term disability insurance policy is the last thing you need when trying to re-enter the workforce.

Three underwriting factors to qualify for personal long term disability insurance

Health Underwriting

As with life insurance or critical illness insurance, the insurance company will need to evaluate your health risks. What they are looking at is very different from a life insurance policy though. The insurance company needs to evaluate your likelihood of going on a long term disability insurance claim in the future based on your health today. Things like having prior mental or nervous disorders, like depression or anxiety, would make it hard to get disability insurance (since over 20% of all claims today are related to mental/nervous disorders). Having a prior injury to certain part of your body, like a torn ACL, would usually mean exclusion for that particular body part for any future claims.

If you are healthy and without prior injuries or illnesses it is very easy to get disability insurance (or any insurance for that matter). Unfortunately, as we age, it is more and more likely we have at least one thing wrong with us that makes getting a disability insurance policy a problem. Be prepared for certain exclusions and limitations to your long term disability insurance policy if you have any prior conditions.

Income Underwriting

This was referred to above, in that you can only qualify for a certain percentage of your actively earned income. When going through underwriting you need to provide proof of income. This is usually in the form of a T1 income tax statements for the last two years of earnings. If you are on contract, a copy of your contract agreement would also be needed. The insurance company will average your earnings over the last two years and offer maximum coverage based on the aggregate amount. To get more disability insurance coverage, be sure to provide additional evidence of other earnings that might qualify for coverage.

Occupational Risk Underwriting

Occupational risk is a big factor when getting long term disability insurance coverage. Disability insurance companies have many years experience with workers from different industries, and they have a long term history of claims. For instance people in the nursing profession have a higher rate of claims vs. accountants, so the accountant would pay less for the same monthly disability insurance benefit. Be sure to shop around with a broker, as some companies have had poor experience with certain groups and charge them more, while the other company would be able to offer a more competitive premium.

Just be prepared that if you are in a more physically intensive job or a blue collar trade you will pay more for disability insurance coverage than someone who works in a white collar professional career like a doctor or lawyer.

Get a Long Term Disability Insurance Quote Now

Designing a quote for long term disability insurance coverage is not quick and easy, and that is why there are no online tools to get a quote instantly. You can either use our Disability Insurance Request a Quote form or feel free to contact Life Guard Insurance directly to be put in touch with a qualified insurance broker who can design you a personalized long term disability insurance plan.

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 long term disability insurance would be very much appreciated.

Adding a Child Term Rider to Parent’s Policy is a Basic Life Insurance Plan for Children

A Child Term Rider provides risk protection today and converts to personal insurance tomorrow

Starting a life insurance plan for your children has never been as easy or as cheap as adding a child term rider to your personal life insurance policy. If you are shopping for your own life insurance plan or even if you already have one, you can add a child term rider (CTR) to the policy to cover all your children for one low price.

The most impressive feature of a child term rider is the conversion option when your child becomes an adult. This allows your child to pull the child term rider out of your policy and convert it into a much larger amount of personal life insurance without qualifying medically for the insurance. So, if effect, you are giving your kids the gift of “insurability” for their future – a gift that becomes very valuable if your child developed a health condition that made him/her uninsurable in the future.

How does a child term rider work?

A child term rider is an add-on to a regular adult life insurance policy. By adding the child term rider to their policy, parents can insure ALL their children with a level amount of benefit for one low monthly cost. Most child term riders offered by different insurance companies will allow parents to buy between $5,000 and $30,000 of life insurance coverage for each of their children.

As I said, the policy has one low cost and all children are covered. You need at least one child to be born in order to add the child term rider to your policy. Your children must be between the 15 days old and age 18 to get a child term rider. You must complete a simplified medical questionnaire for each of your children who are already born. The good news is that all NEW children you have will automatically be added to the child term rider without completing the medical questionnaire.

The child term rider doesn’t last forever. After a period of time the rider will terminate. This is different for each company. Most will only insure children until age 25. Some policies automatically cancel the child term rider after 20 years on the parent policy, while others will cancel when the child reaches age 25 or the parent reaches age 65, whichever comes first.

Let’s look at cost (maximum child term rider across a few different insurance companies):

• Sun Life – max benefit of $20,000: $8.10 per month
• Equitable Life – max benefit of $30,000: $13.50 per month
• RBC Insurance – max benefit of $30,000: $16.20 per month
• Canada Life – max benefit of $25,000: $13.50 per month
• BMO Insurance – max benefit $20,000: $16.85 per month

The conversion feature of a child term rider

The most important feature of a child term rider is your child’s ability to take over the rider as a personally owned life insurance policy when they become an adult. The child is allowed to take over the life insurance between the ages of 21 and 25 and convert it into any permanent life insurance policy available from the insurance company at the time.

The amount of life insurance that can be converted varies between companies. Most companies allow five times (5X) the base amount of life insurance to be converted without evidence of insurability. Some, like Canada Life, allow 10 times the child term rider amount to be converted. So, in the case of most companies, you could convert a $30,000 child term rider into $150,000 of personal life insurance. Canada Life would allow you to convert a $25,000 child term rider into $250,000 of personal life insurance that your child owns.

The conversion feature can be one of the most valuable financial plans you could ever give your child. If your child’s health was not good, and they developed a childhood disease like juvenile diabetes of cystic fibrosis, they would be uninsurable for a regular life insurance policy when they became an adult. The child term rider conversion option would allow them to get a large amount of personal life insurance without having to qualify for it medically.

Manulife Financial’s unique child term rider

Manulife has a unique child term rider that is different from all others in Canada. They have a small premium PER child of $2.50 per month. This can make the rider a much cheaper option if you have only one or two children. The child term rider has only one death benefit of $10,000 for each child. This is lower than the competition but the conversion feature is much better.

For each of your children you can convert their $10,000 child term rider into $250,000 of personal life AND critical illness insurance at age 25. The critical illness insurance conversion amount is limited to $100,000, but that would still leave $150,000 available for conversion into life insurance. All these conversions are done without evidence of insurability, even the critical illness insurance! The only stipulation is that your child does not have an illness that would immediately trigger a critical illness insurance claim at the time of conversion – like if he or she was currently dealing with cancer they could not get the critical illness conversion. The life insurance conversion for the full $250,000 would still be available, however.

Life Guard Insurance can set up your life insurance with a child term rider for your kids

If you are shopping for your own life insurance and would like to include your kids, or you would like to add a child term rider to an existing life insurance policy, we can help. Feel free to contact Life Guard Insurance to find out more about how to protect your children with a child term rider.

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 a child term rider would also be very much appreciated.

10 Reasons to Buy Disability Insurance

Good Reasons Why Canadians Should Buy Disability Insurance

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!

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.