Does this frighten you?
Based on actual experience, 50% of those age 35 and older will experience a disability from illness or injury that results in complete inability to work for 90 days or longer, and typically lasts between 2 and 3 years (Footnote 1). Most people do not have savings sufficient to replace income for this long. If they do, those savings were intended for retirement and if spent during a period of disability, would substantially set back retirement plans. The solution might be Disability Insurance.
Disability Insurance is a contract between the insured person and an insurance company whereby the insurance company will pay out a monthly benefit if the insured person meets the conditions of the insurance contract or “policy”. The definition of disability varies among policies, so it is important to understand this aspect of the insurance.
For example, a policy might define disability as your inability to do the regular tasks of your specific job for the number of hours per day or week that is considered normal for your occupation. But another policy might define disability as your inability to do ANY occupation. If you are a skilled worker, you might want better protection in the event that you can’t do your normal work, rather than receiving a benefit payment only if you can no longer do any work.
A second difference can be in how long the benefits might be paid out. Many group policies only pay benefits for two years, after which the benefits cease. Since statistics (Footnote 1) report that disabilities typically last between 2 and 3 years, and may be permanent, an insurance policy that stops benefits after 2 years might not be sufficient for your needs. Disability insurance, like life insurance, should be considered in response to a need which is unique to each individual. Therefore, working with an insurance professional to first determine if you have a need, and how much and how long the need persists, is the first step in selecting the right Disability Insurance protection.
Stay tuned for more articles around Insurance. We hope you will find this information valuable and will increase your financial confidence. You can always find these articles on our website www.actionfinancialgroup.com.
Karin Rimnyak, Certified Financial Planner®
Investment Advisor, iA Private Wealth
Insurance Advisor, Action Financial Group Ltd.
David Dryburgh, Certified Financial Planner®
Investment Advisor, iA Private Wealth
Insurance Advisor, Action Financial Group Ltd.
Ian Barrie, Certified Financial Planner®
Investment Advisor, iA Private Wealth
Insurance Advisor, Action Financial Group Ltd.
This information has been prepared by Karin Rimnyak who is an investment Advisor for iA Private Wealth. Opinions expressed in this email are those of the Investment Advisor only and do not necessarily reflect those of iA Private Wealth. iA private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.
