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FREQUENTLY ASKED QUESTIONS

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Disability Insurance a necessity
What would happen if you were suddenly disabled in some way, and unable to continue your regular work or activity? What if you no longenr had an income to meet ongoing expenses? How would this loss affect your dependants?

Disability strikes far more frequently than premature death. Temporary or long-term disability can happen at any age. It can come suddenly from an accident, or severe mental or physical illness, or develop over time. A third of all people now aged 35 will be unable to work for at least six months before reaching age 65.

Adequate insurance
Having adequate disability insurance is crucial. It can mean the difference between low-income future employment, and having the funds needed to prepare for a new career. Your family can be financially ruined, or financially secure.

Adequate disability insurance should be a part of your financial plans, for yourself and for your family.

Group policies
Close to eight million Canadians have disability insurance coverage through group plans, often through work. However, many people are not covered adequately, and some are not covered at all. There are various limits in group policies. The plan may pay only a percentage of your gross salary, or it may have a maximum payout that doesn't meet your needs. It may only cover your inability to perform "any" work, rather than your "own occupation," or have a restrictive definition for partial disability.

Group plans also generally terminate when you leave an employer for any reason. This can be a major cause of concern for many Canadians. Even if you start a new job right away, you may have to wait several months to join your new employer's plan (assuming there is one).

Some employers offer "top-up" disability insurance policies to add to the standard coverage provided in most group policies. These are suitable for those who need more extensive coverage. However, you should check closely to determine how a top-up policy will affect your group plan benefits.

Self-employed Canadians
Nearly 2.3 million Canadians, or almost 17 per cent of the total workforce, are now self-employed, and that number is growing rapidly. Provincial workers' compensation programs or the federal employment insurance program provide basic disability coverage. However, these plans provide limited coverage, with relatively low benefits. Most self-employed people need additional income protection insurance. Older self-employed persons may find it difficult and expensive to obtain individual disability insurance. It's obviously better to buy such a policy when you are younger.

What is a disability?
Look carefully at how your policy defines a "disability." The best policies, and the more expensive ones, offer "own occupation" or "regular occupation" coverage. In these policies, disability is defined as being unable to perform the duties of your usual job. People in professions demanding special education or experience should look for this type of policy.

Under some policies, you are disabled only if you are unable to work at any job for which you are qualified by education, training, or experience. This is an "any occupation" definition. The least comprehensive policies cover only "total disability," or the inability to work at any job at all.

Accident or illness?
Some policies cover disability arising from accidents or illness. Some will protect you only from injuries and not illness. Check that you are covered both on the job and in your leisure hours.

Many self-employed people run into affordability problems when they try to arrange disability coverage. As the policies become more comprehensive, they also become more expensive. Your insurance advisor can help you find a policy that will adequately protect you and your family.

Some questions about disability insurance

  • How does the insurance company define a disability?
  • Is the policy guaranteed renewable?
  • If I become disabled, how long are benefits payable?
  • How much of my current salary will the policy pay?
  • How can I increase my coverage?




“If you aim at nothing, you will hit it with amazing accuracy.”



Raymond E. Jackson, CFP, CPCA
Retired

 

 



Simon J. Jackson, CFP, CPCA
Senior Financial Advisor, Manulife Wealth Inc.
Life Insurance Advisor, Manulife Wealth Insurance Services Inc.

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Simon Jackson, CFP, CPCA
Tel:  (289) 245-1003 ext. 221; Email: simon.jackson@manulifesecurities.ca

Geraldine Doupe, Administrative Assistant
Tel:  (289) 245-1003 ext. 241


 

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Jackson Financial Planning Group | Manulife Wealth

3310 South Service Rd. Suite 204, Burlington Ont. L7N 3M6

Phone: (289) 245-1003
Fax: (289) 245-1009

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Investment dealer dealing representatives (“investment advisors”) registered with Manulife Wealth Inc. offer stocks, bonds, and mutual funds.. Jackson Financial Planning Group is a trade name used for dealer business only. Insurance products and services are offered through Manulife Wealth Insurance Services Inc. Banking products and services are offered by referral arrangements through our related company Manulife Bank of Canada, additional disclosure information will be provided upon referral.

Simon Jackson and Manulife Wealth Inc. and/or Manulife Wealth Insurance Services Inc. (collectively, “Manulife Wealth”) do not make any representation that the information in any linked site is accurate and will not accept any responsibility or liability for any inaccuracies in the linked site. Any opinion or advice expressed in a linked site should not be construed as the opinion or advice of Simon Jackson or Manulife Wealth. The information in this communication is subject to change without notice.