Most of us run short on cash and look forward to receiving over next pay check. Still we don’t sit back for movement to think about how this will affect us if we don’t get a paycheck. Will we be able to manage our mortgage payments, groceries and other monthly bills? How long will it take for us to catch up to that lost paycheck? What will happen if we don’t get check from few months to several months? It can easily happen due to an illness or injury, you were unable to work?
The point is it make sense to insure your paycheck, especially when you insure your home, car and other valuable possessions, so why wouldn’t you also protect what pays for all those things—your paycheck.
How can you insure your paycheck?
Insurance companies will offer you an insurance that in the event of any illness and/or injury will pay you up to 66% of your paycheck and you will receive the money tax free. The coverage runs up to age 65. It gets even better, some insurance companies even let you add a provision at small cost, if you don’t claim any benefits for 7 years they will return you half of your money. The term used for this kind of insurance is disability insurance. There are many ways a disability insurance plan can we designed, and your advisor can help you with the plan that will better fit you budget and needs.
What are the chances of getting Disable?
You can answer this better than me, what are your chances of having a crippling accident or were diagnosed with a critical illness before age 65. Typically 30 year old has a four times more chance of becoming disabled than dying before age 65. And one in six Canadians will be disabled for three months or more before the age of 50 due to accident or illeness like Cancer, Stroke, Heart Attack, Parkinson’s Disease, Alzheimer’s Disease, Aortic Surgery, Aplastic Anaemia, Bacterial Meningitis, Benign Brain Tumour, Blindness, Coma, Coronary Artery Bypass Surgery and list goes on.
Why people procrastinate to get Disability Insurance?
They think they won’t get disable.
Government will pay for it?
Most disabilities are not work related so they won’t qualify for workers compensation and those qualify are only covered up to 120 days.
People think they have disability coverage through work but majority of private business doesn’t offer long term disability.
They have mortgage insurance to cover mortgage expense, which is fine but that only covers mortgage. Most cases you are far better off getting the disability insurance and opting out mortgage disability insurance as most of times personal disability is better plan.