Do You Need Disability Insurance?

Posted on November 3, 2017

Do You Need the Best Disability Insurance?

Wondering whether you should get disability insurance? Learn more about what it is, and how to get the best disability insurance for your needs

If you're like most people in Canada, you don't think you need the best disability insurance. After all, you're healthy.

But you would be wrong: the prevalence of disability among Canadians rises from 4% among 15-24-year-olds to 43% among people aged 75 and up. So even if you don't need disability insurance now, you have a much better chance of needing it in the future.

And not having it when you need it will get expensive faster than you think.

Let's dispel a few myths about disability insurance, why you actually need to have the best disability insurance sooner rather than later, and what Insurdinary can to to help.


How Disability Insurance Actually Works

When you hear the term disability, you're probably thinking of permanent disabilities. For example, needing a wheelchair to get around.

Because you're thinking of disability this way, you think you don't need the best disability insurance. After all, you're healthy, mobile and active.

That's not quite how disability insurance works, and thinking of it that way will cost you. Think of it this way instead.

Let's say you were recently injured. That injury, for example, a broken leg, prevents you from being able to work for a few months until the injury is resolved. Disability insurance is what will help cover your expenses while you're not being paid to go to work.

We know what you're thinking -- I can afford to not go to work for a little while. That's what savings are for, right?

Not so fast.

Ask yourself this: if you got injured and couldn't work, would your savings plus spousal income be enough to live on (and pay medical expenses) until you could go back to work or start getting retirement benefits?

If the answer is no, then you need the safety net provided by disability insurance.

For other important facts about disability insurance, when to get it and what to expect, check out this article by the AARP.


Short-term versus Long-term Disability Insurance

Now you've reached the stage of considering disability insurance as an important cost. After all, you have insurance for your car and your house - why wouldn't you have insurance in case of accidents?

The next stage is knowing what kind of insurance is the best disability insurance for you. The truth is, there's two kinds of disability insurance: short-term and long-term.

Unfortunately, most people are shortsighted about the costs and benefits of short-term disability insurance.

When you're unable to work because of an injury or disease, short-term disability insurance typically covers up to 60% of your salary for anywhere between 15 to 52 weeks -- no small number when you're unable to work.

Long-term disability picks up once you stop receiving short-term benefits and usually last for up to two years, at which point you must be disabled from performing any occupation to continue receiving benefits.

The problem is that not all employers in Canada offer short-term insurance. Long-term insurance also always comes with a maximum dollar amount, so if you earn a higher salary, you may not get a full 60% of your earnings.

It works similarly in the U.S. - short-term insurance will cover you for up to six months, but only half of all employers offer it. Those that do often don't pay the full premium and require employees to use up sick leave first.

The solution? According to experts, your best option is to supplement with an individual policy if your employer's insurance plan is insufficient.

That's where we come in - we can give you a quote and help find the right disability insurance for you.


Why You Need the Best Disability Insurance

Listen, we hear you: you're healthy, you and your significant other have good jobs, and you're still thinking the best disability insurance is a cost you can afford to skip.

Here's the math that proves why you're wrong, and why that kind of thinking can easily become expensive if you're unlucky.

The Math of Disability Insurance for Younger People

Let's say you make $50,000 per year. In 20 years, that adds up to about $1 million in earnings. Even when we factor in taxes and your annual cost of living, it's still no small chunk of change.

Now let's say you got injured young, diagnosed with an ongoing illness, or otherwise disabled early in life. Let's say that because of that injury, illness, or other major disability, you're suddenly unable to work. Suddenly, working 20 years to earn that $1 million we just mentioned is impossible.

Suddenly, your lifetime earnings have shot down -- at precisely the same time your cost of living shot up. In this situation, you need the best cushion a good disability insurance plan can offer.

The Math of Disability Insurance for Older People

Now, let's say you're older and you become unable to work due to disability. Chances are, you were earning more than you did twenty years ago, and your cost of living has gone up alongside your earnings.

You've also got a house, a car, children -- all the things most people accumulate as we get older. All of these tend to significantly raise your cost of living.

And now you can't afford any of them because you don't have good disability insurance. Worse still, not only are you unable to afford your previous living expenses, you've got people depending on you to pay those living expenses.

All while your cost of living rose even more because of the illness or injury you just sustained. Once again, you need the safety net of a solid disability insurance plan.

Knowing all of this, whether you're 25 or 55, it's hard to argue that you can afford subpar insurance. In fact, you can't afford anything except the best disability insurance.

That's where we come in.


Don't Settle for Average Disability Insurance

Insurdinary knows you have a lot depending on you. That's why we want to help you make the best decision about your disability insurance.

We're proud to offer the lowest insurance quotes in Canada.

It's simple: chose the product you want and fill out your information. An experienced broker will be in contact with you to connect you to a licensed insurance broker for a quote -- instantly.

We work with all the major providers to provide you the best quote -- the best insurance product for you at the lowest rate possible.

Get a quote today to get started.


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