1. Becoming disabled is your biggest risk.
The chance you might suffer from a long-term disability in your life is about 50%. That means one in two Canadians will experience a long-term disability in their lifetime. The younger you are, the greater the risk. This is because there are many more years ahead of you to work, and the risk of injury is much higher in younger years. If you do suffer from a disability that lasts longer than 90 days, the average time off work is 2.9 years!
2. Group disability insurance is limited.
Even if you have a group disability insurance policy, chances are you don’t have the full coverage you might think you have. Here are a some reasons why your group disability policy might be limited: you earn bonus or incentive income that is not part of your regular salary, and is not insured; your group plan has limits or a cap on monthly benefits, and your earnings far exceed the monthly cap; you are a professional with specialized skills who would be forced to take ANY type of work after 24 months on disability if you are still not able to do the job you were trained for; your group disability policy only covers TOTAL disability, so if you come back to work part time you lose all your benefits. These are all common examples of the limitations of group disability insurance.
3. Your health is your wealth.
In order to go to work each day and be effective we all need to be healthy. It seems like a cliché, but you really don’t know how valuable your health is until you’ve lost it. When suffering from an injury or illness, it becomes difficult to go to work each day, and income can be reduced or cease altogether. Would your bank understand if you can’t make the mortgage payment because of a disability? Will the utilities company forgive your bills? The answer is NO – and no bank will lend you money while on disability. Remember, you have to buy insurance while you are still healthy. Once you become sick or hurt, you become uninsurable.
4. Your lifestyle depends on your ability to earn an income.
The lifestyle you are accustomed to, and the future dreams you are planning for, depend on your ability to earn income today. The retirement plan you have designed needs to fed each month with your savings. Buying that house, cottage by the lake, RV, etc. all depend on you continuing to earn an income. If income suddenly stops, your future dreams could also go up in a puff of smoke if you are not insured.
5. You don’t want to do a job you hate.
When you are sick or hurt, do you want to be changing jobs? Maybe you can no longer do the job you love, but do some other, easier job to earn at least some income. Would you want to be forced into doing a job that is beneath your skills and abilities because of a sickness or injury? Without proper disability insurance, this is a reality for many people. Even with a group benefits plan, after 24 months on disability claim for your REGULAR occupation, you will be reassessed to see if you can perform ANY occupation, and if so, be forced into that kind of work. This is a terrible situation.
6. Self employed or without group benefits leaves you totally exposed.
If you are self employed or working for a company without any type of disability insurance, you are total exposed to income loss. For almost everyone in this situation, disability insurance is something on their radar, but often just doesn’t get done. People procrastinate. How would you feel if you became disabled while you were, “thinking about getting disability insurance.” Also, people often find the cost of disability insurance too high, and wish they could have the cheap stuff offered through employer group disability policies. Actually, the cheap group disability insurance only seems inexpensive to the employees, because the employer is carrying the bulk of the premiums as an added benefit for working there. There is no cheap insurance. The cost for insurance should strive to be fair. If the insurance company would lose money selling the policies, then they just wouldn’t sell them.
7. You might not always be insurable.
As stated before, 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, you suddenly become high risk. Many people have found out the hard way that they are a high risk for an insurance company. Once you become a “risk statistic” to the insurance companies, one of two things can happen. You could 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 future, the insurance company will feel the same way. Get insurance NOW, while you’re still healthy.
8. You can design a plan to meet your needs.
There are many different types of disability insurance plans. They are highly customizable and can fit your unique needs and budget. There is a lot of complexity to designing the rite disability insurance policy, so be sure to seek out a disability insurance specialist in the insurance industry. There is one thing that is simple – you can’t insure more than you earn. No insurance company wants to give you a reason to stay home, therefore they typically offer about two thirds of your prior earnings in disability insurance benefits. There is an incentive to go back to work: you can earn more. If getting the maximum amount of insurance is too expensive for you, you can always take a bit less. It’s better to have some coverage than none at all.
9. You’re worth more than you think.
Do you know how much you are worth? Have you ever thought of yourself as an economic engine, able to make money for many years to come? Well, if you did, you would see how valuable you are. As an example, if you were 35 years old, making $75,000 and planned work another 30 years, your earnings are worth over $3 Million (assuming a 2% annual increase). You’re definitely worth a lot more than your house or your car, and you don’t think twice about insuring those assets. Insure YOURSELF – you’re definitely worth it.
10. It’s one of the smartest bets you could ever make.
If you like to gamble, you could make a wager on getting or avoiding a disability. Here is how it works. If you bet on having a disability and buy a policy one of two things can happen (50/50 chance): you either become disabled and get a HUGE financial benefit from your plan, or you don’t get disabled and lose the small amount of monthly premium you spent. If you bet on not having a disability and don’t buy a policy, one of two things can happen (50/50 chance): you don’t get a disability and have a few extra dollars each month to spend or save, or you do have a long-term disability, and possibly lose everything you have when you lose your income. Think about the chances and the outcomes carefully, and then you decide how you want to roll the dice.