Disability insurance is an insurance policy taken by both individuals and groups to provide a benefit to a policyholder if they get a disability that affects their ability to continue under their occupation. The benefit is provided periodically, usually monthly, for a term determined at the beginning of the policy contract. The policies differ significantly based on duration of compensation, percentage of income to be compensated, type of occupation of the policyholder among other factors.
Individual Versus Group Cover
Group disability insurance policies are taken by companies and employers seeking to have added benefits to their employees. The policy type and coverage depend on the employers negotiation and preference. No medicals are taken for group disability insurance Canada cover and underwriting is usually done on the risk exposed to the whole group based on type of occupation. On the other hand, individual critical illness insurance is taken by individual seeking to cover personal disability. The individual will need to take a medical and their family history will also be scrutinized. However, the individual policy comes with optional extras that an individual may choose to add to the policy at an extra premium cost.
Long Term Versus Short Term
There are two types of term disability insurance policies available for both group and individual policies. A short term disability insurance policy covers only for a given period of time and it is ideally taken to help cushion against the events of disability and to help you cope with the financial implications of the disability. The cover lasts from 1 to 2 years. People in manual work, construction site and other physical labor occupation will normally have a short term disability policy taken under a group cover. On the other hand, the long term disability insurance Canada policy provides cover as long as an individual cannot work and earn a living because of disability. The monthly allowance for the long term disability insurance policy is usually a percentage of the individuals final income before disability with the percentage varying based on policy type.
Own Occupation Versus Any Occupation Cover
In most policies and especially so the group long term disability insurance, the policy is set such that it provide for 2 years of “own” occupation coverage and thereafter, it will be an “any” occupation coverage. “Own” occupation refers to your particular profession or job profile in the workplace that you worked prior to the disability. “Any” occupation refers to any work that you can undertake. The main aim of a disability insurance is to cover you financially for the period of time that you cannot earn an income because of your disability. The disability insurance Calgary or disability insurance Toronto company will therefore seek to have you re-trained and restored to an occupation that you can get engaged in to provide you with a livelihood. Therefore, depending on your disability, the disability insurance Ontario company will provide you with payout for 2 years as they seek to reposition you for “any” occupation. If you are not able to perform any occupation after the two years, you will be compensated for inability to do “any” occupation. The insurance company will also nil out any amount or disability benefits that the policyholder receives from the government.
Additional Features and Benefits
Most additional features and benefits that come with the disability insurance Canada policy come with individual life disability insurance. The additional benefits includes a one time lump sum benefit that is given to the policyholder for life adjustment, coverage for overseas medication, coverage for a nurse or home attendant among other additional benefits. These additional features and benefits of the disability insurance are optional and come at an extra cost.