When it comes to personal insurance, there are a lot of options. It can be hard to tell some products apart, as they may seem identical and confusing. But they all have the same goal: to protect you and your assets. That’s why you may want to consider getting disability or critical illness insurance in addition to life insurance. While these two types of insurance have some similarities, they are entirely separate. Each offers solutions and protection for different financial needs.
In this article:
What is disability insurance?
Disability insurance is designed specifically to allow workers (salaried or self-employed) to receive monthly benefits to replace part of their income if they become unable to work due to an injury or illness. This product is available under two types of policies: temporary or permanent disability (see Disability Insurance Briefly Explained for more information). Note that disability insurance provides you with up to 100% of your salary, but the most common choice is to insure for 60% to 70% of your salary. This will help you maintain your standard of living as much as possible until you return to work.
What is critical illness insurance?
Critical illness insurance provides you with a tax-free, single lump sum if you are diagnosed with a serious medical condition, such as cancer, heart attack or stroke. This type of insurance offers a variety of benefits, but policies most commonly provide coverage for the four most frequently diagnosed serious diseases in Canada or for more than 25 serious diseases. To learn more about critical illness insurance, read Critical illness insurance: A requirement? or contact an advisor at Matcha Insurance for guidance.
Who are these products for?
While statistics suggest that the majority of Canadians live paycheque to paycheque, any worker—whether employed or self-employed—should consider disability and critical illness insurance. Especially those who do not have a group plan that provides salary insurance for long-term absence due to illness or injury. We encourage you to contact an insurance advisor at Matcha to discuss your situation, needs and goals. Our advisors can offer you products that will meet your needs.
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When can I get my benefits?
Disability insurance
Critical illness insurance
This varies depending on your policy and the type of coverage chosen. Monthly payments usually begin 30 to 120 days after the onset of disability.
Usually after 30 days. If you survive most of the critical conditions covered by your policy for more than 30 days, the coverage amount is paid to you.
How can benefits be used?
If you are unable to work, disability insurance can help cover your regular expenses. Since this product is designed to allow you to receive a portion of your income, you can use monthly payments to cover current expenses (rent, mortgage, electricity, telephone, groceries, etc.) for the duration of your policy.
However, a serious illness generally comes with unexpected additional expenses (medications, healthcare professional visits, treatment fees, etc.), whether or not you are able to work anyway. Because it’s a lump sum, one-time payment, you can use it as you see fit. You may choose to pay certain bills or expenses related to your condition, get home support for maintenance or even choose to get away from it all while you are recovering by taking a trip. The choice is yours.
To help you make an informed choice about disability and critical illness coverage, we suggest contacting an advisor at Matcha Insurance. They will be happy to help you determine your profile and needs and offer the best product for you.
