Reviewing your Disability Insurance and Protecting Against the Catastrophic

Ryan Smillie

September 11, 2020

When most people think about disability claims they think about broken bones and other physical injuries that usually heal with time, when some of the most common disability claims come from cancer, cardiac and mental health issues that do not go away.  Due to cost constraints many insurance plans will put emphasis on the first 2 years of a disability or injury with own occupation* coverage for 24 months and then any occupation** coverage until age 65 or earlier. Even though, most group benefit plans include disability coverage for employees, and most self-employed individuals have some form of disability coverage, not all policies and coverages protect against the catastrophic. In many cases, people suffering from disabilities that are not back to full heath after 24 months and unable to go back to their regular job are forced into doing a lower level job at lower pay or receive a reduced or eliminated disability payment. If the disabled still has several years of work left being reduced to any occupation can mean a significant lifestyle reduction and alteration of financial goals.  We recommend looking at your disability coverage and if you do not have own occupation until age 65, take a serious look at topping up coverage.

Key disability terms:

*Own Occupation disability: Covered when the insured is unable to perform most of the occupational duties they have been trained to perform in their regular job.

**Any occupation disability: Covered when the insured is unable to work in any occupation that they’re reasonably qualified for.

Waiting period or elimination period: The period of time between the onset of your disability and when you begin receiving long-term disability benefits (usually 90 to 120 days)