Disability insurance 101

Here is an overview of what you need to know about disability insurance: 

1. What is disability insurance? Disability insurance is a type of insurance that provides financial benefits to individuals who are unable to work due to a disability. Disability insurance can help individuals and their families cope with the financial consequences of a disability, which can include lost income, medical expenses, and other costs associated with living with a disability. 

2. Who can benefit from disability insurance? Anyone who relies on their ability to work and earn an income can benefit from disability insurance. This includes individuals who are working and earning a salary, as well as self-employed individuals and business owners. 

3. What types of disability insurance are available? There are several different types of disability insurance available, each of which offers different levels of coverage and protection. Some common types of disability insurance include: 

1. Short-term disability insurance: Short-term disability insurance provides coverage for a limited period of time, typically 3 to 6 months. It is designed to provide financial protection in the event of a short-term disability that prevents an individual from working. It can be called Income Protection, Total and Temporary Disability or Salary Continuance. 
2. Long-term disability insurance: Long-term disability insurance provides coverage for a longer period of time, typically 2 to 5 years or more. It is designed to provide financial protection in the event of a long-term disability that prevents an individual from working. 
3. Group disability insurance: Group disability insurance is typically provided by an employer as part of a benefits package. It provides coverage to a group of individuals, such as employees of a company, and is usually less expensive than individual disability insurance policies. This is typically life or total and permanent disability insurance (TPD). 

4. How does disability insurance work? Disability insurance policies typically provide a percentage of an individual’s income in the event of a disability that prevents them from working. The percentage of income covered and the length of time for which benefits are paid can vary depending on the policy. Some disability insurance policies may also provide coverage for medical expenses and other costs associated with a disability. 

5. What factors should I consider when purchasing disability insurance? When purchasing disability insurance, it is important to consider your personal circumstances and financial needs. Some factors to consider may include your age, occupation, income, and overall health. It is also important to carefully review the terms and conditions of the policy, including the exclusions and limitations, to ensure that it meets your needs and provides the right level of protection.