Disability and critical illness:
living benefits
What are living benefits?
Living benefits are paid while the insured person is alive. The two main kinds of living benefits insurance policies: disability and critical illness.
DISABILITY INSURANCE – Protect your income
This benefit is payable when, because of an illness or accident, a doctor declares you as disabled for work which results in your loss of income.
Sarah, 31: beauty salon owner
Sarah, who loves trekking, sprained her ankle this summer. Despite her best efforts to keep on working, the long hours on her feet only made the pain worse. She finally had to step down. Her absence will not be good for her business and bills will keep coming.
CNESST: Sarah is not eligible for benefits because her accident happened during a leisure activity. It is important to know that CNESST does not pay disability benefits for an accident that is not work related.
Employment Insurance (AE): Unfortunately, Sarah is also not eligible for AE benefits because she has not yet accumulated the 600 hours in 52 weeks required. This kind of situation is common among independent professionals and family or small business owners.
Provincial or federal aid (RRQ/RPC): Sarah would only be eligible for benefits if her injury was determined to be critical or prolonged.
Critical Illness Insurance — Financial support for difficult times
Critical Illness pays a lump sum (one payement) usually 30 days after you have been diagnosed with a critical illness covered by the policy.
Julian, 47: Electrician
In his last annual check-up, Julian’s family doctor ordered additional tests that confirmed the first stages of lung cancer. Julian is married with two young children, has a mortgage and is the main support of his family, the illness affects not only his health but puts his finances under serious strain.
Emergency funds. – Julian has $15,000 on a savings account, but this amount only covers the family’s basic needs for a few months.
Government benefits. – The benefits he is eligible to receive represent a small amount that will be paid on a weekly basis.
THE SOLUTIONS FOR SARAH AND JULIAN
Sarah
A few days before suffering her injury, Sarah subscribed disability insurance after reading the convincing arguments of a post on social media that targeted small business owners. The insurance company considered her annual income which allowed Sarah to subscribe the highest benefit amount. During the time she was disabled, Sarah received enough to pay for her monthly overhead expenses.
Julian
After his first son was born and following the recommendation of his financial security advisor, Julian subscribed a life insurance with a critical illness protection. The $50, 000 lump sum payment from the claim, gave him the financial relief necessary to concentrate on his treatment.
THE UNFORESEEN EVENTS THAT STRIKE OUR LIVES
A critical illness or accident can happen at any time. Having the necessary protection to face the consequences of a life-changing event is not a decision to take lightly. Get advice from a professional financial security advisor to make sure you are making the right choice.
“Should’ve” usually conjugates with regret.
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