DISABILITY INSURANCE ADVISOR
MISSISSAUGA

Keeping Your Income Safe When You’re Unable to Work

The appropriate disability insurance in Mississauga offers the necessary financial support when you are unable to work due to illness or injury. Disability insurance covers about 60% to 85% of your income so that you can still afford to pay mortgage, rent, groceries, utilities and other financial obligations rather than relying on debt and draining your savings.

Types of Disability Insurance Coverage

• Short-Term Disability Coverage

Short-term plans are meant to financially support you in times when you are temporarily unable to work. This may involve taking leave to undergo surgery, illness or even a severe mental condition, such as anxiety or depression or even maternity leave.

Here’s what to expect from the process:

• A 9 to 52 weeks of benefit periods (13 or 26 weeks is standard)
• A waiting period of 0 to 14 days after the disabled period begins, after which you start receiving payments
• The payment substitutes for at least 60% to 75% of your earnings

Short-term coverage is best suited in cases where recovery is possible with time and treatment.

• Long-Term Disability Coverage

Long-term coverage is a protection against lost income due to health conditions preventing you from working long-term or permanently. This may be cancer, a heart attack, neurological diseases such as MS, a serious injury, chronic pain or even serious mental illness.

Here’s what to expect from the process:

• Enjoy coverage benefits for a period of 2 years, 5 years, or until retirement
• A 90 to 180-day waiting period precedes the initiation of benefits
• “Disability” may have different meanings; some policies cover you when you cannot perform the responsibilities in your existing job, while other policies may require you not to perform any job, despite being qualified

Why Should You Consider Both Options?

Many Mississauga residents combine short-term and long-term disability coverage to benefit from uninterrupted protection. Short-term policies cover you during the initial months, and long-term policies provide financial coverage in case the recovery period is longer than anticipated. 

Benefit Amounts

The benefits payout under disability insurance in Mississauga are generally a proportion of the individual’s income earned before the period of disability. It covers at least 60 to 85 percent of the normal earnings, which may vary depending on your policy. It serves as a replacement for the income, covering most of the ongoing financial obligations (like mortgages, rents, utilities, groceries or other expenses). It helps individuals to put their lives on track when they cannot earn their daily income.

Waiting Periods (Elimination Periods)

There is a significant waiting period for every disability insurance policy in Mississauga, often referred to as the elimination period. It is the period between your disability and the commencement of the benefits payment. Waiting periods may vary depending on the policy chosen; generally, they are 30 days or longer, taking several months.

To summarize:

• The shorter the wait time, the higher the premiums, but benefits commence earlier.
• The longer you wait, the lower your premium will be; however, you will have to pay out of pocket in the interim before your payments begin.

Policy Terms & Renewability – Disability Insurance Mississauga

It is worth noting that when planning your disability insurance in Mississauga, you should be aware of how the policy terms and renewal options may impact your long-term stability and sanity. Various forms of policies offer different levels of security, including your right to renew and changes to your premiums.

The different renewal options include:

• Non-Cancellable Policies
  As per the terms of these policies, your insurer cannot cancel your coverage or increase premium rates at any time, provided you are paying your premiums on time. It assures you of protection by maintaining steady rates and benefits throughout the policy’s lifetime.

• Guaranteed Renewable Policies
  In a guaranteed renewable policy, the policyholder has the general right to make changes to their coverage. However, your insurer may raise the premium amounts, provided it does so for a broad number of policyholders. It is flexible and offers long-term security, although the rates may vary over time.

Additional Riders (Policy Enhancements)

While exploring coverages for disability insurance in Mississauga, it is important to check optional policy riders that can improve the protection you are getting from your insurance and meet your future financial needs. It acts like an additional layer of security when basic policies may be insufficient. 

The common options include:

1. Cost-of-Living Adjustment (COLA) Rider
   It helps keep your benefits steady, even in times of inflation. Once you start receiving benefits after the disability, the amount increases on a yearly basis as per the Consumer Price Index (CPI) or at a fixed rate (generally 3%).

2. Partial (or Residual) Disability Benefits Rider
   A partial disability benefits rider provides security when the individual is still able to work but with a compromised capacity. If you are partially disabled, affecting your ability to earn a full wage, this rider offers you a residual benefit to cover the income gap.

3. Future Increase Option (FIO) Rider
   This is a flexible rider, allowing you to make changes in your coverage as your earning potential increases, without requiring medical underwriting. It allows you to increase your coverage annually or when you have achieved certain milestones in your life. However, the limit is preset, regardless of whether there has been an improvement in your health.