There is a lot of misinformation circulating when it comes to disability insurance. In order to make smarter decisions regarding your coverage, you need to know the facts and the options available to you. To help keep you on track, here are six common myths about disability insurance and why they are false.
Myth 1: “If I’m injured outside of work, I’m still covered by my employer.”
This is only true if your employer has a group disability policy to cover employees.
Myth 2: “My disability will always be paid for in full through workers’ compensation.”
Workers’ compensation does not always cover all the costs. For example, if you work for a small business in Ontario, you may not be covered under the Workplace Safety and Insurance Board (WSIB). Workers’ compensation will only cover a portion of your earnings before your accident and some medical expenses such as prescription drugs, physiotherapy, rehabilitation, and training.
Myth 3: “I don’t need disability insurance since the chances of becoming disabled are low.”
The risk is higher than you think. According to the Association of Workers’ Compensation Boards of Canada, an average of 672 workers were injured every day on the job in Canada in 2012. In fact, becoming disabled is more likely than being involved in a car accident or having your house burn down. That’s why if you feel it’s practical to have life and home insurance, then it’s equally important to have disability insurance.
Myth 4: “I should have multiple disability insurance policies, so I can cash them all out.”
Unlike critical illness insurance, your disability insurance policies are not set up this way because they are linked to your income with a capped value. Your policies will usually cover a certain percentage of your income, around 50 to 70 per cent.
Myth 5: “I don’t need individual disability insurance if my employer provides us with a group policy.”
A group disability insurance plan is an excellent way for a business to protect its employees, but will not cover you entirely. Understand a group plan’s exact conditions, what it provides and the percentage of your salary it covers. Remember, group insurance coverage ceases if you stop working for your employer.
Myth 6: “Like life insurance, disability insurance is paid out in one lump sum.”
Disability insurance is issued in regular payments while you are away from work with a disability. It does not offer a one-time lump sum like life insurance does. It is meant to substitute for all or part of your income, depending on your plan.
If you are looking for professional help finding the right disability insurance plan for you, look no further than Elite Private Wealth. Give us a call today at 905-907-4614 or find out more here.