Disability Insurance Review: What to Look for as a Professional
As a financial advisor, one of the most important aspects of our job is to review our clients’ insurance policies to ensure they are adequately protected in the event of a disability. This is especially important for professionals like lawyers and doctors who have a high earning potential and need to make sure their income is protected.
When reviewing a disability insurance policy, here are some key components we look for:
- Definition of Disability: It is important to make sure the policy defines disability in a way that is appropriate for the client’s profession. A policy that defines disability as the inability to perform any occupation may not be suitable for a highly skilled professional.
- Benefit Period: The length of the benefit period, or the amount of time the client will receive benefits if they become disabled, should be considered. A longer benefit period may be more appropriate for a client with a high earning potential.
- Benefit Amount: The benefit amount should be sufficient to replace a significant portion of the client’s income.
- Own Occupation vs. Any Occupation: Look for a policy that provides benefits for disability resulting from the inability to perform the client’s own occupation, as opposed to any occupation.
- Non-cancelable and Guaranteed Renewable: It is good to find a policy that is non-cancelable and guaranteed renewable, meaning that the insurer cannot cancel the policy and the premiums cannot be increased.
- Inflation Protection: The policy should include an inflation protection rider that increases the benefit amount to keep pace with the cost of living.
- CPP Integration: In Canada, it is important to check for any integration or reduction of benefits that may occur through the Canada Pension Plan (CPP) disability benefit. This means that if the client is eligible for CPP disability benefits, it may offset the amount of benefits they receive from their private disability insurance policy.
- Residual Benefits: Consider a policy that pays residual benefits if the client is able to work but has a reduction in income.
- Waiver of Premium: Look for a policy that waives the premium payments if the client becomes disabled.
- Rehabilitation Benefits: Check if the policy includes benefits for rehabilitation and retraining to help the client return to work.
It is important to note that these are just some of the key components to look for when reviewing a disability insurance policy. Each client’s needs are unique and it is important to conduct a comprehensive review to ensure they are adequately protected.
As a financial advisor, we understand the importance of protecting our clients’ income and we take a thorough approach when reviewing their disability insurance policies. By considering the above components, we can ensure that our clients are adequately protected and can have peace of mind knowing that their income will be secure in the event of a disability.
Insurance products and services are provided through Assante Estate and Insurance Services Inc.
As a financial advisor, one of the most important aspects of our job is to review our clients’ insurance policies to ensure they are adequately protected in the event of a disability. This is especially important for professionals like lawyers and doctors who have a high earning potential and need to make sure their income is protected.
When reviewing a disability insurance policy, here are some key components we look for:
- Definition of Disability: It is important to make sure the policy defines disability in a way that is appropriate for the client’s profession. A policy that defines disability as the inability to perform any occupation may not be suitable for a highly skilled professional.
- Benefit Period: The length of the benefit period, or the amount of time the client will receive benefits if they become disabled, should be considered. A longer benefit period may be more appropriate for a client with a high earning potential.
- Benefit Amount: The benefit amount should be sufficient to replace a significant portion of the client’s income.
- Own Occupation vs. Any Occupation: Look for a policy that provides benefits for disability resulting from the inability to perform the client’s own occupation, as opposed to any occupation.
- Non-cancelable and Guaranteed Renewable: It is good to find a policy that is non-cancelable and guaranteed renewable, meaning that the insurer cannot cancel the policy and the premiums cannot be increased.
- Inflation Protection: The policy should include an inflation protection rider that increases the benefit amount to keep pace with the cost of living.
- CPP Integration: In Canada, it is important to check for any integration or reduction of benefits that may occur through the Canada Pension Plan (CPP) disability benefit. This means that if the client is eligible for CPP disability benefits, it may offset the amount of benefits they receive from their private disability insurance policy.
- Residual Benefits: Consider a policy that pays residual benefits if the client is able to work but has a reduction in income.
- Waiver of Premium: Look for a policy that waives the premium payments if the client becomes disabled.
- Rehabilitation Benefits: Check if the policy includes benefits for rehabilitation and retraining to help the client return to work.
It is important to note that these are just some of the key components to look for when reviewing a disability insurance policy. Each client’s needs are unique and it is important to conduct a comprehensive review to ensure they are adequately protected.
As a financial advisor, we understand the importance of protecting our clients’ income and we take a thorough approach when reviewing their disability insurance policies. By considering the above components, we can ensure that our clients are adequately protected and can have peace of mind knowing that their income will be secure in the event of a disability.
Insurance products and services are provided through Assante Estate and Insurance Services Inc.