Carrey Financial Group    (204) 771-9211
Winnipeg, Manitoba

Privacy Policy

Disability Insurance

What is Disability Insurance?

Disability insurance provides protection against a disability by paying a monthly benefit when you are unable to work (as opposed to Critical Illness benefits, which pay out a lump sum of cash even if you are able to go back to work).

Why do I need Disability Insurance?

Accidents and illnesses* are a fact of life. They could happen to anyone at any time.

*NOTE: A Disability Illness can be different from a critical illness. See Critical Illness Insurance for more information on how to financially protect yourself if you are diagnosed with a critical illness.

Did you know?

• 1 in 3 people, on average, will be disabled for 90 days or longer at least once before age 65.
• The average length of a disability that lasts over 90 days is 2.9 years.

If you become disabled, you may be unable to earn your regular income, and your ability to pay bills or save for retirement may decline. A Disability Insurance plan is designed to help you meet your income requirements so you can concentrate on recovering from your disability and returning to an active life.

Income protection with Disability Insurance is available for employees, professionals, business owners, business executives, and full-time, part-time or home-based workers. Whether you need to secure your main source of income or you want to supplement the coverage you receive from your employer or an association, a Disability Insurance plan can help you throughout your working years.
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What type of coverage is available?

Generally, a disability is caused by an accident or illness. You can get insurance that covers an accident only, or accident and illness.

Disability benefits are classified as either short-term or long-term:

• Short-term Disability Insurance (otherwise known as weekly indemnity) provides income for the early part of a disability. A common length of time for short-term Disability Insurance is two weeks up until 150 days.

• Long-term Disability Insurance replaces lost income for an extended period, and goes into effect after the short-term Disability Insurance has ended. It often ends after five years, or when the covered person turns 65, depending on the policy.

General Disability Insurance Features

• Replacement income if you become ill or are injured.
• Disability Insurance varies, depending on your occupation: the more dangerous your job, the higher the premiums and limitations.
• The amount of coverage usually can't be more than 2/3 of your current earnings.
• The paid benefits from an insurance claim may be tax free.
• Benefit period can vary, anywhere from 2 years, up until the age of 65.

Do you know your Income Replacement Ratio (IRR)?

Knowing your IRR helps you decide if you will have enough insurance to maintain your standard of living for you and your family in the case of unexpected life events.
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How to determine YOUR Income Replacement Ratio

Step 1 From your last year's T4 slip (line 14), note your income (for example, $110,000 annual income).

Step 2 From your Employee Benefits booklet, or individual Disability Insurance policy, note your monthly disability benefits (for example, $3200 per month coverage).

Step 3 Finally, determine your Income Replacement Ratio using the following calculation:

X 12 months
= $38,400
= 35% of current income ($110,000)

Your Income Replacement Ratio would be 35% of your income today (which is $38,400 in the case of the example).

Can you live on this amount?

Knowing your IRR can help you make informed choices about the amount of insurance you need. Contact our office for an appointment to discuss how we can ensure you're appropriately covered.
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