Disability insurance policies can be complex. What are the policy features you should be aware of?

Below is a list of the key features found in most disability insurance policies and what you should know about each:

1. Disability Benefit – the monthly amount you will receive if you are unable to work due to illness or injury.
2. Elimination Period – the amount of time between the on-set of disability and the day you become eligible to receive the disability benefit; 30, 60, 90, 120, or 180 days are the most common elimination periods.
3. Benefit Period – the amount of time that you can receive disability benefits for.  Options commonly include: 2 years, 5 years, or to age 65.
4. Occupation Class – occupations will be “graded” on a scale from “B” all the way to “4A,” the latter being the highest.  The premium will be reduced with a higher occupation class.  The occupation class rating does not only take into consideration the risk class of your job; it also factors in years of experience and earnings.

Items # 1 – 3 above are customizable by the policy owner and will have a direct impact on the cost of the policy.  In addition to these factors:

• “Riders” can be added on to the policy for further customization.  Some examples include:
  1. A “Cost of Living” feature that, while disabled, will increase your disability benefit to keep up with inflation
  2. “Future Income Option,” a feature allowing the policy owner to increase their disability benefit at scheduled intervals without needing to prove health status (insurability)
• Like other forms of life & health insurance, a variety of factors will determine someone’s eligibility to qualify for a disability insurance policy.  Some components that determine the cost and eligibility include:
  1. Age
  2. Gender
  3. Smoking status
  4. Medical history
  5. Driving record
  6. Family history

Contact Jeff Graham at (604) 363-7549 or jeff@firstoakfinancial.ca for more information on disability insurance or to get started on an application.

DISCLAIMER: This article is not meant to decide claim eligibility.  The terms and conditions of your own policy or any Group Benefits Plan will determine your qualification for any disability benefits. This commentary is provided for general informational purposes only and does not constitute financial, insurance, investment, tax, legal or accounting advice.