By Madeleine Maltese
The essential concepts to fully understand your disability insurance contract and the protection you could benefit from.
Have you decided to take out long-term disability insurance? Congratulation! You have taken an essential step towards protecting your financial future.
Your insurance will provide you with benefits if you become disabled due to an accident or illness.
What is disability insurance?
How much disability insurance do we need?
But beware: the keyword here is “total disability” and its meaning. You should know that total disability is not determined by your doctor’s diagnosis but by the definition of total disability stipulated in each long-term disability insurance contract. Read yours carefully. You will find that the purpose of total disability generally covers two degrees of disability, that of your regular job and that of any other job.
The “date of change of definition.”
Usually, at the onset of disability, the insurer will consider you disabled if you cannot perform the primary duties of your regular job. But on the definition change date (which most often occurs after 12 or 24 months, depending on your contract), you will only be considered disabled if you cannot perform any gainful activity suitable for training or the experience you have or could acquire. This change in definition significantly alters your right to receive benefits.
If you can no longer return to your old job but can work in another occupation, you will no longer be considered disabled – and you will stop receiving benefits.
In other words: Read your contract carefully to fully understand the protection you have and what to expect in the event of disability.
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