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GUEST EXPERT. Life is full of unforeseen events, unfortunately not always positive. Did you know that disability is one of the biggest financial risks a person can face before retirement? Being unable to work, for several months or several years, can bring its share of daily problems. Surviving physically is one thing, but surviving financially is another. If you have disability insurance, your torment will be alleviated, as long as you take care to avoid the following pitfalls.
Trap # 1: Underestimating the risk of having a disability
“It only happens to others”. Many people repeat these words to themselves, believing that they are unlikely to have this happen to them… as something that only happens to others.
Unpopular among insurance products and often overlooked by many workers, disability insurance is essential. It allows you to benefit from a replacement source of income when you are unable to work due to illness or accident.
And the statistics show that the risk is there. In Canada, 1 in 3 workers aged 30 to 64 will experience a period of disability during their career. It’s a think about it!
Trap # 2: Deferring the purchase of disability insurance
Human nature means that we often put off things we don’t like. Do not fall into this trap, as it could have serious consequences on your finances.
You should know that several factors (state of health, age, type of job, sex, etc.) are evaluated by insurers to determine the cost of disability insurance premiums. The longer you wait, and therefore the older you get, the more expensive disability insurance becomes. In addition, you run the risk of having a health problem in the meantime that could make your premium even more expensive or even make you ineligible for disability insurance, because of your medical history. In any case, it rarely pays to wait.
Trap # 3: Having insurance that is inadequate to your needs
In Quebec, several insurers offer disability insurance contracts, but it would be wrong to believe that all products are the same. From one policy to another, the definition of disability may vary, the elimination period may be different, the calculation of benefits payable according to income may be done differently, etc.
It is therefore important to check with a financial security advisor or financial planner that your policy is suitable for your personal and financial situation. A well-tailored policy will save you additional stress in the event of disability.
Mistake # 4: Not reassessing your needs periodically
Life changes quickly, and we often forget how important it is to take a few minutes to ensure that your insurance coverage still meets your needs. If you’ve just got married, had a baby, bought a property, changed jobs, or had some other significant life event recently, now is a great time to reassess your disability insurance with help. from a professional.
The goose that lays golden eggs
In conclusion, don’t forget that you are the goose that lays the golden eggs. Your ability to earn an income is by far your most valuable asset and it would be bad not to protect it well. You must see it today!
Pascal Duguay, Pl. Fin., MBA
www.lesaffaires.com