Confused about disability insurance? Here’s what you need to know
DO YOU HAVE DISABILITY INSURANCE THAT MEETS YOUR NEEDS?
Did you know that one out of every three people will experience a disability rendering them unable to work for 90 days or more before age 65, according to the Canadian Life and Health Insurance Association?
What would happen if you experienced this situation? How could you support yourself and your family while fulfilling your obligations? Disability insurance provides you with income in the event of disability; here, we explore the basics.
WHAT IS A DISABILITY?
Imagine you work in a warehouse but, due to an at-home accident, your foot is in a cast. This injury would prevent you from performing your usual duties, but would not preclude you from performing administrative work. The critical question here is: does your insurer consider you disabled?
“The definition of disability varies from one insurer and one contract to another,” said Julien Michaud, an actuary with the Autorité des marchés financiers (AMF). “This definition may also change after a certain period of disability — for example, two years.”
WHAT ARE THE TWO TYPES OF DISABILITY INSURANCE?
If you buy individual disability insurance — for example, as a self-employed worker —you can choose the characteristics of your policy. Naturally, the more coverage you want to add, the more it will cost you.
If you’re covered by group disability insurance, you will not necessarily have the ability to choose your own individual coverage. And if your employer, union or association assumes a share of the cost of the insurance, the benefits will be taxable.
WHAT DOES YOUR CONTRACT SAY?
The definition of disability, waiting period, duration of benefits, bonuses, percentage of wages paid, and more, can vary significantly from one contract to the next.
“Check what your contract says about all of these elements,” Michaud said. “For example, in the event of disability, will you receive benefits for one year, two years, or until retirement? Also, will you have to continue paying insurance premiums even in the case of a disability?”
HOW DO YOU DETERMINE YOUR COVERAGE NEEDS?
To assess your need for disability insurance, ask yourself if you can maintain a standard of living that suits you and your family in the event of a disability leave. For example, could you meet your needs and various obligations, and continue to repay your debts while saving money for retirement?
“The range of products and various available features demonstrate the importance of shopping around if you’re looking for disability protection,” Michaud said. “Similarly, knowing the extent of any existing coverage is essential in the context of sound financial planning. In all of these cases, a representative can help you understand your situation.”
WHAT TO DO IF YOU’RE DISSATISFIED
In the event that your insurer refuses a claim or offers compensation that you feel is unfair, here are the steps to follow to help find a solution:
First, try to resolve your dispute with the person who is dealing with your claim. Being well-prepared when making your case will help.
If the disagreement persists, the next step is to submit a written, official complaint to the complaints department of the company. In order to simplify this process, you can use the form available on the AMF’s website. The company has an obligation to send you an acknowledgment of receipt, to treat your complaint fairly, and to send you its position in writing. Don’t hesitate to contact an agent at the AMF Information Centre to help with whatever your situation may be.
If you’re still unsatisfied with the outcome of your official complaint, ask your company in writing to transfer your file to the AMF; the company is required to do so if a client makes such a request.
When the AMF receives your complaint file, it will be impartially reviewed. Then, if the situation calls for it, the AMF could provide settlement service. It’s important to keep in mind, however, that the complaint process does not take precedence over any legal deadlines if the disagreement persists.
For more information on disability insurance or to obtain assistance filing a complaint, visit lautorite.qc.ca or contact an agent at the AMF Information Centre by calling 1-877-525-0337.