The decision to take out insurance is not a simple one. It must be based on your specific situation, financial status, your needs, type of employment, among others.
To help you evaluate your needs and make the right decision concerning your insurance coverage, we have gathered some of the most common FAQS about disability insurance to guide you.
Who should buy disability insurance?
Although the majority of workers can benefit from disability insurance, the people who would have a greater need for it are:
- People performing physically demanding work
- Parents
- Sole breadwinners
- People with chronic injuries
- People with a history of mental health problems such as depression or anxiety
- People with medical conditions that could render them temporarily or permanently disabled.
Should disability insurance match your income?
While most of us would want disability insurance benefits to cover 100% of our income, it is not possible.
Disability benefits are generally based on how much money you make but it cannot be more. The usual percentage is from 50% to 80% of your average salary.
For example, if your salary before taxes is $8,000, your disability benefits can be up to a maximum of $6,400.
How can I use disability insurance benefits?
Disability insurance benefits can be used to pay your rent or mortgage, loan payments, living expenses, medical bills, and more.
Do I need disability insurance if I have coverage at work?
Most workers in Quebec are covered by group insurance from their employers. These plans vary depending on your company. It is important to understand that your group insurance coverage ends if you quit your job. It is a good idea to get an individual insurance policy to augment your group insurance and make sure you have coverage even if you lose or quit your job.
Are disability insurance payments tax free?
If you pay for your disability premiums entirely, you can receive tax-free disability benefits. This means individual policyholders don’t get taxed. For group insurance, if the employer pays part of the premium or all of it, the income from disability insurance is subject to tax.
What is short-term disability insurance?
Short-term disability insurance provided disability benefits up to a maximum of 6 months.