Long-Term And Short-Term Disability Insurance: What’s Best For You?

Studies indicate that 1 in 5 Canadians suffer from a disability and 30-64 percent of employees are likely to suffer a disability for a period of greater than 90 days during their entire working period. Further research indicates that you’re more likely to suffer a disability than you’re likely to die as you progress through your career. For this reason, long-term and short-term disability insurance is essential to protect you from the financial turmoil involved when you’re unable to work and provide for your family.

However, shopping for the right insurance requires extensive research and consultation. When seeking Health Insurance, Cancer Insurance, or Salary Insurance, you have to understand the difference between long-term disability insurance and short-term disability insurance to make the right decision based on your needs. Read below more for information and check out to learn even more about the types of insurance available.

Short-Term Disability Insurance

Just like the name suggests, short-term disability insurance covers you when you temporarily lose your ability to work due to a less serious health condition such as a minor injury or after minor surgery. Once your claim is approved, you’ll receive a portion of your income in weekly portions to help pay for basic expenses such as rent/mortgage, utilities, and childcare.

Once you obtain this short-term disability insurance through your employer, you can easily manage your expenses without solely depending on your savings. However, if your employer does not provide this type of insurance, you don’t have to worry; you can rely on federal Employment Insurance (EI) disability benefits. Depending on your coverage provider, you may begin to receive your benefits as soon as one week to one month from the time you’re unable to work.

Long-Term Disability Insurance

This type of disability insurance covers you when you lose your income due to a persistent or chronic health issue such as serious back injury, cancer, heart attack, or stroke. Usually, this coverage kicks in once you’ve depleted your short-term coverage. A VA calculator can be quite helpful in this case.

Long-term coverage may last about 2-5 years although some may last up to 65 years; the standard retirement age. Once your claim is approved, you will receive a portion of your income in monthly portions to pay for basic expenses. Depending on your insurance provider, you may begin to receive disability benefits within a few months after approval.

How Much Would You Need To Cover Your Expenses?

If you’re wondering how to determine the amount of replacement income you need, the answer is simple. Just add up your monthly expenses, then review what your employer is providing to determine the amount of replacement income you’re eligible for. Based on your product plan, you may have the option to choose the percentage of your income that you’d like to receive as your replacement income.

You may also have the option to select a specific dollar amount up to the allowable maximum. If you prefer to use the percentage of your income, use the formula below to determine how the amount of income you may receive.

Formula: Monthly Income x Prefered percentage of income = Potential benefit amount: 

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