TORONTO -- Prior to COVID-19, insurance was always about the probability factor. You may have thought to yourself: The odds are something is going to happen to someone else -- not me. And then COVID-19 hit: a pandemic and along with it a stark reality that something could happen to you. Illness could hit and destroy our ability to work and earn an income.
Think about it, if you suddenly found yourself unable to work without disability coverage, even if you had saved 10% of your savings each year, only six months off work would wipe out 10 years of savings.
People often think of a disability as a big one-time traumatic event. Sure, that could happen, but a chronic condition such as arthritis or even depression could also flare up, compromising your ability to work.
Ignorance isn't bliss and disability insurance is the one thing that could protect you and it is so often misunderstood.
Few people take the time to really understand their employee benefits and more specifically what they are covered for. Many assume should something happen to them and they were unable to work they would be ok. Sadly that isn't always the case. There can be insufficient coverage resulting in gaps in income, limited periods of protection and even issues arising that could result in the end of protection before the need has expired.
Add to this, if a job loss has occurred gone with the job is not only our loss of income but often a loss of benefits leaving you financially vulnerable.
Current statistics tell us that one out of three working Canadians will suffer a disability longer than 90 days during their working lives.
You owe it to yourself to explore your insurance options and understand your protection.
Insurance is a key component of a financial plan; however, there are many layers to it. We don't think twice about insuring our home, our cars and maybe even our jewelry. But what about our ability to earn an income? Statistically, a disability is far more common than your home catching fire. And while you might think your home is your most valuable asset I would argue your most valued asset is your earning potential.
According to Eric Benchetrit, a financial services industry consultant, "if disabled, a 35-year-old earning $48,000 per year could stand to lose over $3M by age 65 (assuming a 3% increase per annum)." Without disability coverage the financial loss could be catastrophic.
A disability could strike when you least expect it. We are living through a period of unprecedented stress, uncertainty and no one knows for certain what tomorrow will bring. As Lorne Marr, director of Business Development at Hub Financial and founder of www.lsminsurance.ca said to me via email, "the pandemic has magnified the need for income protection as most Canadians simply do not have the financial safety-net to weather a disability."
We all could use a little peace of mind right now. Disability insurance deserves a place in all of our portfolios. Why? Because insurance is best if never used and invaluable if you need it.
