Good day everyone. Many of our friends and clients have asked us: “What is the difference between Disability Insurance and Critical Illness Insurance?” This article from Yahoo! Finance Canada uses an analogy I like. Please read and let us know if we can get you more details.
Dynamic insurance duo keeps you covered
From superheroes (Batman and Robin) to supercops (Starsky and Hutch), dynamic duos have helped keep us safe, secure and covered — at least in the pop culture world of our childhood. In real life, we rely more on other dynamic duos like foundation and concealer, or sunscreen and a fashionable floppy hat. One just seems to enhance the other and does what the other can’t. Apply that logic to insurance coverage and you start to see why disability and critical illness insurance can be classified in the dynamic-duo category.
Many Canadians have disability insurance through their employers. If you’re one of them, you’ll get replacement income in the event of a serious illness or injury during your working years. That’s a great relief. But is it enough? Do you also need critical illness insurance? Read on to find out.
|Disability Insurance||Critical Illness Insurance|
|Waiting Period||Generally between 30 and 180 days||30 days|
|Benefits||A preset percentage of income, paid monthly, usually for a limited time||Pays a lump sum from $10,000 to $1 million|
|Taxation||Benefits are taxable to employees if they are funded by their employers; tax-free if self-funded||Benefits are tax-free|
|Coverage Period||Usually to age 65 or until retirement||Up to age 100|
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