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Question:

Five essentials of disability coverage

Answer:

Disability insurance* protects your income if an illness or injury prevents you from working. Whether you're insured on your own or through a benefits plan, here are five essential things to know about your coverage:

1. Waiting period. Some plans start paying out within 30 days following an injury or illness, while others have a waiting period of up to six months. If you were to develop a chronic condition with flare-ups, find out if the waiting period would apply each time.

2. Amount of benefit. Disability policies pay either a set amount or a percentage of your income, often ranging between 40% and 80%. Some plans pay out more initially, and then reduce the amount. Others are indexed to inflation.

3. Tax status. If you pay your own premiums in a workplace-sponsored insurance plan, benefits are not taxable. If your employer pays the premiums, however, any income would be taxed.

4. Definition of disability.  The most comprehensive plans cover you if you can no longer work in your own, chosen occupation. Other plans cover you only if you can no longer work in any occupation.

5. Duration of benefit. Options generally range from two years to age 65, or retirement.

Professional advice can guide you through the fundamentals of disability coverage or highlight how a plan can be tailored to your needs.


Give us a call or visit your nearest branch.

* This article is brought to you by Credential Financial Strategies Inc., available through Synergy Credit Union. Credential Financial Strategies Inc. is a member company under Credential Financial Inc., offering financial planning, life insurance and investments to members of credit unions and their communites. Your insurance contract will provide details of coverage available under the plan you choose. Restrictions may apply.

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