Who Needs Disability Insurance?

Question: I work as a truck driver and I have been thinking about buying disability insurance for some time now. If I get hurt on the job and cannot work for a few weeks, I would not be able to make the payments on my truck. If I lose my truck, my family will not have any source of income at all. Some of my buddies say there is no point in buying disability insurance because you have to be a vegetable for the rest of your life before you can claim anything. Is this true? They also say the premiums for truck drivers are out of sight because our jobs are so dangerous. How would you classify me?

Answer: Each company has its own classification designation, but truck drivers are usually classified as being in a riskier occupation. Therefore, you can expect the premiums to be higher than for a clerical worker in an office environment - that is, higher but it can still be affordable, even with the recommended optional benefits.

According to the Canada Pension Plan (CPP), a contributor is regarded as disabled if the contributor has a physical or mental disability which is "severe and prolonged". This means a disability which is long-term and prevents them from doing any type of paid work on a regular basis.

Individual contracts generally contain a less restrictive definition and a presumptive clause. You do not have to be fully incapacitated. Disabilities such as back, heart problems, cancer or other medical conditions can result in income from disability plans. In most contracts, the presumptive clause presumes total disability if, through sickness or accident, there is complete and irrevocable loss of speech, hearing, sight or the loss of use of two limbs. Full payments will continue until the end of the benefit period, regardless of what the claimant might be able to earn at the current or any other occupation.

The amount of disability insurance you need can be evaluated in a number of ways. Bottom line: You should ideally plan to purchase the full amount of coverage available to help replace your after-tax income in the event of a long-term disability. Benefits provided under most individually owned disability policies are received tax-free.

Options worth considering include a partial disability provision; indexing of benefits for inflation; options to increase the coverage (without more medical testing); and an extension of your regular occupation period.

We suggest you contact a financial security advisor and ask for further information and a quote.

This article is intended to provide information of a general nature only. It may not be applicable to particular circumstances. Accordingly, the information in this article is not intended to serve as legal, accounting or tax advice. Users are encouraged to consult with their professional advisors for advice concerning specific matters before making a decision.