Protect your income when you can't work
You don't need scary statistics to know the absolute necessity of getting suitable disability insurance.
Your ability to earn income is usually your most valuable financial asset. What happens to your expenses when you can't work due to an illness or injury? What happens to your income?
Your best strategy is to get protection while you're a student or just starting your career.
Disability insurance is difficult to get because:
very few insurers offer personal coverage
very few advisors have the specialized training
You won't qualify for much coverage today, which reduces your costs. The big advantage is that once you're approved, you have the option to add coverage as your income increases — without medical underwriting. You just provide proof of your income and pay for the increase based on your age at the time of election. That's easy to afford because you have more income.
By applying while you're a university student or within 6 months of graduation you can get:
Up to a 25% reduction in premiums based on your area of study
5 months of waived premiums after paying the first month's premium
No medical underwriting for $6,000 or less of purchased monthly benefit
No financial underwriting for monthly benefit amounts up to a maximum determined by area of study
If you apply as an apprenctice you get:
A 10% reduced premium
The Truth About Disability
Waived Financial Underwriting Limits and Discount by Area of Study
Note: More than these limits can be applied for, but you will need to provide proof of income and undergo financial underwriting if you apply for a larger amount. You will also need to go through medical underwriting if you apply for more than $6,000 of monthly benefit of Personal DI or Student BoE.
Standard features with the RBC Professional Series
You get many features built-into the product:
Tax-free benefits: receive tax-free monthly benefits up to age 65 after a 90-day elimination period.
Guaranteed premium rates to age 65: your premium rates will not increase as you get older or if RBC has more claims than expected.
Non-cancellable: as long as you pay your premiums on time, RBC can't change your policy.
Coverage beyond age 65: you have the contractual right to continue your coverage regardless of your health. The benefit period is reduced.
Conversion to long term care insurance: you have the contractual right to elect lifetime income regardless of your health, You receive tax-free income if you have a cognitive impairment or are unable to perform two or more Activities of Daily Living.
Portable: you can keep your coverage wherever you are on earth.
Premiums waived during disability: After 90 days of disability, your premiums are waived while you remain disabled. You also receive a refund of premiums paid during those 90 days.
10-day free look: you can cancel your coverage within 10 days of receiving the policy contract and receive a full refund
Future Income Option: as your income increases, you can increase your coverage with proof of income regardless of your health. The maximum benefit is $25,000 per month.
Cost of Living Allowance: during a claim, your benefits increase 2-10% annually based on CPI.
Disability In Your Occupation: receive benefits if you can't do your work but can do other work (if you don't have this rider you may not be eligible to receive benefits in this scenario).
Can I buy disability insurance on price?
Disability insurance is the most complex form of health insurance. You can't buy on price — highest or lowest. Service and claims adjudication are essential considerations, but how can you decide? The contract definitions differ among companies.
Reminder: this content is simplified for clarity. Also, products change. Please refer to the policy contract for specifics.