CLHIA-ACCAP - Consumer Information

TYPES OF DISABILITY INSURANCE Special Purpose Plans A wide range of other types of insurance plans may ease the cash crunch in the event of disability under certain circumstances: • Auto insurance: This pays income benefits if you are injured in a traffic accident. Depending on the province where you live, your auto insurance provider may be the first or second payer of disability benefits. This means the auto insurance company will pay you either first (before other disability income or health benefits plans) or second (after other disability income or health benefits plans). Either way, the benefits that you are entitled to receive from all sources will be coordinated. If your province has no-fault auto insurance, you may not be legally allowed to sue for lost income except in catastrophic situations. • Creditor's insurance: Sometimes offered with a mortgage, a bank loan, car financing or other debts, this type of insurance covers your loan payments, usually for a certain amount of time, if you become disabled. Some credit card balances can also be insured. Some mortgage plans cover your monthly payments for a set period of time. Be aware that if your mortgage is re-negotiated, you will need to re-apply and re-qualify for this type of coverage. • Dismemberment coverage: Built into many insurance policies, this pays a lump sum for full or partial loss of use of a limb, hearing or vision. • Critical illness: This coverage offers a one time, lump-sum payment in the event you are diagnosed with a critical illness. The purpose of the lump-sum payment is to provide additional financial resources for your needs at a time when you may be off work, undergoing treatment and focusing on recovery. People often use this extra money for things such as home care, child care, and travel outside of the country for specialized treatments that may not be available locally, or to help supplement their family income so a spouse or partner can also stay home. Benefit amounts vary depending on the amount of coverage that you choose, such as $10,000, $50,000 or more. The benefit is payable only once. Insurance companies can differ in how they define a 'critical illness.' Typically, it includes conditions such as cancer, stroke, heart attack, multiple sclerosis, coma, paralysis, organ transplant and more. TIP: With any group disability insurance plan, the employer, union or association is the owner and manager of the group policy. This means they could decide to change your coverage, change insurance companies or even terminate the group plan altogether (this is not common) and your coverage could end. Then, depending on your health, you may or may not qualify for continued coverage. 7

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