What are the two main types of life insurance?

What are the two main types of life insurance?

• Insurance
• September 15, 2021

What are the two main types of life insurance?  

Disability insurance  

Disability insurance will cover you in the event you are unable to work due to illness or accident. The coverage ranges, typically between 60 and 85 per cent of your income that will be replaced for a specified term.

Short-term disability  

This coverage typically lasts up to six months and is sometimes, but not always, covered through your employer.

Long-term disability  

This type of insurance usually kicks in when short-term disability, or your EI or work sick leave benefits have been exhausted. LTD plans differ but most will pay for two years once you have left work. After two years, it will only continue to pay if you can prove you are unable to work at any job.

Critical illness insurance  

This is an insurance product that can be difficult to qualify for depending on family history and may be a costly addition to your portfolio. There is no guarantee that you will ever get sick or injured, but this can be an important item to work into your insurance portfolio. With this type of coverage, if you get sick, or a loved one gets sick and can’t work, you will have money to offset that financial loss or whatever associated costs come with caring for and managing  your illness, or that of an insured loved one (childcare, respite care, medical expenses, etc.). Critical illness insurance can help to offset many of those costs. An important note on this type of insurance – Even though we don't like to think about our children becoming ill, you can and should apply for it for young children. If they fail to qualify, for whatever reason, they cannot reapply until they’re 18.

Travel insurance  

In Canada, we’re able to access the same medical coverage we have in our home province, across the country. However, if you are traveling to the United States or anywhere abroad, travel insurance is something to consider and is highly recommended,while traveling and can be purchased yearly or per trip.

Many medical costs aren’t covered by your provincial coverage, when you travel abroad, and even when they are, you’re required to pay upfront and claim when you are home. If you don’t have travel insurance, you will have to pay the bill  yourself and this quite often ruins vacations. Good luck with that $6,000 medical bill for a broken finger. Many types of travel insurance can pay expenses while in a foreign hospital or some policies will reimburse once you’ve returned to Canada after travelling abroad.

Many credit card companies include travel insurance but it’s important to make sure you know exactly what kind of coverage you have before you leave the country.