You can never be too careful when it comes to your ability to provide for yourself or your family. Accidents and illnesses can occur without warning. When these conditions suddenly cause you to miss work, the financial consequences could be severe.
Thankfully, you have options that could provide for you if a sudden injury did occur. Two viable options include disability insurance and critical illness insurance. These types of policies could provide a lifeline during dire financial circumstances. However, there are important differences between the two types of policies that could have a major impact on your claim.
Disability insurance provides ongoing, monthly payments designed to compensate you for your lost wages during an illness or injury. Every policy is different, but most receive benefits between 60 and 85 percent of your normal wage. These ongoing payments allow you to meet your obligations without giving up your standard of living. These benefits could pay for your food, mortgage, child care, or other day-to-day expenses.
Disability insurance comes in both short- and long-term policies. Short-term coverage typically lasts no more than a year and is intended to meet your needs while you recover. Long-term benefits only kick in after a short-term policy expires. They could last a few years if you eventually return to work. If you are permanently disabled, they could last until you are 65.
One downside with disability insurance is that it may not be available immediately after your injury occurs. Many policies require you to first exhaust your other options, like sick leave from work. In general, it could take weeks or even months for these benefits to begin.
Critical illness insurance
Critical illness insurance differs from disability coverage in one important way: it involves a one-time payment instead of ongoing monthly benefits. While disability benefits pay a portion of your monthly wage, critical illness policies are not tied to your pre-injury paycheck. This form of insurance has less to do with meeting your ongoing expenses. Instead, these policies generally provide for the cost of dealing with a sudden serious illness. These costs differ from one person to another, and you can use it as you see fit. This could cover the cost of in-home assistance, out of pocket medical expenses, or any of the unexpected costs that come with a sudden illness.
There could be delays when receiving payouts from a critical illness insurance policy as well. Each policy is different, but they generally begin paying benefits within 30 days of incurring your illness.
Another difference between these policies is who can apply. While disability insurance policies cover an employed person, critical illness policies are more open-ended. Anyone can purchase a policy, and you are not limited to making yourself as the beneficiary. For example, a child could be the beneficiary of critical illness insurance paid for by their parents or grandparents.
While these policies sound like they could ultimately serve the same purpose, there are times when critical illness coverage could apply with disability insurance will not. For example, a person could have a debilitating illness that still permits them to work in the short term. As long as they are able to perform their duties on the job, disability insurance will not kick in.
Dealing with a denied claim
Disability or critical illness insurance could make an enormous differenced during your time of need. That does not mean the claims process is guaranteed to go smoothly. Like with any insurance policy, these could include loopholes that insurance companies might exploit. While claim denials happen, a long term disability lawyer could help you stand up to your insurer during the appeals process.
Preszler Injury Lawyers take pride in serving as a personal injury law firm. Not only does our firm assist with injury claims, we also help British Columbia residents appeal the wrongful denial of their claims. While recovering benefits on these policies is never guaranteed, we are dedicated to helping you obtain what you are entitled to. If you are ready to discuss your options, schedule a free consultation with Preszler Injury Lawyers as soon as possible.