If It Can Happen to Me…

By Debbie Stuart, CLU, CHS,
Estate and Insurance Planner,
Odlum Brown Financial Services Limited 

The decision to buy insurance can be hindered by bias when weighing probabilities. While we may accept that some things happen, we tend to believe they will happen to someone else, not to us. But the fact is, life-changing events could happen to you or to me.

June 2, 2007, started as a beautiful day for me in Vancouver. With the weekend expected to remain just as nice, my family decided to organize a big barbeque. My spouse, Tony, and I are avid boaters, and our extended family always appreciates the fresh seafood we contribute. To ensure we would catch enough Dungeness crab for everyone at the barbeque, Tony decided we needed another crab trap, so off he went to our local bait and tackle shop.

I was a first-time mother with our three-month-old daughter, Brooklyn. Everyone told me to sleep when the baby sleeps, so I began having an afternoon nap with her.

About 20 minutes into my nap, my cell phone was ringing and ringing. I answered to hear some strange man’s voice telling me Tony was in a serious motor vehicle accident. An ambulance was there, and Tony asked to be taken to Royal Columbian Hospital. You can imagine how fast I bundled up Brooklyn. I drove straight to the hospital and was there just before the ambulance arrived, where my sister met me to look after our baby. I was able to see Tony for a short time in the emergency room before I signed a stack of forms for multiple surgeries. The wonderful staff took me into a room so I could have some privacy. A short time passed, and a priest came to talk to me. They thought Tony wasn’t going to make it; however, they had never met Tony before! 

Tony was an avid squash player, always exercising, and loved competition, but he had certainly met his match. Seven surgeries and two years of rehabilitation followed, while Tony learned to walk again. Not only did he relearn to walk, but he went back to playing squash. He won the top division championship at his club before his accident, and again after. We also welcomed another child, a boy who we named Boston after our Boston Whaler boat.

So, why am I telling you my personal story? I am sharing this with you because my family would have been in an extremely unfortunate financial position as a result of those two years if Tony hadn’t had disability insurance. If my story can help other people recognize their risk exposure to an interruption in their ability to work, then I am happy to share it.

Who should purchase disability insurance?
If you are self-employed, single or have a family who depends on your income, this could be the most important coverage you get. If someone asked you, “What’s your most valuable asset?” you might think of your home. But have you considered that it is likely to be your ability to earn a living? Over a 30 or 40-year career, your accumulated income is likely to be far more valuable than any other asset you’ll own.

What is disability insurance?
Disability insurance is designed to pay a monthly income to help pay for ongoing expenses if you suffer an accident, disease or illness that prevents you from working. Disability benefits typically replace 60-70% of your regular income and may even be non-taxable. You can receive disability benefits from more than one source, but plans are usually coordinated to make sure that all the benefits you receive are not greater than your normal income.

Are you covered by a “group insurance” policy?
Many people are covered by group insurance policies offered through their employers, unions, or professional or alumni associations. Each policy contains specific information about coverage, including the definition of “disability,” the amount of the monthly benefit and any limitations to coverage, among other things. It is important that you read through your policy to understand how you are protected. Insurance needs can vary widely from person to person, and you may need to purchase your own individual insurance to fill gaps in your group coverage, or fill gaps if you leave that workplace.

What you should consider?

• Lifestyle: What does your current standard of living cost, and how would you feel about having to cut back?
• Family Responsibilities: How many people depend on your income? Are you a single parent or a non-custodial parent with financial responsibilities? Do you have parents or other family members who depend on your income?
• Employment Flexibility: Would you be willing and able to change jobs?
• Debt: How would you make your mortgage and car loan payments? How long would your savings last?
• Financial Resources: How dependent are you on your salary? Do you have savings or investments to cover your lifestyle? How long would they sustain you?
• Dreams: What would happen to your plans for your business, family or retirement if your disability lasted long enough to deplete your savings?

Did you know?

• More than three-quarters of active disability claims involve musculoskeletal injuries (such as fractures, falls, dislocations and sprains), nervous disorders (like depression and anxiety) and cancer.
• 1 in 3 Canadians will become disabled for more than 90 days before they’re 65.
• 5.75 years is the average length of a disability, if it lasts longer than 90 days.
• Canadians may have limited government protection for sickness or disability. For example, WorkSafeBC may cover a job-related accident or injury, but not situations like Tony’s. Canada Pension Plan disability benefits exclude short-term or less severe disabilities. Employment Insurance and Canada Recovery benefits offer just two weeks of sickness protection capped at $573 weekly.

Protect your income. Disability insurance works when you cannot.

Odlum Brown Financial Services Limited is in the business of caring for your financial well-being, and insurance can be an important component to protect your plans. If you would like more information regarding living benefits or other insurance topics, please contact us through your Odlum Brown Investment Advisor or Portfolio Manager.

Odlum Brown Financial Services Limited (OBFSL) is a wholly owned subsidiary of Odlum Brown Limited offering life insurance products, retirement, estate and financial planning exclusively to Odlum Brown clients. OBFSL offers a variety of coverage options from many of Canada’s top insurance companies tailored to suit clients’ individual needs. Our licensed professionals are here to help you assess your position and then implement customized recommendations to meet your individual circumstances and needs. For more information, please contact your Odlum Brown Investment Advisor or Portfolio Manager.