Combining Life and Disability Insurance

Combining Life and Disability Insurance

It can be hard to impress the need for life or disability insurance upon a young person just entering the workforce. It is the nature of youth to fail to see the potential for such a purchase. When a person is young and healthy it is the most advantageous time to get the most life and disability coverage at the best rates. In the past, these purchases were made separately. Each type of coverage – life or disability – required its own application, medical tests, approvals and premiums. These days there is a new product on the market which encourages the combining of life and disability insurance into one product.

How Combined Life and Disability Insurance Works

Although it is one policy, combined life and disability insurance can be accessed separately until the age of 65. If the insured is injured at any time before the policy expires, then they can access the disability benefits from the policy to meet monthly expenses while being unable to work. The remainder of the policy can be used in this same way when the need arises due to disability or death. The primary advantage of combining life and disability insurance is that it allows an insured to simplify his insurance portfolio into one easy application and one monthly payment.

The Disability Portion

The disability benefits offered by combining life and disability insurance do not differ much from a traditional disability insurance plan. However, individual insurance companies alter slightly different policy limitations, medical requirement or policy rates. Most combined life and disability policies will offer the following benefits for disability:

Disability coverage for as long as insured cannot work in regular occupation
Disability coverage to age 65
Disability coverage after a set waiting period

The Life Insurance Portion

The life insurance benefits offered by combining life and disability insurance are different from those offered in a regular life insurance plan because the combined life insurance is only valid until the insured reaches the age of 65. Some insurance companies may offer an option to move the remaining life insurance benefits into a permanent life insurance plan at expiration. Most likely this will not require any additional medical proof or requirements, but that will be at the discretion of the individual insurance company.

How Combined Life and Disability Insurance is Best Used

Combining life and disability insurance is not for every consumer. A financial advisor can help a consumer decide which insurance solutions best meet their needs. When it comes to combined life and disability insurance, this type of insurance works best for protecting short-term financial needs that may arise in the following situations:

Mortgage protection in the event of disability or death before age 65
Small business planning and protection against disability or death before age 65
Family insurance planning against disability or death before age 65

No one can predict the future. Combining life and disability insurance into one comprehensive plan can ease the burden of managing a large portfolio while providing the consumer with right coverage at the right price.

NoMedicalLifeInsurance.ca can help. Call us today at 905.248.4849.

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