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What do Self-Employed People do About Disability Benefits and Critical Illness Insurance?

There are tax and other advantages to self-employment, but creating a safety net of disability and critical illness benefits for you and your family is necessary. If you are self-employed, these types of insurance are critical for financial survival.

As a small business owners if you became disabled or critically ill for a long time, it could financially devastate your business. Disability insurance for self-employed individuals ensures a monthly income while critical illness insurance provides a lump sum benefit after a set period (usually called a waiting period).

Which Policy Covers What? Health, Disability and Critical Illness

In addition to self-employed disability and critical illness insurance, there are extended health insurance plans that can help pay for medical and dental costs not covered by your provincial government health insurance (MSP). They can help provide protection against potentially costly, unforeseen health care expenses.

There are two types of extended health insurance to choose from: Health Spending Accounts (HSA) for more basic coverage and the more traditional Group Health Insurance plans that include coverage coverage for catastrophic (more serious) events.

In the event you suffer a disability or critical illness, it is important to know which insurance policy can cover you for partial income replacement, lump sum benefits or coverage for health expenses.

What is Self-Employed Disability Insurance?

When an unexpected accident happens and you’re unable to work, a self-employed disability policy will provide some income replacement, usually expressed as a percentage of your average monthly earnings. If you’re self-employed, you can buy self-employed disability insurance. The disability coverage also includes a cost-of-living benefit, which means the benefit increases to cover inflation during the disability. The taxability on this income depends on how the premiums are paid or structured. If the premiums are paid through a professional corporation, the benefits may be taxable in your hands. If the premiums are paid personally, the benefit may not be taxable. It is important that you seek the advice of a broker and accountant on how best to set up the coverage.

Why Self-Employed Disability Claims are Often Denied? The Importance of Knowing What Time Limits Apply.

Time limits are not the same for every disability policy and each circumstance is unique. Therefore, it is essential to get legal advice to know what time limits apply in your particular disability circumstance.

There are six reasons why disability claims are denied. Self-employed disability claim cases are often denied for lack of medical evidence. Our disability claim lawyers have successfully resolved these denied claims by producing medical evidence required to prove the disability defined under the policy

What is Critical Illness Insurance Coverage?

One in four Canadians will suffer a critical illness by age 65, and the costs related to critical illness continue to rise. Critical illness insurance is designed to protect policyholders who become critically ill or injured. If you are self-employed, critical illness benefits can be crucial to your financial survival.

Critical illness insurance is a fairly new product popular with self-employed Canadians. The policy provides a lump-sum payout from $50,000 up to $2 million dollars, depending on your coverage, if you’re diagnosed with one of the conditions under the policy. These include various forms of cancer, heart ailments, chronic diseases and other terminal illnesses listed in the policy. Therefore, it’s important to read the types of critical illness and the definitions of each in the policy document itself.

Why Do Self-Employed Critical Illness Claims Get Denied?

Even if you choose the correct Total Permanent Disability (TPD) if you are unable to work as defined in the policy, your critical illness insurance claim can be denied. It is very difficult to collect if the insurance company denies a claim, especially when the actual insured is critically ill, and not readily available to assist in the claim.

Your claim can be denied if you have a critical illness when you least expect it. That’s because insurance companies do not use the consumers’ definition of a critical illness or even the medical industry’s – they use their own definition as set under their policies.

Need Help With Self-Employed Disability or Critical Illness Claim Denied?

If you, or a family member, have become disabled and critically ill, and your insurance claims are being denied, you need expert advice from experienced disability and critical illness lawyers for a fair and equitable resolution of your claim.

In addition to meeting the definitions for insurance coverage, there are time limits for all critical illness and disability insurance claims. Any delay in proceeding may be subject to a deadline. You should not hesitate in starting your claim or obtaining legal advice to clarify both definitions and deadlines.