How well do you understand: Living Benefits insurance

Why you need it

LTD insurance replaces your income when you are unable to work for a period of time due to illness or injury.

How much does it pay out?

You receive a percentage of your pre-disability earnings. The percentage you receive is defined by your policy.

How often do I receive payment?

Most policies provide monthly benefit payments for a defined period of time.

When does it pay out?

You receive benefit payments when you are unable to work due to an illness or injury. Most policies have a waiting period that must be fulfilled before you can receive benefit payments.

Good to know

You'll have to provide initial and ongoing medical documentation from your treating physician to prove that you are unable to work. Your insurer may ask your employer to accommodate any reasonable accessibility needs you have so that you can return to work.

Who pays for it?

LTD insurance is usually available through your employer, but who pays for the insurance varies. If your employer pays any part of the LTD insurance premium, any benefits you receive through the plan are taxable. If you pay 100% of the premium, any benefits you receive through the plan are non-taxable. Some LTD plans can be purchased by individuals who have their own business. OTIP also offers a long term disability insurance plan specifically for occasional education employees.

Why you need it

After you survive a critical illness, life changes. You may have new expenses for medications or for accessibility modifications to your home or vehicle. Travelling to doctors' appointments or paying to stay overnight in the city where you're being treated can become expensive very quickly. Or maybe you just want to celebrate your return to health with a family vacation!

How much does it pay out?

You choose the value of the policy at the time of purchase. If your policy pays out, you spend the money however you want.

How often do I receive payment?

A lump sum is paid to you to use however you see fit.

When does it pay out?

Your policy pays out when you survive a critical illness or injury as defined by the policy. Policies usually cover illnesses and injuries like cancer, heart attacks, loss of limbs/sight/hearing, comas, etc.

Good to know

You must survive the illness or injury for your policy to pay out. Some policies are based on family history.

Who pays for it?

CI insurance is purchased by individuals.

Why you need it

When they become unable to take care of themselves, most people prefer to live at home rather than in a long term care facility. LTC insurance helps pay for the expenses associated with assisted living.

How much does it pay out?

You choose the value of the policy at the time of purchase.

How often do I receive payment?

Claims are paid on a reimbursement basis or lump sum, depending on your plan's design.

When does it pay out?

Your policy pays out when you have a cognitive impairment (e.g., Alzheimer's disease) or are no longer able to perform at least two of six "Activities of Daily Living" (ADLs) by yourself. ADLs usually include bathing, toileting, feeding, dressing, transferring out of bed or a wheelchair, and continence. To be covered by your policy, the care you receive must be provided by a professional, not a family member.

Good to know

Where you receive the care will be defined by your policy. Some long term care plans are designed for care provided to you in your home and do not cover you if you reside in a nursing home. If you prefer to have a family member take care of you, your policy won't pay that person for his or her time, but may cover "respite" care - the costs associated with having someone else to take care of you while your primary caregiver takes a break.

Who pays for it?

LTC insurance is purchased by individuals.

Why you need it

Life insurance pays for final expenses like funerals and burial, but can also be used to pay off debts, leave a legacy for loved ones, or top-up savings that were used to pay for care or treatment during an illness.

How much does it pay out?

You choose the value of the policy at the time of purchase. There are many, many different types of policies to choose from.

How often do I receive payment?

The person(s) or entities you list as beneficiaries receive a one-time lump sum.

When does it pay out?

The policy pays out when the insured person dies.

Good to know

Your premium is often based on your age, sex, health and smoking status. Sometimes, your family's history of illness will affect your eligibility or premium. Term insurance policies expire after a certain amount of time or once you reach a certain age. Term policies can usually be renewed or converted to a permanent policy. It's a good idea to review your life insurance needs every three to five years.

Who pays for it?

Usually your employer provides some type of group life insurance, but you can also purchase it individually. You may have multiple policies and coverage amounts to cover different needs.