Thursday, October 7, 2010
What Options are Available?
If you were to wake up tomorrow, unable to go to work, what would be the immediate impact on your lifestyle? It would depend first on whether you are an employee or a business owner. As an employee you can register for Employment Insurance (EI) benefits, which will pay you 55 percent of your pre-disability income, starting after two weeks, and paying for a maximum of 15 weeks. As a business owner, you will have to rely on your own resources as you are not eligible for EI.
Short-term disability benefits are available for business owners but, in most cases, the benefit must also be extended to the employees, thereby increasing costs. Depending on the size of the company, it might be possible to set up two classes of coverage – for employees and owners – and include short-term benefits for owners while leaving the employees short term needs in the hands of EI, which you are paying for anyway.
The proverbial rubber really hits the road in situations where disability is of a longer term. Now other support systems drop away, and without an income the daily grind becomes just that – a grind. It is our contention that long-term disability benefits are critical – and are not the most costly portion of a benefit plan. This benefit allows a disabled employee to continue to make a financial contribution to the household, thereby maintaining some semblance of their pre-disability lifestyle.
Generally speaking, an employee is productive when they are “at work” but the same cannot necessarily be said of an owner, who could be away from the office or shop and still be working “on” the business rather than “in” the business. Because of the nature of a lot of owners’ responsibilities it is worth looking at a personal disability policy for owners instead of the group long-term disability. This can provide a number of added features further helping the owner and his or her family. These might include a cost of living rider, the ability to increase the benefit amount by simply submitting proof of increased income, an extended period when disability will be measured against the duties performed rather than the ability to perform “any occupation.”