LATEST NEWS IN DISABILITY INSURANCE

Long term disability insurance...Nortel employees wished they had their own private plans - a painful lesson! (November 6, 2009)

There are an estimated 400 plus former members of Nortel on Long Term Disability (LTD). Until recently it was believed that the LTD benefit was guaranteed by an insurance company. This has proven to be inaccurate. An insurance company is managing a self financed fund set up by Nortel but does not guarantee the benefit. This is likely in the realm of the provincial government but funds may come from commercial sources should the courts decide to award a portion of the assets.

From Conservative Gordon O'Connor's web site www.gordonoconnor.ca

My name is Jackie Bodie and I'm a Nortel employee on long-term disability.

Never did I expect that I would actually have to use the disability insurance that I dutifully paid premiums for during my 14 year career with Nortel. A phone conversation with a Nortel HR employee confirmed one particularly important question I had regarding the details of their plan — that I would be provided with a disability income up to age 65. This was enough to satisfy me that I had sufficiently planned for a worst case scenario.

(CBC story here)

This reminds me of conversations with HR in Brampton head office years ago who stated that offering employees the option of their own enhanced disability plans was a waste of money since the company already paid for it. So much for that!

I got back over $17,000 from CRA and continue to save thousands of dollars every year which really helps my family. Maybe you can too! (September 29th, 2009)

Every year accountants, tax preparers and Canadians who do their own personal taxes miss out on millions of dollars of tax refunds and credits. How can you prevent this from happening to you?

My personal story may help your family. I have two boys that were born in 1999. They were born prematurely so my wife and I basically lived at Mount Sinai Hospital for 3 months during what we thought would be the most challenging period in our lives.

Looking back, our experience at Mount Sinai pales in comparison to one day in 2003 when a doctor told us that both of our children have Autism. The mental and physical challenge was only just beginning and would stay with us probably for life.

For the next several years our family trudged along, making use of the many services that are available to special needs children in Ontario. However, like many in our situation, we became very centrally focused with the knowledge that we no longer have anything in common with our friends and their typically developing children. Moving forward to 2007, it was just by chance that my wife mentioned the boy's diagnosis to our tax preparer and we learned of the Disability Tax Credit (DTC). After completing all of the necessary paper work, our tax preparer revised our tax returns back to 2003 (the date of diagnosis). We received a cheque for over $17,000 and we continue to save on our taxes yearly by making use of the DTC.

Here is what I have learned from all of this. Accountants and tax preparers provide an excellent service based on the documents that you provide them, but they rarely have time to ask questions about your personal situation. And, unless you are aware of your CRA entitlement, you are not likely to mention personal information to your tax preparer.

Likewise, those who do their own taxes may also be missing out.

At a recent seminar we learned of a man whose father had died 3 years ago. Since the CRA allows you go back 10 years, the son was able to claim the DTC and revise his father's taxes for 7 years. He received over $15,000 for the family.

The following is a list of conditions that may qualify for the Disability Tax Credit. This list is by no means complete and not all individuals will qualify.

Addictions: illegal or prescriptions
ADHD: Primarily Hyperactive/impulsive
Autism (an estimated 190,000 Canadian children)
Pervasive developmental disorder (PDD)
Asperger's syndrome
Alzheimer's disease
Angina: an estimated 6% of Canadians between ages 50-64 have this symptom of heart disease
Anxiety
Arthritis
Auditory syndrome
Antisocial personality disorder
ALS (Lou Gehrig's Disease)
Bi-polar disorder
Chronic Fatigue Syndrome
Chronic pain disorder
Colitis
Coronary artery disease
Fibromyalgia
Gambling Addiction
Glaucoma
Deafness
Hepatitis C
Huntington's Disease
Learning Disabilites
Irritable bowel syndrome
Migraines
Arthritis
Multiple Sclerosis: every day 3 more Canadians are diagnosed with MS
Obsessive-compulsive disorder
Parkinson's Disease: nearly 100,000 Canadians have Parkinson's Disease, 20% are under age 50
Post traumatic disorder: military, paramedics, front-line nurses and victims of abuse, violent crimes or accidents
Feeding: unable to feed themselves or take significantly longer to eat than most to do so
Stroke: more than 50,000 strokes occur in Canada each year, one stroke every 10 minutes
Vision problems: blind in both eyes or 20/200 or 20 degrees field of vision
Walking: unable to walk 100 meters or take significantly longer than most to do so
Sleep disorder
Fetal alcohol syndrome
Dressing: unable to dress or takes significantly longer
Depression
Down's syndrome
Quadriplegia

As an advisor I don't do my clients' taxes personally. I use the experts for this.

I am working with a firm which specializes in submitting all the paperwork to start the process. To date, they have collected over $2,000,000 for their clients. This process takes on average 60 to 90 days and a small referral fee is charged by the firm if they collect.

DON'T DELAY!
2009 is coming to a close and you will miss out on the 1999 credit as of 2010…this may mean thousands of dollars lost forever!

Once you have the Disability Tax Credit you can open an RDSP (registered disability savings plan).

In my next article I will discuss the RDSP and how some can get over $164,151 from only $20,000 invested in twenty years, assuming a modest 3% rate of return. Also, find out what most banks are missing in their advice of the new RDSPs and what you need to know.

Phone me at 905 338-7689, or e-mail me at brian@disability-insurance-quotes.ca.

Why your disability policy is safe and protected - Assuris Protection (July 28, 2009)

If your life insurance company fails, your Disability Income policy will be transferred to a solvent company. On transfer, Assuris guarantees that you will retain up to $2,000 per month or 85% of the promised Monthly Income benefit, whichever is higher.

Example 1

Benefit	Original Policy when Company Fails	Explanation	Assuris Protection when Company Fails
Monthly Income	$1,500 per month	Since the amount is below $2,000 per month, the Monthly Income benefit = is fully protected.	$1,500 per month

Example 2

Benefit	Original Policy when Company Fails	Explanation	Assuris Protection when Company Fails
Monthly Income	$3,000 per month	Since the amount is higher than $2,000 per month, the 85% protection is applied to the Monthly Income benefit. ($3,000 x 85% =3D $2,550)	$2,550 per month

If the liquidator, appointed to manage the company failure, achieves a greater return on the policy than the Assuris protection, your benefits will be adjusted to the greater of either:

The Assuris protection or;
The amount recovered by the liquidator.

Please see this page for more details.

Chamber of Commerce Member? Your Disability Insurance may have some disadvantages! (July 11, 2009)

Are you healthy and a member of the chamber of commerce? Get better coverage and less restrictions on your disability coverage! And if you want get most of your money back if you remain healthy!

Are you a member of local chamber of comerece? Do you have disability insurance coverage though a special deal for members? One of the features is "guaranteed renewable" This means as you get older your insurance premiums keep going up! As older healther or younger healther members get their own disablity coverage the group left in the chamber of comerence is forced to pay higher and higher insurance premiums.

Always look at insurance that never increases its rates! Guaranteed renewable plans mean that the insurance company can and will raise rates on a group like a chamber of commerce as a group if the claims increase. Many plans go up with the age of the person for example age 35 the person is paying $300 a year and at age 40 this goes up to $450 a year at 45 this goes up even higher...just like your property taxes!

The guaranteed renewable contract offers the insurance company some flexibility. It will increase the premium if it is suffering from poor claims experience. As as result, the company is generally less restrictive in its underwriting (sometimes offering policies to individuals who do not qualify for non-cancellable coverage) and usually charges a slightly lower premium since it can raise the rates at a later date.

The Pitfalls Of Disability Mortgage Insurance Bought Through The Bank Or Mortgage Broker! (June 15th, 2009)

These coverages are taken right from the banks web sites as on June 2009.

"The maximum insurable amount is $2,500 per month, for a period no longer than 24 months per disability, without limitation as to the number of disabilities. (Please note that arrears, property and school taxes are not covered by this insurance.)."...Laurentian Bank

"Coverage: Accident & Illness Mortgage Protection can cover your mortgage payment, depending on the percentage of coverage you select, up to a maximum of $3,000 per month"...From BMO

"This great-to-have protection will pay you up to $3,000 a month for as long as 24 months if you become disabled due to a covered illness or injury. You'll start receiving these payments after a 60-day waiting period, giving you the security of knowing you'll have money coming in while you recover."...HSBC

Our Mortgage Disability Protection can:

Cover your mortgage payments (after a 60 day waiting period from the day you were diagnosed) should you be unable to work as a result of an injury¹ or covered impairment, and
Provide a maximum monthly benefit amount of $3,500 plus your disability premium (including provincial sales tax) for your mortgage for up to a maximum of 24 months.

With Disability Protection, you are automatically approved for coverage up to $300,000, without a medical questionnaire or examination required."...Scotiabank

The coverage for disability insurance is less than you can get with your own policy, and is similar to problems I highlighted on my other site www.rightinsurance.ca on mortgage life insurance vs owning through a bank or a mortgage broker. Plus the cost is much more expensive! Any time a bank does does not need a medical questionaire done means you have to pay much much more than you need to. Think about it if I want a loan and the bank does not or will not do a credit check on me will I get the best interest rates? Of course not!

Alternatives to Disability Insurance? (May 8th, 2009)

I am often asked can I get away without getting disabilty coverage, my question is do you drive without wearing your seat belt? You wear it not beacause you are expecting to get into an accident because in case you get into an accident. The key is for most people is cash flow...if it was free how much do you want? Talk to me and in many cases I can show you how to can pay for it with out out of pocket money.

This is like asking, "is there a way to lose weight without eating less or exercising more?" The answer is yes - you can lose a leg or get sick so you don't want to eat for a long time, but I don't recommend it! Stick to the basics!

Most alternatives to replacing lost income are only halfway measures...it's similar to getting half a hair cut or buying half a cup of cold coffee... does it save you money? Maybe, but it makes you feel and look lousy!

This was taken from Service Canada's website.

What do we mean by "disability?"

The CPP definition states that a disability has to be both "severe" and "prolonged," and must prevent you from being able to work at any job on a regular basis.

There is no common definition of disability in Canada. If you qualify for disability benefits from other government programs, or private insurers, this is not a guarantee that you'll qualify for a CPP disability benefit.

In a nutshell, if you have your own disability plan you can collect before you can collect from the government. In fact if you can only work part time (with the right policy you can collect).

You can't rely on Workers Compensation (especially if you lose your job!)
Collecting on worker's compensation is a similar story to collect as the government CPP. You must get sick or injured in a manner that is work-related. Let's say you are in a accident on the weekend (not work-related) - are you covered? No! Go to Worksafe BC for more information (if you live in BC the story is the same for other provinces)
Workers Compensation benefits are limited - this is another problem, in addition to the requirement that the illness/disability be work-related
You can't rely on your savings, on your family (they want your money!) or on a bank loan.

If you saved just 5% of your income each year, a six-month disability would wipe out 10 years of savings, and when savings are gone your other assets would begin to dwindle as well. After your savings depleted rapidly, would family or friends be so willing to help you out? Even a bank wouldn't want to give a loan to a disabled person with no income and no guaranteed prospect of being able to repay. Remember when you paid off your outstanding visa bill? It took months to pay it off!! That was when you were working!

How about using your RRSPs? The problem here is in order to get $5,000 the government (CRA) holds back 10 per cent in taxes so you don't get the full $5,000! Want more than $5,000 (CRA) holds back even more! Remember the taxman is part owner of your RRSPs!

Bank Disability is good...but only for the banks! (April 30, 2009)

It's definitely not the best solution for people who want better coverage for more affordable rates.

Do you buy mortgage life insurance through the bank? If so see my points on this topic (at rightinsurance.ca. How about disability insurance on your loan with the bank? Are you going to pay off your loan? Most bank disability plans cover only the outstanding balance, not the part you already paid down.

Another good question is "how disabled must I be in order to collect?" Well, how about totally disabled - if you can get out of bed and work for even one hour a week you will not collect!

Do you like to go through a middle man for coverage? Here is one example: Scotia Bank disability insurance is underwritten by Canada Life. CIBC is through Sun Life...get the picture?

Do you like your rates to go up every five years? That's what the banks offer. Do you like the idea of shopping around for better rates (loans)? Well, if you find a better rate and leave the bank, you've just cancelled your disability policy.

Do you like to get your money back if you don't claim? Banks don't offer this feature either!

There is a better way. Talk to me today to learn more.

Too Many Choices, Not Enough Information (April 17, 2009)

Have you ever been to a resturant where the menu was pages and pages of choices? The waiter asks what you want and you ask for more time to decide? Finally you ask him or her what is good and they give a list, but you still only remember the things you liked? In the end it took ten minutes or more just to order!

Getting disability quotes online is just like that! The key is to talk to a licenced insurance consultant and find out what is important to you. Do you want the cheap salad with a glass of water, or do you want to enjoy the food with a nice drink? Getting cheap disability quotes is just like that: you save money initially, but the experience later on may not be that great. Since there are so many choices, the question is what do you get for your money? Simply spend a few minutes on the phone explaining your needs and cash flow, and the licenced consultant will be in a much better position to help you. Over a lifetime you may pay thousands of dollars in premiums - don't you think that taking a few minutes to speak to a real, live, qualified consultant is a good idea, rather than trusting your policy to a pre-programmed computer algorithm?

Can you make the preimums tax-deductible? Can you free up money that you are transferring unknowingly or unnecessarily to get more disability coverage? These are just some of the questions that a qualified consultant can help you answer.

For example, if you increased your auto deductible from $500 to $1500 would you save $300 per year...couldn't you put this money toward better, more valuable coverage, yourself? This is one of many ways you can save money to get better protection. You will not get this kind of advice when you shop online for disability insurance quotes.

I am not opposed to online insurance shopping - my point is that you can't depend on it alone! Make sure that you pick up the phone and speak to a real human consultant before making any decisions! Give me a call when you're ready; I am here to help.