Disability Insurance vs. Critical Illness Insurance

I really didn’t understand the difference between these two different types of insurance policies, but luckily I have smart friends who answer my dumb question like, “What is the difference between Critical Illness Insurance and Disability Insurance?”.

Chantal Marr answered my query (she is part of LSM insurance one of my advertisers, and she is also my insurance consultant for this blog as well), and I think I now understand the big difference between these two policies.

Critical Illness Insurance

Critical Illness Big Winner! (really?)

Chantal’s answer is concise and easily understood:

Disability Insurance pays out a monthly benefit that is tied to your ability to earn an income.  Critical Illness pays out a lump sum benefit but is is not tied to your ability to earn an income.  Disability Insurance underwrites your occupation and Critical Illness does not.

Chantal has also written a more detailed description and discussion of these insurance vehicles with: Critical Illness insurance vs. Disability Insurance Why You Need Both.

I do not agree that you need both insurances, I think Critical Illness insurance strikes me as a bit ghoulish, in that you get a big pay out for getting a critical illness. Do you need a large lump sum payment if you are diagnosed with a critical illness? I am not sure, I would have thought that if you have a good health insurance plan, and you have some kind of disability insurance, that would be nearly enough, but I am sure Insurance folks would argue you need the critical illness to be completely covered (again, I don’t agree with that).

As for the Disability Insurance, read over your policy carefully if you are purchasing one to ensure you understand how “Disabled” is defined, and how you qualify (or don’t qualify) for funds (but you should do that with all Insurance policies). Understanding what Disabled means, is the key to the policy, as what you think of as disabled and what your insurer thinks of as disabled may not be the same thing.

The other part of any Disability Insurance Policy is figure out who is insuring you. I have written previously about Self Insured Disability Insurance that decimated many families during the Nortel fiasco. Make sure that whoever is insuring you, is financially sound.

Image courtesy of Ambro/ FreeDigitalPhotos.net


Read Your Home Insurance Renewal Notices

My home insurance is coming up for renewal in a few weeks, and my insurer was kind enough to send a letter saying, “You better read how our water damage coverage is changing”, so I was warned, and thus I read over all of my coverage that showed up with my renewal documentation.

My sewer backup coverage is now being capped at $15,000 seems to be the major change to things. To quote what I was sent exactly:

“… We adjusted this amount in response to a sharp increase in the number and total cost of water damage claims in recent years, due to climate change and aging infrastructure…”

Nice, so there are arguments going on all over the world about climate change and such, but my Insurance company has embraced it as a fact and are changing my premiums due to it. It seems almost like Miracle on 34th Street (the original version), if Insurance companies think Climate Change is important enough to change my coverage, it must be true! (OK, I digress, and apologies for the sarcasm for the lovers of old movies too).

It is also a damning statement about the City of Ottawa’s infrastructure that it is mentioned specifically as another reason they think sewer backups are more likely as well.

OK fine, given the number of floods I have seen in Canada, it’s not really that surprising (it’s still annoying as a consumer, but then again, all I can do is shop around and call to see if this can be dealt with to my satisfaction).

My insurance company also seems to think that I have a crappy old roof, as they are removing the “… Weight of ice, snow or sleet — Ice Damming — Roof Water Damage Endorsement…” as well. I am pretty sure my roof was redone in 2006 (see writing a blog gives you a wonderful records keeping option as well), so I will call to see if they were aware of that, since I am not sure I told them either. I can’t believe that an 8 year old roof is now viewed as a risk in their eyes, but I need to call and confirm that with them.

I guess I should tell them about all the upgrades I have done as well (upgrades? not really, I just replaced the windows, heating and air conditioner as well).


Term Insurance Over 50

I have had a 10 year term life insurance plan to act as “Mortgage Insurance” on my house (no it is not really a Mortgage Insurance product (that is a rip off (IHMO)), and the 10 year term is about to expire. I received a letter informing of this and how that if I wanted to renew for 10 years more, my monthly premium would be 3.45 times higher than it is.

This perturbed me a bit, but I decided that since this wasn’t going to happen until July I’d have time to shop around and maybe find something cheaper or decide whether I need this policy any more.

Fifty Looks Big

Heck 50 Looks Big in Print

I received a phone call from TD Life Insurance (the Policy provider) it was a licensed TD agent calling asking if I had read the letter and whether I had any questions. I said I wasn’t happy with the rate increase, but knew it was going to go up but not by that much. The agent sounded sympathetic and then she said that there was another option. At that very moment my “here comes another one for my horse” incident in my life, and I was not wrong.

Evidently if I buy a NEW policy I could have a rate increase of only 50% monthly, however, since it is a new policy I’d have to answer a medical questionnaire and sign forms stating I was telling the truth about my current health.

My guess is this is the Insurance Company attempting to cover itself, assuming an old guy like me, might have picked up some disease or bad lifestyle choices, so they want to be sure I have a clean(er) bill of health than most 50 year olds. This is the risk you take buying Term Insurance and not “Whole Life”, and I fully realize this, however, a quadrupling of my rates does seem a little punitive (just my opinion).

I think I’ll shop around a bit more but I haven’t decided my next steps just yet.



Discounts (and you only get what you ask for)

In my continuing search to pay as little for my insurance as I possibly can (while remaining within the laws of the land and keeping my stuff safe), I was told about a great discount that I would get from being a member of PSAC. I dutifully checked with the insurer in question and received a very odd quote that was higher for my cars than my current insurer, however over all it was lower due to the cost of having my daughter on my Auto Policy.

No She Isn't Going to School In China!

No She Isn’t Going to School In China!

I wasn’t really that impressed with the savings, however, I was considering changing, until I remembered the words of my post  The Answer is Always No, Unless You Ask, so I decided to find out why on my current Auto Policy I was paying so darn much for my daughter.

I called my current insurer and asked about why my Daughter cost so much on my policy. The agent I spoke with was sympathetic, but then I remembered that Michael James had mentioned a while ago about Student Away at School discounts, so I mentioned that my daughter goes to school a fair distance away, and Voila, thanks to that and my daughter getting her G license, I saved $290 , not an insignificant pile of cabbage.

Am I happier? Absolutely. Do I feel stupid for not remembering what Michael James had written? Absolutely.

I have sent the proof of my daughter’s enrollment (via e-mail, how nice and clean) and hope to see the discount show up on my policy very soon.



Cell Phone Cameras, not just for Duck Faces

In the early days of Cell Phones, I ridiculed when I heard that they were including a Camera in Cell phones (who would use that, and what for, I believe was my arguments about the validity of melding these two technologies), however (as usual), I have been proven wrong and these two technologies are now permanently cemented together (much to the chagrin of Kodak and Polaroid, I would wager). The Cell Phone Camera has caused an explosion of media on the web with folks sharing and posting pictures of:

  • Food: what you are eating, where you are eating it, and who you are eating with, astoundingly interesting. Evidently that is the biggest use for Cell Phone cameras.
  • Billions of photos of our children taking pictures of themselves in bathroom mirrors, in various states of disrepair (and or dress), smiling in odd ways (or even the infamous duck face). This has forced the porn industry into rethinking itself yet again.
  • Very jerky videos of odd events as they occur.

A Bad Example, but you get the idea. This is a photo of my wife’s new iPhone!

And this really only scratches the surface of what the Cell Phone Camera has touched in our lives, however, it can actually do a useful thing as well (no, not supply blurry pictures for blogs) it can help us more easily catalog the valuables in our houses.

As I mentioned in Theft and Insurance having a valid home inventory which is up to date, with photos of your valuables is a very good thing to have, and with a Camera Phone you really have no excuse any more.

Some tips that could make this even better:

  • Create an account on one of the many picture archiving sites (preferably one that allows for PRIVATE Albums of photos), where you can upload your pictures to.
  • When you are taking your pictures, if your camera has a GPS capability, use it to tag the photo as well. Never hurts when your insurance company gets the photos, to say they were taken at your house.
  • Make sure you are using your camera in Highest Definition mode and download them in that format as well.
  • Add a detailed description of what the picture is of, and possibly the value of the object
  • Make sure the picture is clear as well (you can take many pictures, you only need 1 clear one).

With this, you now have an off site backed up archive of the valuables in your house, in case of a fire, or theft, and it didn’t really cost you too much either (upload your pictures using Wi-Fi as well, saves you high data charges by your cell phone company).

Give the insurance company as much information as you can, and you are more likely to get your claim dealt with in a quick and concise manner.