There are many different types of insurance designed to protect one of your biggest assets: Yourself. There’s life insurance, health insurance, long-term care insurance—some celebrities even protect parts of their body against the possibility of injury.
While you might not need to insure your teeth for $30 million like Julia Roberts and you probably don’t need $70 million leg insurance like David Beckham, there are types of insurance designed to help you if you can’t work due to illness or injury. These are disability insurance and critical illness insurance.
While these two types of insurance have similarities because they can help you and your family with often-difficult personal experiences, they have many important differences and provide solutions to different financial protection needs.
Disability insurance is a monthly payment that replaces some of your income if you can’t work because of an injury or illness. It usually provides you with 60 to 70 per cent of your income so you can maintain as much of your standard of living as possible until you can return to work.
Critical illness insurance, provides a one-time, lump-sum payment that you can use any way you want if you experience one of the serious conditions as defined by your protection, such as cancer, heart attack or stroke. Not everyone’s recovery costs are the same. In addition to the possibility of a leave of absence from your job, a critical illness can sometimes mean that you’re left with the costs of recovery. This could include a need for costly assistive devices, or even travel expenses—things disability insurance may not cover.