Everyone that earns a living needs to have disability insurance, in case they are no longer able to work. Basically, if you earn an income, you need an income replacement plan. That means insuring your income or your ability to work. Disability insurance is a fundamental element of financial planning. It helps to establish a base upon which all of your other financial planning decisions depend.
Should you become disabled and not be able to work for six months or longer, where would your money come from? Here are some potential sources of income that you could draw from if you should become unable to work for an extended period of time:
- RRSP and personal savings
- Loans and credit
- Spousal income
- Sale of assets