One afternoon not long ago, Steve Wise, a Lawyers Financial Advisor in Southwestern Ontario, got a call from his client, an established lawyer in Windsor, who had just been diagnosed with lung cancer. It came as a complete shock. Doctors found the cancer while conducting a routine exam. There were no symptoms. There was no reason for his client to believe that that day would be any different than the one before. This wasn't the first time Mr. Wise had been on the receiving end of a call like that one.
"People don't know what to do," he says. "They worry about their family and earning an income. They wonder if they have the right kind of insurance. And they don't know how much information they should share. It's unfortunate because their fear and confusion just adds to an already overwhelming situation."
Mr. Wise was able to reassure his client and give him the best news possible. He could do nothing about the diagnosis but he could start the process of filing a long-term disability claim, and start the paperwork to initiate business overhead coverage. His client would continue to receive a salary, in the form of long-term disability payments, throughout his entire recovery period. It also meant the practice would stay open and clients would continue to be served by two junior lawyers recruited to sustain the business.
Stories like this are more common than one might suspect. Many lawyers have become unable to do their jobs because of an accident or illness. The disability could be temporary or lengthy. What matters is that they are able to stave off financial disaster by maintaining income from a disability insurance claim so they can focus on recovery.
Perception and reality
Despite the advantages of disability insurance, it's not always a priority for lawyers, particularly in the early days when expenses are high and income is just beginning to trickle in.
Mr. Wise and his team wish that more people could enjoy the peace of mind that comes with the right combination of income protection, including long-term disability coverage. He believes there are three things everyone should know about disability insurance.
1. Disability doesn't mean catastrophe
When you have disability insurance and an accident or illness prevents you from earning a living, your policy can generate a steady, reliable income. "Most people hear the word 'disability' and they imagine something catastrophic with a remote chance of happening to them," says Mr. Wise. In reality, you are considered disabled if you are unable to perform the duties of your regular occupation and not working elsewhere, he says. This definition can also be enhanced by adding an Own Occupation Rider, meaning that if a disability makes it impossible for you to continue to practice law but does not render you entirely unable to work, you may take a job in a different field and continue to qualify for insurance benefits.
2. You won't have to fight for your rights
The disability insurance provider chosen by Lawyers Financial and the Canadian Bar Insurance Association has an impeccable reputation for responding quickly and working alongside our advisors to guide clients through the process of filing a claim. According to Mr. Wise, "There's a misconception that insurance companies will try to get off the hook when a claim is filed. That puts a lot of people, especially lawyers, in a defensive position when it comes to buying insurance and filing a claim. But that's simply not the case." Mr. Wise has seen countless claims settled quickly and watched his clients go on to receive a steady, reliable income.
3. Disability insurance is part of a much bigger picture
Disability insurance replaces your income so that life can carry on, your bills can get paid, and you don't have to liquidate your assets in order to survive financially. Leaving your investments intact gives them more time to grow. You can also keep up with life insurance premiums. And if your life insurance policy has a 'waiver of premium benefit', your premiums could be waived for the entire time you are considered disabled. As a result, your net worth continues to grow and your estate is protected for future generations.
When viewed as a form of income protection and a way to preserve your assets for future generations, disability insurance is a prudent investment, clearly justified as a cost of doing business as a lawyer in Canada, Mr. Wise says.
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