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Critical Illness vs. Disability Insurance: What’s the Difference?

You want to make sure that you have the right insurance to protect your family or small business. But it can be hard to know exactly what the difference is between all the types of insurance you can buy!

Life insurance is pretty straightforward, but it can be harder to sort out the differences when you get into things like critical illness insurance and disability insurance.

If you’re looking for insurance in the Richmond Hill area, we’re here at Marathon Insurance to help you. We’ll explain all of the following significant differences between critical illness insurance and disability insurance:

  • What each type of insurance covers 
  • How the payouts work for each type of insurance
  • What you can use the payouts for

So whether you live or work in Richmond Hill, we can help you with the insurance you need.

What does critical illness insurance cover?

The purpose of critical illness insurance is to provide you, your family or your business with financial protection if you get a serious illness such as cancer or have a stroke or a heart attack. Getting seriously ill can impact your ability to work or care for yourself or your family. Critical illness insurance can help cover the costs of your recovery, whatever they may be.

When you’re seriously ill, the last thing you want to do is worry about money, which is why critical illness insurance is so important.

What does disability insurance cover?

Disability insurance is designed to cover a loss of income if you can’t work because you are ill or injured. It usually covers between 60 to 70 percent of your lost income and is particularly important for people who do not have disability coverage through their work, such as freelancers and contractors.

Disability insurance isn’t restricted to just physical injuries, such as breaking your arm. It can also be used to cover illnesses such as multiple sclerosis or mental issues such as depression or anxiety.

How do the payouts work for each type of insurance?

With critical illness insurance, you will get a one-time, lump-sum payment once you’ve been diagnosed with a covered illness or issue. There is usually a thirty-day waiting period between the diagnosis and the payout. You don’t have to be employed to qualify for critical illness insurance, and the payout is tax-free.

Disability insurance provides payouts every month for as long as you cannot work due to your covered injury or illness. As with critical illness insurance, there will be a waiting period for the payout – which can be a month or even a few months. Depending on the type of disability insurance, there may be a maximum number of years the payouts will continue, so it’s important to discuss how long your coverage will last with your insurance broker.

What can I use the insurance payouts for?

The fundamental purpose of insurance payouts is to help support you and your family.

With a disability insurance payout, you’ll be replacing your income, so you’ll likely use the money to cover your everyday bills, like groceries, your mortgage and car payments. The choice is yours – you can spend the money as you see fit.

With a critical illness insurance payout, you can use the money to cover your regular bills – but you may want to also spend it on:

  • Costs associated with hospitalization including parking, a private room or medication that isn’t covered by the government or your insurance plan.
  • Costs associated with keeping up your house and yard – such as hiring a house cleaner or landscaping company.
  • Something a little more fun – like a vacation to celebrate successful treatment!

Critical illness and disability insurance payouts help give you peace of mind and make sure that you have the financial resources you need.

How can Marathon Insurance help me with Richmond Hill insurance?

If you live, work or play in or near Richmond Hill, we can help you with Richmond Hill insurance.  We can answer important questions you may have about your insurance, whether you choose to get critical illness insurance, disability insurance or both.

The key purpose of both types of insurance is to provide you with financial protection when the unexpected happens.  

For disability insurance, we can answer questions such as:

  • How long you would need to be disabled before you can start receiving monthly payments?
  • How large your payment would be each month?
  • How long you could expect to receive payments for?
  • What illnesses and injuries are covered by your disability insurance policy?
  • Why you may want to still buy a disability insurance policy even if you have coverage through your employer?

For critical illness insurance, we can answer questions such as:

  • Who can qualify for critical illness insurance?
  • What conditions are covered by critical illness insurance?
  • What potential expenses a critical illness payout could cover?
  • What financial implications a critical illness payout could have?

We encourage everyone to think about their future and protect it accordingly. With the right kind of insurance in place, you can have peace of mind knowing that you and your family are protected.

We’re Here For You With Richmond Hill Insurance

It’s never fun to think about becoming seriously ill or disabled, but it’s essential to make sure you’re protected if something bad happens. We’ve explained to you:

  1. The differences between critical illness insurance and disability insurance.
  2. How a payout for each type of insurance would work.
  3. What your options are for how you can spend your insurance payout.

We are happy to answer any questions you may have about critical illness insurance or disability insurance. We also sell several other types of insurance, including auto insurance and insurance for your Richmond Hill home.

Contact Us About Richmond Hill Insurance

If you’re looking to either purchase new insurance or increase your existing coverage, reach out to us today! For more information about insurance, call Marathon Insurance at 844-429-0837 or contact us here.

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