PGL - Personal Insurance

How Much Personal Insurance Do I Need?

The personal insurance plans available through the Canadian Dentists’ Insurance Program include a wide range of coverages, such as life, accident, sickness and travel insurance. Each of the coverages has its own special role to play in your insurance portfolio. Understanding how and where these fit in is an important first step in your planning process. If you have any questions regarding what level of personal insurance coverage is right for you, please call us.

Life Insurance:

How much life insurance you need depends on where you are in life. In arriving at a coverage amount, you’ll need to consider:

If you have dependents, multiply your annual pre-tax income by five (if your children are younger, you may wish to select a higher amount)

Your outstanding debts and loans

Funeral expenses (usually these start at around $12,000)

Needs unique to your situation (for example, care of a parent in a nursing home or the long-term care of a disabled child)

Funds for your children’s education, if applicable (consider a base amount of $40,000 per child)

Funds for day care, if applicable

Funds to cover your final tax bill or to help create a legacy

Medical contingency (minimum of $25,000)

Planning Tips From
Professional Insurance Advisor
Corinne St. Jarre

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• Review your coverage at least every year. If any of these factors change (for example, if you have another child), you’ll need to adjust your insurance amount accordingly.

• If you’re young and healthy, it’s important to get life insurance coverage now — while you’re still able to meet necessary medical requirements.

• As long as you have dependents, increase your life insurance as your income and standard of living increase.

• You may be able to reduce your life insurance amount (and your premiums) as your children become self-supporting and your mortgage and business loans are paid off.

To estimate how much Basic Life and Family Life Insurance you may need, click here to use our Basic Life Insurance Calculator and here to use our Family Life Insurance Calculator.

Critical Illness Insurance:

Unlike some types of personal insurance, you can use the Critical Illness benefit any way you wish, giving you greater flexibility in responding to a serious medical condition. In planning the amount of your coverage, you may wish to consider the costs of things that you may need right away, such as the cost of urgent medical treatment outside Canada (which can easily run into the hundreds of thousands of dollars), the costs of assistive devices such as wheelchairs, or the cost of a private nurse, a housekeeper or child care. Consider also how much it would cost to retrofit your home, purchase a wheelchair accessible van or fulfill any important dreams you may have.

To estimate how much Critical Illness Insurance you may need, click here to use our Critical Illness Insurance Calculator.

Long Term Disability Insurance:

Long Term Disability Insurance (LTD) benefits replace some of your income in the event an injury or illness prevents you from working. In general, it’s wise to insure up to the maximum allowed. In order to help you gauge the maximum amount of coverage you can apply for, use this handy calculator or contact one of our licensed professional advisors who’ll be glad to help you.

Planning Tips From Professional Insurance Advisor Marilyn Hill

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• When you’re arriving at your annual income, include the income that you’ve actively earned — not passive earnings, such as from investments, etc. Your income should include net earnings from not only your practice, but also those from teaching, consulting or any other business activity.

• It’s important to remember that LTD benefits for which you may qualify are based on your pre-tax income. LTD benefit payments are intended to provide after-tax income close to what you may have had before you were disabled. To find out how much coverage you should apply for, go to the income ratio guide in your current Canadian Dentists' Insurance Program handbook.

• Insure yourself to the maximum that you’re eligible for now... later, your health status may change and you may not be able to qualify for this level of coverage.

• Your choice of elimination period — the time that will pass before your benefits start — will in part determine your premium level. Longer elimination periods generally mean lower premiums

Accidental Death and Dismemberment Insurance:

If you are injured due to an accident that results in permanent and total "loss of use", you’ll need Accidental Death and Dismemberment Insurance to pay the expenses arising out of your injury, such as the costs of your rehabilitation, altering your environment to deal with your injury (for example, making your home wheelchair accessible) or pursuing another career path if you’re no longer able to practice. It’s important to realize the costs of coping with an injury could easily rise into the hundreds of thousands of dollars — consider just the price of a wheelchair accessible van — and insure yourself accordingly.

Remember that this coverage helps you and your family cope with the financial consequences of an injury. It’s not meant as an income supplement — so you still need Long Term Disability Insurance to cover you and your family’s day-to-day living expenses while you’re dealing with your injury.

Travel Insurance:

Under the Canadian Dentists’ Insurance Program, to find which type of emergency medical travel insurance you’ll need, simply determine how many days your longest trip out of the province will last in the coming 12 months, then select either the 15, 30, 60, or 90-day period to cover your longest trip. (You should also consider whether you’ll need single or family coverage and whether you’ll need Travel Edge Plus Insurance, which includes Flight Accident, Trip Cancellation and Baggage Loss coverages.)

A Planning Tip From Professional Insurance Advisor Emma Nair

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If your longest trip is more than 15 days but well under 30 days, you may save money by choosing the 15-day coverage and then purchasing extended coverage for the extra days. (Of course the same applies if your longest trip is longer than 30 days but under 60 or 90 days.) Contact a CDSPI Advisory Services advisor for the extended coverage rate and for advice on which option makes better sense for you.

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