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Understanding the Basics of Disability and Critical Illness Insurance, with Kristen Fazio

Presented by Willful

Welcome to The MapleMoney Show, the podcast that helps Canadians improve their finances to create lasting financial freedom. I’m your host, Tom Drake, the founder of MapleMoney, where I’ve been writing about all things related to personal finance since 2009.

When most of us think about insurance, we think of life insurance – protecting our loved ones after we die. But what about insurance to cover you and your family while you’re still alive? This week on The MapleMoney Show, I tackle the subject of disability and critical illness insurance with my guest, Kristen Fazio.

Kristen explains how disability and critical illness insurance differs from life insurance. For one, life insurance is very straightforward, you’re either alive, or you’re not. Disability and critical illness insurance are considered living benefits – it protects you while you’re still alive.

Kristen mentioned that insurance companies had taken steps to align critical illness benefits across the industry in recent years. This means that the coverage is very similar regardless of the critical illness plan you purchase.

We also discuss whether it’s better to purchase disability insurance on your own, or through your employer’s group insurance policy, aka employee benefits. Kristen makes a strong case for buying your own disability coverage and making your employer plan complementary. If you know that there are gaps in your family’s insurance coverage, this is an episode you don’t want to miss.

Kristen is a Personal Insurance Specialist with the Professionals’ Insurance Centre. Kristen says that discussions surrounding insurance and financial planning were the norm for her family growing up. These days, she helps clients set themselves up for financial success by ensuring that they have the proper insurance coverage.

This episode of The MapleMoney Show is brought to you by Willful: Online Wills Made Easy. Did you know that 57% of Canadian adults don’t have a will? Willful has made it more affordable, convenient, and easy for Canadians to create legal Will and Power of Attorney documents online from the comfort of home.

In less than 20 minutes and for a fraction of the price of visiting a lawyer, you can gain peace of mind knowing you’ve put a plan in place to protect your children, pets, and loved ones in the event of an emergency.

Get started for free at Willful and use promo code MAPLEMONEY to save 15%.

Episode Summary

  • What makes disability and critical illness coverage a selfish insurance
  • Critical illness insurance can cover up to 21 illnesses
  • Most critical insurance policies are very similar when it comes to what is covered
  • Why most insurance companies no longer sell long-term care protection
  • Disability insurance covers more than just bodily injury
  • A large portion of disability payouts are for mental health
  • The best time to buy set up insurance coverage
  • When is it better to buy your insurance on your own or through your work

Read transcript

When most of us think about insurance, we think of life insurance protecting our loved ones after we die. But what about insurance to cover you and your family while you’re still alive? This week on Maple Money Show, I tackle the subject of disability and critical illness insurance with my guest, Kristen Fazio. Kristen explains how disability and critical illness insurance differs from life insurance. For one, life insurance is very straightforward. You’re either alive or you’re not. Disability and critical illness insurance are considered living benefits. It protects you while you’re still alive. 


Welcome to the Maple Money Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. This episode of the Maple Money Show is brought to you by, well, four. Did you know that 57 percent of Canadian adults don’t have a will? Willful has made it more affordable, convenient and easy for Canadians to create a legal will and power of attorney documents online from the comfort of home.  In less than 20 minutes, and for a fraction of the price of visiting a lawyer, you can gain peace of mind knowing you’ve put a plan in place to protect your children, pets and loved ones in the event of an emergency. Get started for free at and use promo code Maple Money to save 15 percent. Now, let’s chat with Kristen… 


Tom: Hi, Kristen. Welcome to the Maple Money Show. 


Kristen: Thanks. I’m happy to be here. 


Tom: On past episodes, we’ve covered different types of life insurance. I’m a big advocate for that. I think it’s important people consider that and not wait until it’s too late. There’s a couple other insurances I wanted to cover with you today because they’re something I don’t feel people consider as often. I think they’re pretty important. They are critical illness and disability insurance. First of all, when I think of life insurance and other insurances, I think of the hangover quote, “But did you die?” Obviously, when you die, you think of how your finances are going to be affected for my family but there are other things that can happen too. Just in a broad way, can you explain why people should be considering these, combined, and the importance of them? 


Kristen: Yes, I’d love to. I built my practice and career around disability and critical illness insurance because a lot of people don’t understand it. It’s not necessarily something we talk about very often. You’re so right on the fact that life insurance is usually the first and foremost thing that people think about. When they’re younger and early on in your career, you kind of have to think, what’s the likelihood of you actually dying? It’s quite low. But when you look at disabilities and critical illness, it is actually really high. One in three Canadians becomes disabled before the age of retirement. And on average, a large insurance company that sells disability insurance (as an example) will pay over $445 million a year in claims. So it is something that’s very prevalent and very necessary. But like you said, not a lot of people think about it. In its basic form, disability and critical illness, I refer to them somewhat along the lines as being a selfish insurance because like you mentioned, life insurance is something that pays for somebody else, for maintaining their lifestyle. But disability and critical illness actually helps you. It’s something that is (inadvertently) also helping your family. When the worst time of your life might be coming, you’re not worrying about finances. You’re not stressed out about not being able to work and not being able to generate income. And you can actually focus on yourself and your own recovery because a third party is supporting you, in this case, the insurance company. So when you think about a disability policy, what it actually does is maintain your monthly income in the event that you cannot work for whatever reason. Whether that be a physical injury, like breaking your leg skiing. Mental health issues, a lot of times are covered depending on the policy. And also illnesses like cancer, heart attack, stroke, those types of things. This is something where you can actually maintain a monthly income for your household while you are seeking treatment or recovering at home from that injury. Your lifestyle is maintained and you’re not worrying about how to pay the rent, save for your kid’s education or whatever that looks like for you financially. You don’t have to worry about that. You just worry about yourself. And critical illness works very similarly along the lines of covering 21 most commonly known illnesses we encounter in life. Most commonly, again, cancer, heart attack and stroke. But I’ve seen things like Parkinson’s, major organ failure, and benign brain tumours. There’s a lot of things it covers, and it pays you out a lump sum amount of money to support you in that short period of time where you are focusing on recovery and not worrying about paying for things. I’ve had clients go to the U.S. for treatment and not want to have to pay out of pocket. This money will help support whatever you need from that. Whether you want to take a trip or pay off your mortgage, it doesn’t matter. It’s just money for a bit of a relief. You probably speak about this often, but finance is going to be a very, very emotionally exhausting and nerve-wracking thing for people. And you are now just complicating it when you have some sort of illness or disability. 


Tom: For sure. In addition to that, I find when finances are the most stressed is when you start making bad decisions anyways, and then it becomes an even worse mess. So yeah, I think these are great options. With critical illness, it pays a lump sum. It sounds more similar to life insurance. In this case, how is that working? When someone gets a diagnosis they just make the claim? Is it that simple? 


Kristen: It is exactly that simple. When you’re buying a critical illness policy, it outlines what is covered. About 10 years ago, there was actually a mutual agreement where all insurance companies came together and defined what a critical illness is to be which was very similar. There’s not a lot of differences between companies and contracts anymore, which is good because for someone like myself who isn’t a medical professional, it’s hard to give advice to say, buy this policy or this policy if they’re defining things differently and I don’t know how to explain it. So it’s very cut and dry in that sense of what if covered under a critical illness policy. A heart attack is a great example. You have a heart attack. You purchased a critical illness policy prior to this condition. And let’s say you bought a $50,000 policy the minute you were diagnosed. If you survive 30 days from that diagnosis, then the $50,000 is paid out to you, tax-free, to use as you wish. Normally, that’s a good example because I’ve seen clients who have recovered from a heart attack and are back at work in two weeks (with modern medicine). As long as you’re surviving those 30 days, it does take into effect. Similar to what you were saying, it is like a life insurance policy, but that’s why there’s a 30 day survival period. If you were to have a heart attack and pass away, your life insurance policy would cover that event. But your critical illness is more so to say, “Okay, I need support now as I continue to recover.” That’s when your critical illness pays in. You’re going to be able to use that money to support that change in lifestyle. If somebody had a stroke, perhaps, they’re not going to necessarily have all of the same needs or same support they would have had. And now that money will help them with either family having to take time off to take care of them or bringing in a nurse, things like that. It’s just giving that lifestyle support. 


Tom: You mentioned someone taking care of someone. Is this the same as long-term care insurance or is that something different? 


Kristen: Long-term care is a whole different basket. It’s something that is definitely still necessary, but it’s not the same in the sense that if you ever bought a long-term care policy and you were admitted to a home or had somebody come in and take care of you, it would be a monthly installment payment until you no longer needed it. Long-term care actually works more along the lines of the disability policy where it’s a monthly installment payment. And interestingly enough, within the last four years  most companies have actually stopped selling long-term care because of how necessary it is. It’s almost like a guaranteed need in our society, now. Most companies don’t sell them. But interestingly, a lot of disability contracts, the higher end ones, actually convert to long-term care. So how I explain this to people is, your disability is protecting you when you’re earning money. It’s protecting that earned money. And when you retire, you no longer have the need to generate income because you’re not working, you’re now protecting the nest egg of your retirement. But you’re not using all of your money and outliving your money because you get to use it for your own care or for being in a home. It’s kind of like a really interesting flip of the way the contract works, but that’s the way most people obtain those kind of contracts now. 


Tom: So with disability insurance, something you mentioned that I thought was interesting was that it’s not just bodily injury. When I think of a disability in just general terms… I’m always working at the computer so, first of all, how many actual injuries am I going to get? Unless I break both of my hands, I’m probably okay. But it does cover other things within mental health, like depression and such?


Kristen: One of the things that’s difficult about disability insurance is that it’s a very “gray” subject. When you look at life insurance, unfortunately, as morbid as it sounds, you’re dead or you’re alive. There’s no in-between area.  


Tom: That’s pretty clear. 


Kristen: Yeah, exactly. With disability, there’s so many different ways of defining it and I think that’s why a lot of people in the financial industry start to shy away from selling these products because it’s very hard to understand every feature of every possible contract. That’s where I don’t think there’s a lot of education around disability. It’s kind of like the scary insurance. Disability is very much based off of what you do for a living. That will dictate what kind of contract you can get. So you’re right in the sense that there are some contracts that will only cover you for injuries. A great example might be if you’re a construction worker. You’re very, very reliant on your ability to work your body. There is high risk that you might physically hurt yourself. So those people might just focus on getting  an injury only policy. That way if they’re hurt, it will cover them. Some of the really high-end ones where you’re somebody like a lawyer or a physician, where there is burnout and a lot of things that could affect their job from not only a physical perspective like an illness. They might opt for a very robust contract that has everything in it. So on the higher level products, you will have everything covered. You will have injury, illness, mental health. One of the largest disability insurance companies in Canada see about 33 percent of their claims being mental health. So it’s a very big portion of their payout, especially in the era of going through COVID and everything. Right now, a lot more people are using that contract to support them in those needs. It’s funny you said breaking both wrists. I actually had a client last summer who was on a boat and broke both wrists. It was a perfect example. She put in the disability claim. It’s interesting because in the actual contract itself, a lot of clients will ask what’s on the covered condition list? On those higher end policies, there are no lists because all you need is a physician’s note that justifies that you’re not working because of whatever that injury or illness is. It’s really, really great to have those kind of contracts because then you’re never worried about what will or will not pay you. You will always get the coverage you need if you legitimately can’t work. 


Tom: You mentioned how these policies can be geared around what your job is. Do they look at other things too? I could be sitting at a desk all day, but maybe I’m jumping from airplanes in the evening. Do they take that into account because you may be replacing your job income, but the injury could happen anywhere. 


Kristen: Oh, yeah, that is a great question. And it’s interesting. That’s one of the reasons why I tell clients, the younger you are when you buy these types of coverages, the better. To your point of not waiting too long, disability is actually one of the most difficult insurances to obtain because of the extensiveness of the underwriting and the review process that the insurance company goes through. When you think about it, again, most of these higher end products are looking at you today. And let’s say you’re in your mid 20s and just starting your career. They’re looking at you today and taking on the risk of insuring you until you’re 65 without any right to ever change your contract, increase cost or do anything. So it’s a lot on them to say, “Okay, is this person ever going to get hurt or ill or what’s going to happen to them?” A lot of things go into play. The first thing that’s most important is your job. But they also look specifically at your age, your gender. Females pay more than men just because of childbearing years. They look at your smoking status. They look at the entirety of your health history. So if you’ve ever had a previous health issue, it could cause concern in buying coverage. Also, things like hobbies, any high risk activities like scuba diving, ice climbing. They’ll look at travel, how often you travel, where you travel to and if you’re travelling to high-risk countries. A lot of times you see that as being a problem with executives who have to travel to areas that are on a travel ban for Canada. But for their job, they have to go often. There is definitely a lot that plays into it and that’s where I find there’s a lot of value in working with the professionals. Someone like myself can right off the bat say, “Okay, Tom. This is what we’re going to have an issue, so give me all the information I can get for me to help advocate as to why this shouldn’t be a problem for the insurance company.” There are definitely still very favorable ways of getting it. But when you are younger, you are at your healthiest and at the likeliest time to get insurance coverage. A lot of times people think about this when they’ve either had a family member or friend who’s been diagnosed or disabled which is usually around your mid-40s, early 50. At that point, it might actually be a bit hard to get. It might be that you’ve had health history that’s going to cause and issue to buy these contracts. Sometimes it’s great to buy it when you’re younger, especially knowing that most of these contracts will grow with you as your income will grows, your lifestyle grows. You can buy more all under this one plan and you don’t have to disclose anything that has changed in your health. That’s a huge value to do this while you’re healthy and perhaps not as risky. I always tell my clients, once you buy one of these, then you can go skydiving or do whatever you want. But it’s better to do it before you get into any of that stuff. 


Tom: Yeah, exactly. With either of these, critical illness or disability, when you’re putting certain things down, health history or the skydiving, are these things excluded or are they still included and you’re just paying more? 


Kristen: It depends. With life insurance, you tend to see things rated. Like you are saying, you’re paying more because of the activities or health history that you have. But with disability, it kind of becomes a bit harder especially when it comes to health history. For example, let’s say you have diabetes. It’s kind of hard to exclude diabetes because it might affect loss of limbs and other things that might stem from it. Sometimes it will either be declined fully or have specific exclusions. For example, you are heavily reliant on your body’s ability for your job, but you’ve had major reconstructive knee surgery four times and it’s still not fully healed. They’re probably going to say, “We’ll cover you for 99 percent of everything else other than your knee.” That’s where it depends on what the injury, illness or issue is. Again, if it’s something like travel, they might say they’re only going to cover you for injuries that happen in such and such country or only in Canada. Or you have to return to Canada within 20 days if you get disabled. There are ways of modifying the contract to be as favorable as possible. But there are still times where you’re more likely going to get declined for a disability policy than you would be if you’re applying for a life insurance policy just based on the nature of how much more risk there is for an insurance company when they look at how much they might have to pay on a monthly basis. Let’s say you’re 30 and making $100,000. They’re probably issuing you around a $5,000 monthly contract. And if you were disabled from your 30th birthday until the day you retire, that’s millions of dollars they’ll have to pay out. That’s a risk that they have to analyze based off, like a knee injury or something along those lines. Sometimes it’s easier to decline or to exclude those conditions, permanently. 


Tom: That’s a great point about how long this can go. If you get a disability, does it go on until the end of the term of that insurance? How does that work? I was  just imagining disability is where you’re out for a month, but this could be a thing that goes on for decades. 


Kristen: I’ve had clients that have been on claim for a few months all the way up into a career-ending critical illnesses or disability. If you’re buying a product that what we call as coverage until the age of 65, that means that between the day you buy it and the age of 65, you can go on and off claim as many times as you need to without it affecting the cost of that price. Think of car insurance. You get in an accident and your rates go up. It’s not like that with disability. It’s locked in with a guarantee to never change the price of it. I have had clients who have gone unclaimed for a year, gone off claim for five years, gone back on claim because they’ve had a reoccurrence of an injury for another five years. And I’ve had clients on claim for 30 years. That’s the difficult part about this industry. It’s a risk game that you’re playing. I always suggest clients buy the best and biggest products because you don’t know if you’re going to be the statistic of one in three or if it’s going to be something easy to return to work from or not. So yes, you can technically be on claim your whole career if something major happens. 


Tom: Speaking about buying the best, you said a lot of the policies for critical illness had 21 things covered. But that’s not always the case, right? Sometimes it’s less, sometimes it’s more. I assume you’ve got to be the guy who gets into the fine print a little and make sure what you consider something that could happen, is covered? 


Kristen: Yeah. With critical illness at this point, they’re pretty standardized. I would say like 99 percent of companies are going to cover the 21. But there are times, for example, when somebody who has had previous health history that can’t get a critical illness, sometimes they’ll issue cancer policies or heart attack policies where they’re very specific to conditions. But for a standard critical illness policy, you can be pretty confident that it’s going to cover what every other company covers in that sense. And again, that’s where someone like myself would come in and say, “Here’s four options. I recommend this option because it has one or two better features than the other options.” But for the most part, they are pretty similar. It’s your disability where you start to see things that are different. For example, if you buy an injury-only policy, they’re only covering injuries. Or you buy one that’s only a five year policy. Then you’re only going to get coverage for five years. If you’re disabled for eight, they’re only paying for five. So there’s a lot more changes and intricacies and mapping out of a disability policy than a critical illness. And so sometimes for people who have kind of precarious health histories, I would recommend them buying an injury-only policy and perhaps a critical illness policy. They’re getting a bit of illness through their critical illness policy but if they’re excluded for a lot of things, it might not make sense to buy those higher end products and just do kind of a mix of the two. A lot of the time I see people kind of get confused or lost where you’re buying your own product versus if you’re an employee. So if you’re an employee, those types of contracts are very, very different because that contract is sort of decided between the insurance company and the employer. That’s where people really have to dig down and see for a critical illness or a disability how it’s structured and how it works, because they’re not in control of that. They’re not in control of how they’re putting it together. That’s the time when someone really should request their group booklet and say, “Okay, I need to look through this and make sure that it is what I want or do I need to top up and buy my own to support what I’m getting from my employer?” 


Tom: Yeah, I personally lean towards ignoring the employee side because if you leave that job and you’re older and have got some new condition—I say the same thing with life insurance too. To tie yourself to the employee thing—I’ve heard people say, “ Oh, I don’t need this because I have it covered under employee benefits.” But if you’re laid off next week or at your next job the benefits aren’t as good, or you’re retiring and you still want insurance, there’s just too many questions about relying on that employee one. 


Kristen: I’ve also seen recently too, a lot of employers are really starting to change what they’re paying in for and what the minimums are. Then you’re topping it up if you can afford to pay for more. It’s not necessarily becoming more and more favorable so you do run the risk of saying, “Yes, it’s great right now,” but that company could change it tomorrow if they wanted to. And, if you did leave, what does the other company have to offer? I’m of the same opinion as you, get your own. It’s great if you get both. If not, at least you know that you’ve got your own to fall back on. A lot of people are also opting to go self-employed and kind of do their own thing. But if you’re ten years into your career and now you’re going to be running your own business, well, how are you going to get that coverage? It’s nicer to have it, knowing that you can probably adjust it and increase it and change it should your career change and you’re not stuck with a major health condition and can’t get anything. 


Tom: Exactly. You’re just covered for it. If you’ve got the employee benefits, great. That can be something extra when it’s needed. But there’s certainly no need to be topping up those over whatever the minimum is when that money could be better put towards something else. 


Kristen: And I find it it’s more affecting younger generations where they’re just really excited to start working. And they say, “Great, I’ve got group benefits,” but they don’t understand what that means. It’s not until you’re a little bit older and more into your career where you say, “Okay, now I really should start thinking about this.” So it’s great if more people are educated upfront so when they’re starting they can take a look and close that off sort of thing. 


Tom: I know this is a question you can’t directly answer. How much do these things cost? There’s so many different levels to this, but just a general idea of how this can come together? 


Kristen: Yeah, it’s hard to answer because the things that play into it most are how old are you when you’re buying it and how much you’re buying? For example, I have some clients that are physicians that are making over half a million dollars and they’re in their 40s. They’re paying $300, $400 or $500 a month for disability insurance. I have other clients who are just starting out in their career who are paying $60 a month for $4,000 of coverage. So it really can differ. The thing that I always say to people is, you always want to protect as much as your income as you can because your lifestyle is based off of that income. If you’re living off $100,000 and you’re insuring $40,000, well, it’s going to be not so great when you’re on a claim, right? It’s going to help, but it’s not going to help to the fullest. And too, making it within your budget. There have been times where I have clients who are just starting out in a career and paying off so much student debt that they don’t have the cash flow at the time. But I always say, something is better than nothing even if you’re getting a small policy with the idea that you can increase it later and it’s within your budget. If you have $100 a month to spend on this, buy a policy that gives you as much as it can for $100. It’s kind of getting the balance between the two. The idea, though, when you are buying any type of disability or critical illness, the younger you are and the healthier you are, the cheaper it is. So somebody who buys it in their 20s versus 30s might save thousands and thousands of dollars over their career life by having bought it earlier on. Get it while you can when you’re younger, from a money and a health perspective. 


Tom: I assume if they wanted to change their policy in the future, they’d have to requalify, though, right? 


Kristen: Not necessarily. Sometimes, and again, with the higher level contracts, they have what’s called a future income option. What this means is, you buy the policy at around age 25 with $2,000 of coverage. That means if you were disabled, they would pay you a $2,000 tax-free every month until you could go back to work. They have a $2,000 policy, but there’s also a feature they’ve added on that they pay (for example) $5 a month for to allow them to increase that benefit amount every year if they want to up into a grand total of like $1,000,000 of income protection all under one policy without ever proving their health. For me, if I’m ever working with a young professional, this is a guarantee. You have to take this feature because that is the whole purpose of buying it—you’re protecting yourself later when your health perhaps isn’t able to buy you more coverage. 


Tom: The reason I was asking that was I did something similar with life insurance. I had gotten it earlier on and as time went on, I got healthier. I lost some weight and I started to do the math and was thinking, my current life insurance covers the mortgage and maybe two or three years of income. But that’s not actually that much. I was able to double my life insurance because of lost weight and actually paid about the same amount. But in that case, I did have to requalify so there were a few things going on there. 


Kristen: Yeah, and that’s the interesting thing. Life insurance works kind of in a different way. Let’s say you’ve got a 10-year term. Within that 10-year term, you’re probably going to buy another term after that. That’s one of the ones that I actually recommend to people if they are healthy, to shop for a new one when the time comes because it is usually more cost effective. From their perspective (the insurance company) if after 10 years you want to keep that life insurance policy, they’re wondering why? What happened? They’re not healthy? They’ll actually super increase your rate to keep it, whereas it is actually less expensive to buy a new one. Disability is the opposite. That’s one of the things that you buy and you never want to change. You never want to touch it. Again, there is much more of an exponential increase in price for disability than life insurance so it’s going to be very difficult to ever get the similar rate if you try and buy a new disability policy. 


Tom: One more thing… With these two insurances, disability and critical illness, when we talk about the terms of length, is it a set thing like life insurance where it might be 10 years, 20 years? Or is it to a certain age? I heard you say 65, but maybe that was just an example? What do these look like term-wise? 


Kristen: Most commonly you will see to age 65 as the coverage for disability specifically. And that’s just because that’s what we consider retirement. I know not everybody retires at 65, but from an insurance perspective, they say they’re going to cover you for the duration of your career. There are times where you’ve got a really serious health history. The insurance company might say they’re not willing to cover you to the age 65 because that’s a huge exposure, but if this condition does happen, they’ll pay it for five years. There’s usually five years (or age 75) that are kind of the two most common that you see. There probably are policies on it, but it’s very, very, very infrequent or rare that I ever see somebody buy 30-day payout or anything like that. It’s usually your full 65. When it comes to critical illness, though, that can work more similarly to a life insurance policy. Again, I commonly recommend that people buy the product that’s locked until age 75. And the reason why that is, like I said with disability, the older you are, the more expensive it becomes. If you can lock in that rate until age 75, that makes a lot of sense, especially because you’re getting higher in your risk level when you get close to the 75. When you buy a term 10, that might be for somebody who’s only worried because the next 10 years are tight. They’re saving for their kid’s education, carrying a mortgage, so on and so forth. They only need it for those 10 years and don’t want it any time after. A 10-year term would work for that. But there are different terms like 10, 15, 20 or 75, 65, even, for critical illness. But again, I usually recommend just get it for the long haul and you’re securing that, right? Because with any disability or critical illness, life insurance too, you can cancel it whenever you want. If you get to a point where you’re 60 and financially in a great spot and don’t need to worry about that, cancel it and not keep it to age 75, you can do that. And there’s no consequences, no penalties. I’m a very risk-adverse person. It’s probably the nature of my job, but I would say cover yourself for the long-run and then work backwards if you need to. 


Tom: Yeah. Then it’s in your hands. 


Kristen: Exactly. 


Tom: The insurance companies are forced to cover you, but you’re not forced to keep paying and continuing that every year. 


Kristen: Exactly. 


Tom: One more thing I did want to get back to was you mentioned how certain disability insurance with better plans allowed you to just have that note from a doctor. Are these plans more expensive than maybe the lesser ones? Because when we were talking about not wanting to have to deal with certain things during these bad times, you also don’t want to deal with fighting with your insurance company over whether or not you’re going to be approved. 


Kristen: Exactly. Yes. The higher end ones, because the contracts cover everything and have everything included, there is no negotiating at that point. It’s covered. If you buy a plan that excludes mental health and you’re trying to claim mental health, it’s not going to get paid and it’s going to be a fight. I think a lot of it boils down to education. And for me, like when I sit down with a client, I do a full interview with them so I know if, perhaps their job doesn’t allow them to get a higher end product, I’m going to get them the best product. But they’re going to know right from the beginning what is and isn’t covered and the corresponding cost. I always say, you get what you pay for, right? If you’re paying more, you’re getting a better contract. Sometimes people opt for the cheaper one just because it might be cheaper. But, like you said, are you getting all the coverages that you need? I think a lot of it really, really plays into knowing what you’re buying and that eliminates a lot of the stress at claim time. Also, too, whoever you’re working with to obtain these contracts. Me, personally, I’m very involved in helping clients at claim time. And the reason why that is, is because it’s a stressful time. And you can imagine a financial institution or insurance company, they are just numbers. They just need what they need. They’re going to ask you. They’re going to send you the paperwork. But you’re not in such a great state and there’s a lot of miscommunication between those two. It can get very feisty and fiery so having that third party source support you, makes it a lot smoother. But again, education up front so you know what you’re buying so you’re not disappointed at the time you’re buying it. Because for me, especially, like I want to make sure my client knows what they have because if they’re disabled, they’re still alive. I still have to support them and I still have to make sure that they’re not coming back to me and saying, “Oh, that you sold me something that was horrible and I should never have bought it. I wasted my money on it.” I find you’re running into all different types of scenarios, but most of the clients that I work with are very, very familiar and knowledgeable on what they’ve bought so that it makes the claim much smoother when it comes to that point. But yes, it does cost differently based on what types of programs you’re buying. 


Tom: And speaking of disappointment when it comes to claim time, with either of these, is there similar life insurance—policies where you don’t need to go through medicals and stuff like that? Because I know certainly with life insurance that it kind of becomes a problem where it’s not that you didn’t have to qualify, it’s more that you get qualified at the end. Is that a thing with these as well? 


Kristen: It is definitely a thing. And that’s what I’m saying about the difference types of contracts. Sometimes, unfortunately, people will recommend the cheaper product because it’s an easier sale, but it’s not going to be an easy discussion when they have to claim it. It’s not favorable for them. In my opinion, the more underwriting, the more information you can give upfront, the better, because then the insurance company has to waive the right to ask the questions later. Like you said, with life insurance, a lot of the time you run into things like mortgage protection insurance where they say, “Yeah, for $20 a month you get life insurance protection,” then something happens and they say, “Oh, well, you had previous health history so you’re not actually eligible for it,” even though you paid into it for 20 years. Same thing with disability. Programs like that, when you’re getting it that non-underwritten thing, they’ll say, “Now you’re covered in case you’re hurt,” and later say, “But only if you’re hurt because of X, Y and Z. And so there’s always that fine print. You really want to stay away from those kind of contracts. 


Tom: That’s why I figured. While you’re younger, healthier, get everything locked in, make those insurance companies ask those questions upfront so they can’t later. That’s perfect. 


Kristen: Exactly. 


Tom: Thanks for being on and explaining these two different types of insurance. Can you tell people where they can find you online? 


Kristen: Yes, of course. You can search us at Professionals’ Insurance Center  and follow us on Instagram. We’ve got some pretty fun, easy-to-understand financial tips that we do every week. And it’s @professionalsinsurancecenter. We’re pretty straightforward to find and we love to have you guys reach out. 


Tom: Great. Thanks for be on the show. 


Kristen: No problem. Any time, Tom. 

Tom: Thank you, Kristen, for sharing your insights on a very important topic, but one that many people don’t pay much attention to. You can find the show notes for this episode at If you have a moment, head over to our YouTube channel and subscribe there as we’ll be getting back to releasing never-before-seen  content, soon. You can search for Maple Money or go to and subscribe today. As always, thanks for listening. I look forward to see you back here next week.

On average, a large insurance company that sells disability insurance, as an example, they’ll pay out over $445MM a year in claims, so, it is something that is very prevalent and necessary, but not a lot of people think about it. - Kristen Fazio Click to Tweet