How to cover bills if you can’t work due to accident or sickness in Ontario
Unexpected illnesses or accidents are complex enough without lost wages and out-of-pocket medical expenses adding to the stress. Read on to learn the fundamentals of accident and sickness insurance in Ontario and other resources to protect yourself and your family.

What is accident and sickness insurance?

Accident and sickness insurance can help cover expenses such as medical bills and lost wages in the event of an injury or illness. You can purchase it as a standalone or add it to supplement an existing health insurance policy. The policyholder pays regular premiums, and in the event of an accident or illness, the insurance company pays out based on the terms of the policy, which may include medical bill coverage, lump sums for certain injuries or illnesses, and payment for lost wages.

What are the benefits?

Having accident and sickness insurance in Ontario provides two main advantages. 

1. Cover lost income

While you may be eligible for government assistance for lost income, it could take weeks or even months for these supports to kick in, leaving you and your family without cash flow for multiple bill cycles, uncertain when you’ll get relief.  In contrast, accident and sickness insurance kicks in as soon as your claim is approved.

2. Fill in coverage gaps

It can also pay for expenses not covered by your health insurance policy. Being able to afford the highest quality comfort and care relieves the financial burden and allows you to concentrate on your well-being.

What should you consider when buying accident and sickness insurance in Ontario?

Coverage and policy limits

Is the coverage for medical bills and lost wages sufficient? Does it cover scenarios you’re most likely to face? Does it impose limitations, and how?

Exclusions

Check that the insurer won’t restrict your coverage because of pre-existing conditions. Believe it or not, you should also check how pre-existing conditions may impact your coverage for specific injuries or illnesses.

Premiums

Is the premium paid monthly? Is it affordable for your budget and cash flow needs? 

Deductibles & out-of-pocket expenses

If you can avoid deductibles and out-of-pocket expenses, you can keep more cash in your pocket from the start.

Key resources in addition to accident and sickness insurance

Emergency savings

No matter what your financial situation or life goals, it’s critical to have emergency savings. This is especially important when faced with unexpected expenses or lost income due to an accident or sickness because it means you have immediate access to cash reserves, even before your accident and sickness insurance claim.

If you’re early in your financial journey and cash flow is tight, just start by saving 1 month’s worth of household expenses. As soon as you get a raise or can free up the cash flow, build towards between 3 and 6 months’ savings.

While you may want to keep these savings in a separate, high-interest bank account so you don’t see it daily, it should be an account you can withdraw or transfer money from immediately in case of emergency. Even a 24-hour withdrawal period is too long in true emergencies.

Emergency savings for entrepreneurs

Personal emergency savings are even more critical for self-employed individuals because you don’t have the same safety nets as traditional employees, such as paid sick leave. A substantial emergency fund can ease the financial and emotional toll of taking time off work to recover.

Your business may not be able to continue operating (and generating revenue) at all without you at the helm. Having savings in your business bank account can help you cover commercial rent, utilities, salaries, and other overhead for a few months.

Government programs

There are government programs available in Ontario through the provincial and federal governments for those who are unable to work due to illness or injury. While these are incredibly important supports, the lengthy application processes, eligibility requirements, and approval timelines make emergency savings and accident and sickness insurance your lifelines for the interim.

The Employment Insurance (EI) sickness benefits program provides temporary financial assistance for people unable to work due to illness. As of 2023, the program can cover 55% of your earnings up to a maximum of $650 a week for up to 26 weeks. You must meet eligibility requirements and provide a medical certificate. The key to remember is that the EI sickness benefits won’t kick in until you’ve already used up your employer’s sickness benefits.

The Canada Pension Plan (CPP) disability benefits program provides monthly payments to individuals who are unable to work in a substantial capacity because of a long-term or indefinite disability. It takes up to 4 months for claims to be approved unless an individual’s condition is determined to be grave, in which case they aim to process the claim within 30 days. There are also restrictions around who qualifies based on age and whether the person has made enough CPP contributions in the past.

The Ontario government also offers financial assistance through the Ontario Disability Support Program (ODSP) for individuals who have a disability that’s expected to last for at least one year and who require financial assistance for basic needs such as food, clothing, and shelter. Single people may receive up to $1228 as of the date of posting for shelter and basic needs, plus medical and dental benefits, and individuals with a spouse or dependents may be eligible for more. There are requirements to remain eligible for the program, including a cap on assets, monetary gifts, and income, and an analysis of your family size, shelter costs, and living expenses.

Safeguard your income and family: Accident and sickness insurance in Ontario 

When it comes to protecting your finances during unexpected health events, having a plan in place is crucial. Consider all available options, such as accident and sickness insurance, emergency savings, and government programs. By understanding the role of each resource, you can make an informed decision about creating a comprehensive safety net with supplemental accident and sickness insurance.

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