Income Replacement Benefits
Income replacements are meant for individuals, who have sustained a physical disability or injury through an accident and which has made them unfit for work. The individual should have been employed prior to the car accident. The objective of income replacement is to compensate for the lost earnings due to the individual’s lack of ability to work, after the accident.
The income replacement plan gives out bi-weekly or monthly payments to the victim, if the victim is not physically able to get back to work within two years after the accident.
An individual can seek full benefits of an income replacement plan or could possibly qualify for the payment arrangement if:
* he had suffered psychological or physical injuries within the 2-year period after the automobile crash.
* the person is mentally or physically unfit to return to work after the accident.
* he was self-employed or a working professional before the accident.
* the individual was receiving Employment Insurance Benefits and
* the victim had worked for a minimum of 26 weeks out of the 52-week period prior to the accident.
If the individual satisfies the above mentioned eligibility requirements, then he would get bi-weekly payments, which would certainly be at least 80 % of the total net take home he made through his job or business. The net take home is the yearly earnings minus pension plan payments, employment insurance premiums, income tax, etc. The total amount received would be based upon the information filled in by the person in the income replacement application. The payments would begin flowing in within 10 days, once the application form and the disability certificate have been submitted.
The main goal of the benefits plan is to exactly replace any income loss at the time of disability. The periodic payments from the plan would continue till the person’s retirement age, keeping inflation and additional economic factors in mind.
Disability Duration and Expenses
To qualify for the income replacement plan, one would not have to be permanently disabled; the plan also compensates any financial loss emerging out of temporary disabilities. This is a fantastic feature, as short-term disabilities also have tremendous impact on one’s financial security and health for the specific duration. Many people think that an income replacement plan is too expensive. This is not true, as the expenses are usually depended on several factors and conditions.
Picking a Firm
There are a few companies offering income replacement services to clients. As this is a relatively complicated financial arrangement, especially for beginners, it is important that the victim goes through the fine prints of the document and understands the arrangement in the most detailed way. If there are doubts, then it should be made clear instantly.