Insurance Basics: Health, Dental, Life, and Disability Coverage

Health and protection insurance is often one of the least understood parts of personal finance, mostly because it's easy to ignore until you actually need it. Whether your coverage comes through an employer, a spouse's plan, or a policy you bought yourself, here's what the main pieces usually cover.

Extended health care

Extended health insurance tops up what your provincial health plan doesn't cover: things like prescription drugs, physiotherapy, massage therapy, mental health counselling, vision care, and medical equipment. Most plans have annual maximums per category, so it's worth knowing your limits before booking an expensive treatment.

Dental care

Dental coverage is usually split into tiers: basic care (cleanings, exams, fillings), major restorative care (crowns, bridges), and sometimes orthodontics. Preventive care is often covered at a higher percentage than major work, which is part of why regular checkups are encouraged.

Disability insurance

Disability insurance replaces a portion of your income, often 60% to 70%, if you can't work due to illness or injury. Short-term disability typically covers weeks to months; long-term disability can last years. For many working-age people, the ability to earn an income is their most valuable financial asset, which makes this coverage worth understanding.

Life insurance

Life insurance pays a tax-free lump sum to your named beneficiary if you pass away while covered. The two main types are term life (coverage for a set period, usually more affordable) and permanent life (lifelong coverage, typically more expensive). Make sure your beneficiary designations are up to date, especially after a major life change like marriage, separation, or having a child.

Coverage through an employer usually ends when you leave that job, so it's worth knowing whether you have enough protection on your own.

How claims usually work

1. Pay for the eligible expense (or have it billed directly if your provider offers direct billing)
2. Submit your claim through the insurer's website or app, along with receipts
3. The insurer processes the claim against your coverage percentages and annual maximums
4. Reimbursement is typically deposited directly to your bank account within a few business days

If you and a spouse both have coverage, coordination of benefits may let you claim the remaining balance on the second plan.

Before a big expense

For anything significant, like orthodontic work or a major dental procedure, ask your provider for a pre-determination, which tells you in advance what will actually be covered. Knowing your out-of-pocket cost ahead of time makes it much easier to plan for it in your budget.