Disability Insurance

  • Home
  • Disability Insurance

Our experts will reply you with a quote very soon

     
     

     
image

Disability Insurance in Canada

Coverage and Benefits

Disability insurance typically covers a percentage of your pre-disability income, often ranging from 50% to 70%. The exact coverage and benefits depend on the policy and its terms. Some policies may offer additional benefits, such as cost-of-living adjustments to account for inflation, rehabilitation benefits, and partial disability benefits.

Waiting Period

Disability insurance policies often have a waiting period before benefits kick in. This is the period of time the insured must be disabled before receiving benefits.

Occupation Class

The occupation of the insured person can impact the cost and terms of disability insurance. Some occupations are considered riskier, and individuals in those professions may face higher premiums.

It's crucial for individuals to carefully review and understand the terms of their disability insurance policy to ensure it meets their needs and expectations in the event of a disability. Consulting with our licensed insurance advisor or financial planner can help you make informed decisions based on your unique circumstances.

Premiums

Premiums for disability insurance can vary based on factors such as age, health, occupation, and the level of coverage. Generally, the younger and healthier the individual, the lower the premiums.

Tax Implications

Disability insurance benefits are typically considered taxable income. However, if the premiums are paid with after-tax dollars, the benefits may be received tax-free.

In Canada, disability insurance may be referred to by various alternate names, including:

  Income Protection Insurance

  Disability Income Insurance

  Income Replacement Insurance

  Wage Loss Insurance

  Business Income Protection Insurance


Who should consider Disability Insurance?

  • Income-Dependent Individuals: Those who rely on their income to cover living expenses, especially if they have dependents.
  • Sole Breadwinners: Individuals responsible for the majority of their family's financial support.
  • Self-Employed Individuals: People without employer-sponsored disability coverage, as they need to protect their income and business.
  • High-Income Earners: Individuals with higher incomes may have more to lose in the event of a disability.
  • Those Without Substantial Savings: Individuals who lack substantial savings to cover living expenses during a period of disability.
  • Individuals with Physically Demanding Jobs: Jobs with a higher risk of injury or physical strain may necessitate disability coverage.
  • People with Limited Sick Leave: P Individuals with limited employer-sponsored sick leave benefits.
  • Freelancers and Gig Workers: Those without traditional employer benefits should consider disability coverage.
  • Young Professionals: To secure coverage at a lower cost while in good health.
image

 


  Benefits of Disability Insurance

Income Protection

Disability insurance provides a source of income if you are unable to work due to a disability, helping you meet financial obligations.

Maintaining Lifestyle

It helps maintain your standard of living by covering ongoing expenses such as mortgage or rent, utilities, and other daily costs.

Peace of Mind

Provides financial security and peace of mind, knowing that you have a safety net in case of disability-related income loss.

Medical Coverage

Some policies offer additional benefits like rehabilitation support and coverage for medical expenses related to the disability.

Job Flexibility

Allows you to focus on recovery without the immediate pressure to return to work, fostering a healthier and more sustainable recovery process.

Customizable Coverage

Policies can be tailored to fit individual needs and circumstances, offering flexibility in coverage and premium options.

Protects Savings

Helps prevent depletion of savings or retirement funds to cover living expenses during a disability.

Support for Dependents

Provides support for dependents by ensuring a steady income stream even if the insured is unable to work

Tax Advantages

Premiums paid for disability insurance may be tax-deductible, providing potential tax benefits.

  Intricacies and Considerations

Definition of Disability

Policies vary in how they define disability, impacting when benefits are paid.

Waiting Period

The waiting period before benefits start, ranging from weeks to months.

Benefit Period

Specifies how long benefits will be paid once the elimination period is satisfied.

Coverage Limits

Policies may have limits on the amount or duration of benefits.

Occupation Class

Your occupation influences policy terms and premiums.

Premiums and Payment Frequency

Vary based on factors like age, health, and chosen coverage.

Own Occupation vs. Any Occupation

Policies may define disability based on the ability to perform "own occupation" or "any occupation."

Pre-existing Conditions

Some policies may have exclusions or limitations related to pre-existing health conditions.

Policy Riders

Additional options that can be added to customize coverage, such as cost-of-living adjustments or partial disability benefits.