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Disability Insurance for Canadians


You can lose your lifestyle in the blink of an eye


If you lose your ability to earn a living, you could lose your lifestyle. God forbid, if you meet with an accident or serious illness, that leaves you out of your work and makes you unable to earn money, your provincial health plan can provide you with coverage for the medical bills. However, to replace your lost income, you definitely need disability insurance.

Disability Insurance Canada

Why do you need disability insurance?

Your college education of your children, your retirement savings, your lifestyle all depend on your ability to earn a living. In the unfortunate event of you becoming disabling, you have to meet additional expenses to cover bills related to your disability, in addition to earning less. How to meet this lost income? You need disability insurance as your protection against this kind of untoward incidents.

Even though you might have the necessary health insurance, the cost for treatment and recovery could turn out to be significant. By having disability insurance, the money you receive will help make up for the extra cost of treatment.

Even if you already have disability insurance as provided by your employer, it may turn out inadequate. Again, if you change your jobs, your employer-sponsored disability insurance is likely to end with your employment. Further to it, there is limit to the disability benefit provided under the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP).

Also if you are 55 and younger, and your disability lasts for more than 90 days, duration of that disability averages between 2.1 and 3.2 years.

According to the Canadian Life and Health Association, a woman aged 35 is about seven times more likely to experience disability than death before 65.

Life and Disability Insurance are the most important parts of every sound financial plan.

Individual plans are expensive compared to Group plans while the former have better terms and conditions while the premiums are normally locked till 65. These plans are right for self-employed individuals with a guarantee on the terms and conditions of the plan as these cannot be changed by the insurance company.

For professionals and executives, private plans have “own occupation” as definition of disability. This means you cannot be made to work in another occupation, considering your experience and training by the insurance company. However, you should be careful about Association Disability plans as the rates, terms and conditions could change for group plans at any time.

In Canada, the disability benefits paid are tax-free for individual paying for their own premium. In the case of companies paying the premium, the benefits are taxable and the grossed up should be reflected. Check your group plan to see whether there is any low minimum. If found, contact your company for making a disability top-up plan.


Probability of having a long term disability chart - for disability insurance Canada.