Disability Insurance

Disability insurance is designed to replace income you lose if you become unable to work due to an accident or illness. Many people have some form of disability insurance, either through their employer or through government benefits such as Employment Insurance or the Quebec/Canada Pension Plan.

Long-term disability plans provided by an employer, or purchased privately, pay an insurance benefit based on a percentage of your employment income, usually 66% of your gross wages. The benefit is payable after the waiting period (usually from 30 to 180 days) has expired. The insurance company will continue to pay you this benefit for as long as you remain disabled or until the benefit period runs out, whichever comes first. Many disability programs provide benefits to age 65; however some plans have benefit periods as short as five years.

You also have to satisfy the "definition of disability" for your insurance plan. Under many disability plans, this means you are considered disabled if you are unable to perform "any occupation" for which you are reasonably trained or suited. For example, you may not be able to perform the duties of your previous position, but you may be able to work at a different job. In this case, you may not be eligible for benefits.

It may be a good idea to review your present disability insurance program with your independent advisor as part of your overall financial planning.

Employment Insurance
Canada Pension Plan
Why Use an Independent Advisor?