Disability insurance works when you can’t. It can give you tax-free monthly income to help pay expenses if an illness or accident stops you from working.
It can give you a tax-free monthly payment to help replace your income and cover your expenses if an illness or injury keeps you from working.
While a disability can often be visible to the naked eye, not all disabilities are so easily recognized. Chronic pain or a mental health issue can also qualify as a disability.
- Choose the amount you want and add optional benefits to customize your coverage.
- Pay your monthly premium.
- File a claim if you become disabled.
- Receive your monthly payments when the waiting period ends. The waiting period is the number of days from the date you’re disabled until the benefit start date.
- Your payments stop when your benefit period ends or you return to work.
Your ability to earn an income over a 30- or 40-year career, is your most valuable asset. Here’s an idea of what you could earn over the rest of your working life based on your age and current salary. This chart assumes a 2.5% raise every year and that you’re working to age 65.
|
|
Age 30 |
Age 40 |
Age 50 |
|---|---|---|---|
|
$70,000 |
$3,844,975 |
$2,391,043 |
$1,255,235 |
|
$90,000 |
$4,943,539 |
$3,074,199 |
$1,613,873 |
|
$120,000 |
$6,591,385 |
$4,098,932 |
$2,151,831 |
|
$150,000 |
$8,239,231 |
$5,123,665 |
$2,689,789 |
|
$200,000 |
$10,985,641 |
$6,831,553 |
$3,586,385 |
|
$250,000 |
$13,732,051 |
$8,539,441 |
$4,482,981 |
Premiums often range from 1-9% of your salary, but each case is different. Here are some factors that can affect cost:
The following chart shows the maximum amount you could receive tax-free each month if you faced a disability. These are just estimates – the amount you’d actually receive depends on specific circumstances, like your age and occupation.
|
Annual income |
Maximum monthly benefit |
|---|---|
|
$35,000 |
$2,200 |
|
$50,000 |
$2,975 |
|
$100,000
|
$5,200 |
|
$120,000 |
$5,925 |
|
$140,000 |
$6,625 |
|
$200,000 |
$8,550 |
|
$300,000 |
$11,350 |
|
$500,000 |
$16,050 |
|
$1,000,000 |
$25,000 |
You can get disability coverage through the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) but they provide limited benefits.
Group insurance is a great start, but it usually only provides basic coverage. A personal disability policy complements group insurance – together, they can help protect you, your family and your lifestyle should the worst happen.
|
|
Group coverage |
Individual coverage |
|---|---|---|
|
How much coverage do I get? |
Coverage amounts are often limited |
You choose your coverage amount |
|
|
Your employer often picks the coverage options |
You choose the coverage amount and how long you need it |
|
Can I change my coverage?
|
Typically, you can make changes once a year or if there’s a life-changing event |
Yes, you can adjust coverage |
|
What happens if I leave my employer? |
|
Your coverage stays the same because it’s not tied to a job or membership |
|
How much does it cost? |
Typically, it’s low cost |
Typically, it’s a higher cost than group coverage |
|
Will the cost ever change? |
Costs can change every year |
Costs stay the same for the duration of your policy |