What is Disability Insurance?
It is a tax-free monthly payment that covers your expenses if your disability hinders youfrom working for a certain period or permanently.
While most disabilities can be visible to the naked eye, specific disabilities are not so easily recognized. Issues like mental health and chronic health also qualify as a disability.
How does the policy work?
Personalize your coverage by adding optional benefits and choosing the amount you want.
You don’t miss out on paying your monthly premiums.
If you become disabled, a claim must be filed.
When the waiting period ends, you will receive your monthly payments.
When you return to work or when your benefit period ends, your disability payments stop.
Why do you need disability insurance?
More common than you think Before the age of 65, more than 40% of Canadians become disabled for 90 days.
Replaces most of your paycheque You can potentially receive up to 80-90% of your take-home pay.
Protect your retirement savings The policy helps meet your financial obligations to help you avoid dipping into your retirement savings.
Protect your most valuable asset
Your most treasured asset is your ability to earn an income over a 30- or 40-year career. Based on your current salary, the below-mentioned gives you an idea of what you could achievebased on your current salary and age. This chart below assumes you are working up to age 65 with a 2.5% raise every year.
|Age 30||Age 40||Age 50|
How much does the policy cost?
Based on your salary, premiums often range from 1-9%. Below arevarious factors that can affect the policy cost:
Amount of coverage If you like to receive more money, the coverage will cost more.
Benefit period The longer you want to receive payments, it will cost more.
Waiting period If you are prepared to wait for a more extended period to receive your payments, your premiums will be less costly.
Age When you are young, disability insurance may costless money.
Health The healthier you are, the lower the policy cost will be
Occupation If you have a risky job, your premiums can be much higher.
How much income can you get?
The chart below indicates the maximum amount you could receive each month tax-free if you are faced with a disability. Note: These are just estimates; the amount you receive depends on certain circumstances, like your occupation and age.
|Annual income||Maximum monthly benefit|
What does the government give you?
Through the Quebec Pension Plan (QPP) and Canada Pension Plan (CPP), you can get disability coverage with limited benefits.
To qualify for Canada Pension Plan (CPP) disability benefits, you must “have a severe and prolonged mental or physical disability.”
If you have it through your employer, do you need disability insurance?
Group insurance provides only basic coverage. A personal disability plan and group insurance plan can help protect you and your dear ones should the worst happen.
|Group coverage||Individual coverage|
|How much coverage do I get?||Coverage amounts are often limited||You can choose your coverage amount|
|How flexible is the policy?||The coverage options are picked by your employer||You have the freedom to choose how long you need the policy and the coverage amount|
|Do I have the choice to change my coverage?||Changes can be made once a year or if there is a life-changing event||Yes, your coverage can be adjusted|
|If I leave my employer, what happens?||Unless there is an option to convert to individual coverage, your coverage comes to an end.||Your coverage remains the same because it’s not tied to a membership or a job|
|How much does the policy cost?||Typically, the policy is low-cost||Typically, it’s costlier than group coverage|
|Will the policy cost ever change?||Policy costs changeevery year||Policy costs stay the same for the entire duration of your policy|