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Disability Insurance

Disability Insurance provides a monthly income if you`re unable to work due to a serious injury or illness. 

Useful facts:

  • A typical 30-year-old has a four times greater chance of becoming disabled than he does of dying before age 65.

  • A full one in six Canadians will be disabled for three months or more before the age of 50.

  • There are two main options: long-term disability (LTD) and critical illness (CI) policies. Both pay you money in case of an illness or disability, but they do it in different ways.

  • If you work for a large company, you likely already have some kind of long-term disability insurance. Coverage differs greatly from one employer to another, and if you’re self-employed or you work for a smaller company, you may have no coverage at all.

  • Choice from “any occupation” or “own occupation.” Own occupation offers a better definition, a total disability means the inability to work at your regular job. With “any occupation,” total disability means the ability to perform the duties of any job. That means that if you become disabled, but you could perform a less demanding job, you may not get the benefit. Often plans offer “own occupation” coverage for the first two years of the benefit period and then switch to “any occupation” after that.

  • When evaluating your plan, keep in mind that many disability plans include a cap on benefits to ensure you are adequately covered.

  • If you earn a high income, you may want to consider a private disability plan to supplement your group benefits.

  • When calculating your coverage, keep in mind that payments from private disability insurance are tax-free, while the payout from most corporate plans is taxable.

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