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.
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.
Monthly income
Payments replace part of your paycheque each month.
Guaranteed
Guaranteed rates for your coverage until age 65.
Personalized
Customize your plan to suit your personal needs.
It’s more common than you think
27% of Canadians aged 15 and older had at least one disability in 2022.
Replaces most of your paycheque
Potentially receive up to 80-90% of your take home pay.
Protect your retirement savings
Disability insurance can help you meet your financial obligations so you may be able to avoid dipping into your retirement savings.
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.
Premiums often range from 1-9% of your salary, but each case is different. Here are some factors that can affect cost:
Coverage amount
The more you’d like to receive, the more it will cost.
Benefit period
It’ll cost more the longer you want to receive payments.
Waiting period
Your premiums will be less expensive if you’re willing to wait longer to receive payments.
Age
Disability insurance may be less expensive when you’re young.
Health
Your costs will be lower the healthier you are.
Occupation
If you have a dangerous job, your premiums can be higher.
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.
You must “have a severe and prolonged mental or physical disability” to qualify for CPP disability benefits. You may be able to get disability coverage through Canada Life under a more relaxed definition.
The CPP’s average monthly benefit is $966.43 and the maximum in 2019 is $1,362.30.
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 VS Individual coverage
How much coverage do I get?
Group coverage: Coverage amounts are often limited
Individual coverage: You choose your coverage amount
How flexible is it?
Group coverage: Your employer often picks the coverage options
Individual coverage: You choose the coverage amount and how long you need it
Can I change my coverage?
Group coverage: Typically, you can make changes once a year or if there’s a life-changing event
Individual coverage: Yes, you can adjust coverage
What happens if I leave my employer?
Group coverage: Your coverage ends unless there’s an option to convert to individual coverage
Individual coverage: Your coverage stays the same because it’s not tied to a job or membership
How much does it cost?
Group coverage: Typically, it’s low cost
Individual coverage: Typically, it’s a higher cost than group coverage
Will the cost ever change?
Group coverage: Costs can change every year
Individual coverage: Costs stay the same for the duration of your policy