Disability Insurance: Protect Your Income When Life Takes an Unexpected Turn
Have you ever seen a friend, colleague, or loved one unable to work for weeks—or even months—due to illness or injury? The financial impact of a lost income can be overwhelming. Now imagine it’s happening to you or someone in your family. What would that mean for your household? Most people would find it stressful, frustrating, and even frightening.
The good news? Disability insurance exists to protect your income in situations like this. If an accident or illness prevents you from working, disability benefits help bridge the financial gap.
Why Do You Need Disability Insurance?
Your most valuable asset isn’t your home, car, or retirement fund—it’s your ability to earn an income. If you suddenly couldn’t work, disability insurance would typically replace up to 66% of your gross monthly income.
It’s especially smart to purchase this type of coverage while you’re young and healthy. Premiums tend to be lower, and eligibility is easier. If you wait until you’re older or have a pre-existing condition, you may face higher premiums—or be declined altogether.
What Does Disability Insurance Cover?
Disability benefits are not just for rare or dramatic accidents. Many claims are for common health issues, such as:
- Mental health conditions and burnout
- Back or joint injuries
- Cardiovascular events
- Cancer or serious illness
- Recovery periods requiring time off as prescribed by a doctor
This can happen to anyone, at any age, in any profession—even office workers are prone to stress-related disabilities.
The Two Main Types of Disability Insurance
Short-Term Disability Insurance
Short-term coverage kicks in quickly—anywhere from a few days to two weeks after your disability starts—and typically pays benefits for up to 16 or 17 weeks.
💡 Pro Tip: If you don’t have short-term coverage, a good backup is to build a 3–6 month emergency fund to cover your living expenses during temporary disruptions.
Long-Term Disability Insurance
Long-term disability (LTD) insurance provides benefits for 2 years, 5 years, or even until age 65 or later, depending on your policy.
It typically comes with a longer waiting period—such as 30, 60, 90, or 120 days—before benefits begin. Some policies also offer additional benefits like vocational training to help you return to work.
✅ Every working adult should have long-term disability insurance. We recommend selecting coverage that lasts at least 5 years for meaningful financial protection.
How Much Does Disability Insurance Cost in Canada?
The cost of disability insurance varies based on your:
- Age
- Health
- Occupation
- Type and amount of coverage
However, the peace of mind it provides is truly invaluable. Most individual policies provide tax-free benefits if you’re paying the premiums with after-tax dollars.
💡 Tip: Always compare quotes and review the policy definitions with a licensed advisor to ensure you’re getting the right coverage for your needs.
How Do Insurance Companies Define Disability?
Each insurer defines disability differently. Generally, it means being unable to perform the duties of your own occupation due to illness or injury.
Some policies also recognize partial disabilities. Be aware: the definition used by your insurance company may differ from that of the Canada Pension Plan (CPP) or employer benefit plans. Understanding this is key before you buy a policy.
Does Term Life Insurance Cover Disability?
No. Term life insurance only provides a payout if the insured person dies during the policy term. It does not offer any benefits for loss of income due to illness or injury.
That’s why having both life insurance and disability insurance is important—they serve different (but equally vital) purposes in your financial plan.
Disability Insurance for Business Owners and the Self-Employed
If you own a business, you already understand the importance of budgeting and risk management. But what happens if you—or a key employee—become disabled?
A well-structured disability insurance policy can:
- Replace the owner’s income
- Cover fixed business expenses (rent, salaries, etc.)
- Protect the continuity of your operations
- Maintain confidence with lenders and partners
Whether you’re a sole proprietor or have a team, this type of coverage is an essential part of business continuity planning.
Why Work With an Experior Financial Group Associate?
As a licensed financial advisor affiliated with Experior Financial Group, I will help you:
- Evaluate your risk exposure
- Understand your insurance options
- Choose a disability plan that fits your goals and budget
- Ensure continuity of income in the event of illness or injury
You deserve the peace of mind that comes with knowing your income—and your family’s well-being—is protected.
👉 Request a free quote today and let’s build a plan tailored to your needs.