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Disability Insurance

Updated: June 12th, 2023

Disability is a reality that can affect 15% of the world’s population (World Health Organization), with potentially devastating consequences for one's financial stability. It is crucial to be prepared and have a safety net to safeguard your income and financial well-being in the event of a disability. In Canada, disability statistics reveal the significance of this issue, as millions of individuals face limitations that impact their ability to work and earn a living.

According to Canadian Survey on Disability (CSD), approximately 6.2 million individuals aged 15 and older report some form of disability. While governmental programs exist to assist individuals with disabilities, it is important to consider additional options to protect your financial future. Private disability insurance offers numerous benefits, providing an extra layer of security beyond government assistance.

Disability in Canada

Disability in Canada

The CSD adopts a social model of disabilities, recognizing that disabilities arise from the interaction between a person's functional limitations and the barriers present in their environment. The previous study conducted by CSD took place in 2017. A more recent study was conducted in 2022, and the results are expected to be released in December 2023.

In the StatsCanada study “Measuring disability in Canada”, a staggering 6.2 million Canadians aged 15 and older, accounting for approximately 22% of the population, reported living with some form of disability. These individuals face various challenges and have historically experienced discrimination and abuse, such as segregation, institutionalization, and compulsory sterilization.

It was not until the late 1970s that significant changes began, driven by organizations like the Coalition of Provincial Organizations of the Handicapped, which later became the Council for Canadians with Disabilities. These changes aimed to secure equal rights for disabled individuals. Key legislation, including the Charter of Rights and Freedoms, the Canadian Human Rights Act, and the Employment Equity Act, have been implemented to protect the rights of disabled Canadians.

As Canada strives for a more inclusive society, it is essential to recognize the significance of disability and work towards removing barriers and promoting equality for all Canadians. Through awareness, understanding, and implementing inclusive policies and practices, the country can foster a society that embraces diversity and supports the needs and rights of individuals with disabilities.

Private Disability Insurance

Private disability insurance plans offer customizable coverage, allowing you to tailor a policy to your needs and occupation. They can provide financial support through regular income replacement, helping cover daily expenses, medical bills, and other financial obligations during recovery. Additionally, private disability insurance can often offer faster and more flexible claims processing, ensuring prompt assistance when needed.

While government programs provide a safety net, private disability insurance offers additional peace of mind by filling potential gaps and providing enhanced financial protection. Here are some important factors to consider when exploring private disability insurance:

Deciding if You Need Disability Insurance

Disability insurance can provide valuable protection for you and your family in the event of an unexpected illness or accident that leaves you unable to work and earn an income. Assessing your circumstances is key to determining if private disability insurance is necessary for you. Consider the following factors:

  • Your occupation and the potential risks associated with it
  • Your financial obligations and the impact of lost income
  • The level of coverage provided by existing government programs

If you have dependents or significant financial responsibilities, private disability insurance can offer added security and ensure continued financial stability in the face of a disability. While many employers offer disability insurance, it's important to note that you can also obtain disability insurance plan through a life and health insurance agent.

If you're self-employed, obtaining disability insurance can help cover your business expenses if you are unable to work. Here are a few things to consider when buying disability insurance:

  • Check with your employer to determine if you already have group disability coverage through your employer's plan.
  • Shop around and compare options, especially if you're considering private disability insurance.
  • Explore group insurance options offered through unions, guilds, or professional and alumni associations.
  • Understand the renewal process and any potential premium increases as you age.

By carefully evaluating your needs and considering these factors, you can make an informed decision about whether disability insurance is right for you.

Short-term Disability Insurance

Short-term disability insurance typically provides coverage for a limited duration, often ranging from a few weeks to a year. It is designed to support individuals during the initial stages of a disability when recovery and return to work are expected within a relatively short period. Short-term disability insurance offers income replacement, covering a portion of your salary or wages while you cannot work. This temporary financial support can help you maintain your standard of living and manage immediate expenses.

Long-term Disability Insurance

Long-term disability insurance provides coverage for an extended duration, typically beyond the timeframe covered by short-term disability insurance. It is intended for individuals whose disabilities are expected to last for an extended period, potentially even until retirement. Long-term disability insurance offers sustained income replacement, ensuring you have financial stability over the long term. This coverage helps you manage ongoing expenses, such as mortgage payments, healthcare costs, and daily living expenses.

Finding the Right Insurance For You

When seeking private disability insurance, finding the right policy that suits your unique needs is crucial. Consider coverage options, waiting periods, benefit amounts, and policy exclusions. Review the terms and conditions carefully, ensuring you understand the coverage's extent and limitations. It can be beneficial to consult with insurance professionals or financial advisors who specialize in disability insurance to guide you through the selection process.

By carefully assessing your needs and exploring private disability insurance options, you can secure comprehensive financial protection that complements existing government programs. The right coverage will provide peace of mind, allowing you to focus on your well-being and recovery while knowing that your financial future is safeguarded.

Top 5 Private Disability Insurance Providers in Canada

Top 5 Private Disability Insurance Providers in Canada

Private disability insurance plays a vital role in protecting individuals from the financial impact of a disability. These insurance plans offer customizable coverage and income replacement benefits, providing peace of mind and financial stability during challenging times. This article will explore Canada's top five private disability insurance providers and provide an overview of the expected costs associated with each.

Manulife Financial

Manulife Financial is a leading insurance provider in Canada, offering a range of disability insurance products. The cost of disability insurance from Manulife will vary depending on factors such as age, occupation, health condition, coverage amount, and waiting period. On average, individuals can expect to pay between CAD50 and CAD200 per month for a comprehensive disability insurance policy from Manulife.

Sun Life Financial

Sun Life Financial is another prominent insurance company in Canada known for its comprehensive disability insurance options. The cost of disability insurance with Sun Life will depend on similar factors, including age, occupation, health, coverage amount, and waiting period. On average, individuals can expect to pay between CAD40 and CAD150 per month for disability insurance from Sun Life.

Great-West Life

Great-West Life is a well-established insurance provider that offers disability insurance tailored to individual needs. The cost of disability insurance with Great-West Life will be influenced by similar factors as mentioned earlier. On average, individuals can expect to pay between CAD50 and CAD180 per month for disability insurance coverage from Great-West Life.

RBC Insurance

RBC Insurance is a trusted name in the insurance industry and provides disability insurance options to meet various needs. The cost of disability insurance from RBC Insurance will depend on age, occupation, health, coverage amount, and waiting period. On average, individuals can expect to pay between CAD40 and CAD150 per month for disability insurance coverage from RBC Insurance.

Desjardins Insurance

Desjardins Insurance is a reputable insurance provider in Canada, offering comprehensive disability insurance coverage. The cost of disability insurance with Desjardins will vary based on age, occupation, health condition, coverage amount, and waiting period. On average, individuals can expect to pay between CAD40 and CAD160 per month for disability insurance from Desjardins Insurance.

These approximate cost estimates can vary significantly based on individual circumstances. Factors such as occupation, health condition, desired coverage, and waiting periods can all influence the final cost of disability insurance.

Governmental Disability Programs

Governmental Disability Programs

Assisted Living Program

If you cannot work and have been formally assessed by a medical professional, you may qualify for the Assisted Living Program. This program offers three major components: in-home care, adult foster care, and institutional care. Its aim is to improve the quality of life at home and in the community. To learn more about eligibility and application details, visit the Assisted Living Program page.

Registered Disability Savings Plan (RDSP)

The Registered Disability Savings Plan is a long-term savings plan designed to assist Canadians with disabilities and their families in saving for the future. Eligible Canadian residents under the age of 60 can benefit from this plan, which the Canada Disability Savings Grant and a Canada Disability Savings Bond supplement. To find out more about the RDSP and its advantages, visit the Registered Disability Savings Plan page.

Grants for Students with Disabilities

Students with disabilities now have the opportunity to apply for the Canada Student Grant for Students with Permanent Disabilities. This grant provides financial assistance, with an annual award of CAD2,000 for eligible students. Note that this grant may not be available for universities in the Northwest Territories, Nunavut, and Quebec, as these regions have their own student financial assistance programs. Learn more about the grant and its application process on the Grants for Students with Disabilities page.

Canada Pension Plan (CPP)

The Canada Pension Plan provides disability benefits as a monthly payment to individuals who meet specific criteria. To be eligible, you must be under 65 years old, have made enough contributions to the CPP, and have a mental or physical disability that regularly prevents you from engaging in substantially gainful work. The CPP offers two types of disability benefits: CPP Disability Benefit for individuals under 65 who are not receiving the CPP retirement pension, and CPP Post-Retirement Disability Benefit for those between 60 and 65 who are already receiving the CPP retirement pension. Find out more about eligibility and application details on the Canada Pension Plan Disability Benefits page.

Understanding Canadian Disability Insurance and government disability programs is crucial for securing financial protection in the event of a disability. Canadian Disability Insurance offers customizable coverage and income replacement benefits, while government disability programs provide various forms of support. Individuals can enhance their financial security by combining private insurance and government benefits and ensure adequate coverage for their specific needs.


Can I Have Both Canadian Disability Insurance and Government Disability Benefits?

Yes, it is possible to have both Canadian Disability Insurance and government disability benefits. Canadian Disability Insurance is designed to work alongside government programs, filling potential gaps in coverage and providing additional financial protection.

However, it's important to review the terms and conditions of your insurance policy and understand how it may interact with government benefits. Some insurance policies may coordinate benefits, meaning the amount you receive from your insurance policy could be reduced by the amount you receive from government disability benefits. It's recommended to consult with your insurance provider and carefully review your policy to understand how it aligns with government disability benefits.

Who is Eligible for Canadian Disability Insurance?

Eligibility requirements for Canadian Disability Insurance vary depending on the specific insurance provider and policy. Generally, individuals who are employed and earning an income can apply for disability insurance coverage.

Self-employed individuals may also be eligible for disability insurance. However, it's important to note that eligibility may be influenced by factors such as occupation, pre-existing medical conditions, and the specific terms and conditions of the insurance policy.

How Does Canadian Disability Insurance Work?

When you have Canadian Disability Insurance coverage and experience a disability that prevents you from working, you can file a claim with your insurance provider. The claims process typically involves submitting documentation, such as medical reports, to support your disability claim.

If your claim is approved, you will receive regular income replacement payments, typically a percentage of your pre-disability income, for the duration specified in your policy. These payments help you meet your financial obligations, cover living expenses, and maintain your quality of life while you cannot work due to disability.

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