Brian A. Price and Associates

What is Disability Insurance?

Disability insurance is designed to provide an income replacement if you are unable to work due to injury, disability or illness.

disabilityYour main concern is likley to be how would I pay the mortage and my bills if I was unable to collect my salary. Disability insurance is aimed at people wanting the peace of mind that their house won't be at risk if something unfortunate happened preventing them from doing their job.

Here are some examples of events that disability insurance covers:

  • Car accidents,  (recovery times can run into weeks)
  • Sporting injuries (who hasn't seen a friend injured during a game of hockey)
  • Heart attack (stressful occupations take their toll)
  • Stroke (can affect workers in all lines of work)
  • Chemotherapy (adversely affects energy levels)

Some employers provide disability insurance which is divided into short term disability and long term disability and pays a portion of your salary for a given number of weeks. If you are lucky enough to have coverage, you should consider whether your employers policy is sufficient to cover your needs. There is nothing to stop you supplementing that income with an individual plan to make up the difference.

If you are self employed, work for a small company or an employee that doesn't provide a group plan the chances are your coverage is much less than you think. Government disability coverage from EI or WCB provide some basic coverage but elegibility is complicated and notoriously difficult to qualify for.

Whether disability insurance is a good option for you depends on 3 things:

  1. How much it costs you to maintain your lifestyle
  2. How much existing coverage you have (if any)
  3. What other sources of income you can access

If you have mortgage life insurance you should seriously consider adding disability insurance coverage which would provide a monthly income replacement to safeguard your home in the event your were unable to work for an extended period.

Disability insurance policies are available to cover just injury, just illness or both injury and illness.

Given the complexity of disability insurance and the wide variety of options we strongly recommend you talk to a licensed insurance professional to help tailor a plan to your needs.

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Canada chances of needing disability insurance