Disability Insurance

We are a boutique financial planning and investment firm based in Oakville. Part of our process is protecting your most valuable asset, your ability to earn income.

Our team can provide you with disability insurance solutions and the best disability insurance rates on the market.

Contact us at (416) 274-1322 and keep scrolling to learn more.

The Basics

Which income option would you choose, A or B?

A. $100,000 per year if you can work and $0 per year if you can't

B. $98,500 per year if you can work and $61,200 tax-free you can't

Disability insurance helps protect your most valuable asset, your ability to earn income, if you become disabled and cannot work.  The purpose is to provide a monthly benefit to ensure you and your family maintain your lifestyle while you recover.

Although you may have disability insurance coverage through your group benefits at work, the terms and definitions are often not fully understood.  A personal disability insurance policy ensures your needs are met if you cannot work.  See FAQ to learn more.

FAQ

Click each question below to display the answer.

What are most common disability claims?

Nearly 50% of disability claims are musculoskeletal or psychological related.

How is disability insurance underwritten?

The underwriting process is similar to that of life insurance or critical illness insurance. Depending on the amount of disability insurance you apply for will determine the underwriting requirements. In most but not all cases a nurse will come to your home to do a paramedical exam and obtain a blood and urine sample. However, proof of income is always required when applying for disability insurance, typically 2 years worth. The underwriter has to make sure the amount of disability insurance applied for aligns with your current income.

What affects the cost of my disability insurance policy?
  • Age: The longer you wait to get disability insurance the more expensive it becomes.
  • Benefit: The more disability income you apply for the more expensive it becomes.
  • Occupation class: Your premium is tied to what you do for a living. As an example, if your job is more dangerous, your premium will be higher.
  • Employment status: Premium is dependent on whether you’re an employee, part-time employee or a business owner.
  • Elimination period: The amount of time you must wait before you claim you receive your disability benefit. The shorter time frame will result in a higher premium.
  • Benefit period: The amount of time you will receive your disability benefit for. The longer you select, the more expensive.
  • Riders: Additional features to your policy will result in a higher premium. See FAQ ‘additional features’ to learn more.
Are there additional features that can be added to a disability insurance policy?

Each insurance company has unique ‘riders’ or additional features that can be added to your disability insurance policy. Below are some of the most common and popular riders:

  1. Cost of living adjustment (COLA): COLA increases your disability benefits to account for inflation.
  2. Additional insurance: If you foresee your income increasing, purchasing additional insurance gives you the option to buy additional disability benefit without having to go through a medical again. It sits in your back pocket and you can choose when to activate it, so long as the total benefit lines up with your new income.
  3. Own occupation: This enhances the definition of total disability by removing the restriction that you must not be working. If you are unable to perform the duties of your occupation you would still be considered totally disabled if you choose to work in a new occupation.
How do I make a claim for disability insurance?
  1. Notify your insurance advisor: Your advisor will review your disability policy and guide you through the claims process.
  2. Notify the insurance company: The insurance company will send your advisor the appropriate claim forms.
  3. Your advisor and physician will work with you to complete the claim forms.
  4. Submit claim forms.
  5. Visit physician regularly.
How long do I have to wait to collect long term disability insurance?

This is dependent on how your policy is set up. The ‘elimination period’ is the amount of time you must be disabled before you can start claiming the disability benefit. You can select a shorter elimination period but this comes with a higher insurance premium. Traditional elimination periods are 90 days but can be shortened to, say, 30 days.

How long do the disability insurance benefits last?

This is dependent on how the policy is set up. There are two factors that affect how long the benefits last: the ‘benefit period’ and the definition of disability. The ‘benefit period’ is the amount of time you will be paid if you’re disabled. The longer the benefit period, the more expansive the premium. For example, selecting a 2 year benefit period will be less expensive than choosing a to age 65 benefit period.

See 'Own vs any vs regular occupation' FAQ to understand the various disability definitions.

Are my disability insurance benefits taxed?

If you own a disability insurance policy personally and you are paying the premiums, your benefits are not taxable. However, if your employer is paying the premium on your group benefits disability plan then the benefits are taxable.

Own vs any vs regular occupation?

Regular occupation: You are considered to be totally disabled if you are unable to perform the duties of your ‘regular occupation’ due to injury or sickness. Regular occupation is typically defined as the occupation you were doing at the time of disability. You can collect disability benefits so long as you are disabled. If you choose to work in a different occupation, the insurance company will take in to account your new income and prorate your disability benefit. For example, if you were earning $100,000 before becoming disabled and your new job pays $50,000, your disability benefit would be reduced by 50%.

Own occupation: You are considered to be totally disabled if you are unable to perform the duties of your ‘regular occupation’ due to injury or sickness. Your disability benefits will not be prorated if you choose to work another occupation so long as you cannot perform the duties of your regular occupation. Therefore, you could earn an income and continue to earn your disability benefit from your previous occupation.

Any occupation: You are considered to be totally disabled if you are unable to perform ‘any occupation’ for which your education, experience and skills are suited and where you can be gainfully employed. This is by far the most ‘loose’ definition of disability and often claims will be denied. Any occupation often arises in your disability plan through your group benefits. Typically it will state 2 years of disability under ‘regular occupation’ followed by ‘any occupation’ thereafter.

Biggest differences between work and personal di policy?
  1. Portability: If you own a personal disability insurance policy, no one can take it away from you. If you have coverage through work and leave your job, you will no longer have disability insurance.
  2. Personal: A disability insurance policy you own can be tailored how you wish. You can shorten the waiting period, increase the length of time your disability benefits will pay out and add custom benefits (riders).
  3. Definitions: Most group disability benefit policies will pay disability under ‘regular occupation’ for 2 years followed by ‘any occupation’ thereafter. With a personal disability policy you choose how being disabled is defined. For example, Regular occupation until age 65 means if you become disabled you will be paid disability under the definition of ‘regular occupation’ until age 65.
  4. Additional benefits: A group disability insurance policy does not have the added features of a personal disability insurance policy mentioned above: COLA, additional insurance, own occupation, etc.
  5. Cancelation: A personal disability insurance policy is noncancelable whereas your group benefits can be canceled.
  6. Taxable: A personal disability insurance benefit is not taxable whereas if your employer is paying the premium on your group plan the disability benefit is taxable.

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