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.
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.
Click each question below to display the answer.
Nearly 50% of disability claims are musculoskeletal or psychological related.
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.
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:
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.
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.
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.
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.