Canadian Disability Insurance
Sudden illness and serious accidents can result in the loss of income, which is critical to most people and their families.
Disability insurance provides protection against this by paying a monthly benefit when unable to work (as opposed to critical illness benefits, which pays out a lump sum of cash even if you are able to go back to work).
Both long term and short term disability benefits are available.
General Disability Insurance Features
- Replacement income if you become ill or are injured.
- Depending on your occupation, the more dangerous your job the higher the premiums and limitations.
- The amount of coverage usually can't be more than 2/3 of your current earnings.
- The paid benefits from an insurance claim are tax free.
- Benefit period can vary, anywhere from 2 years, up until the age of 65.
- After 65 coverage may continue, although the insured must continue to work. Coverage may be modified.
Short Term vs. Long Term Disability Insurance
Short term DI (otherwise known as weekly indemnity) provides income for the early part of a disability. A common length of time for short-term DI is two weeks up until 150 days.
Long term DI replaces lost income for an extended period, and goes into effect after the short term DI has ended. It often ends after five years, or when the covered person turns 65, depending on the policy.