Disability Insurance
Protection for your paycheque
what is Disability Insurance
Insurance that replaces a portion of your monthly income if injury or illness prevents you from working.
key Highlights
Monthly benefit to replace partial lost income
Coverage up to
$10,000 per month
Tax-free
monthly benefit
(subject to conditions)
Option for
Partial Return of Premium (ROP) Rider
Renewable until age 65
Waiting period from 0 to 2 years
why Disability Insurance is Important
Having disability insurance provides financial security for you and your loved ones who may depend on your ability to earn a paycheque.
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Insurance company plans typically cover 60 to 85 percent of your regular income up to a specified time if you temporarily cannot work or are permanently disabled due to an injury or illness. "Permanent" refers to the nature of the disability. It does not mean that you will get benefits for the rest of your life.
The benefit payments end earlier of you returning to good health or until the expiry of the disability coverage period.
is the disability benefit Taxable
It all depends. If you paid the entire amount of disability premium yourself and did not claim any portion of the premiums from your business expenses then your disability benefits will be tax-free. Typically the benefit payment that you receive are pretty close to your pre-disability take-home pay.
If your employer paid all or part of the disability premiums then your disability benefit will be subject to income taxes.
Did you know?
According to MoneySense, nearly 1 in 6 Canadians before they turn 50 will experience a disability that disrupts their income for three months or longer. Disability insurance is important for those who rely on their regular income to make a living.