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How Disability Insurance Works in Canada

kokou adzo



How Disability Insurance Works in Canada

Life’s expenses don’t stop if we get injured. If an injury or illness prevents you from working, disability insurance can help pay the bills.

Most Canadians are familiar with workers’comp coverage, which covers work-related injuries. But by comparison, disability insurance can protect against a broader range of risks-both at work and away from work.

With the right disability policy, you’re always covered.

What is Disability insurance?

Like life insurance, disability insurance offers a way to provide for loved ones if the unexpected happens.

If an injury or illness prevents you from working, your policy can replace part of your income while you get back on your feet (typically 60 to 85% of your income).

Long-term disability policies can cover lengthier periods or even permanent disabilities.

How does disability insurance work?

Sudden disability is more common than many realize. According to Statistics Canada, about 20% of Canadians age 15 and up have had a disability that limited their activity. Disability insurance can protect a large part of your earnings if you suffer an injury or illness that causes you to lose work income.

Some employers offer disability coverage as a group policy, but you can also buy a standalone policy you control. Many Canadian families pair a disability policy with a life insurance policy to build a complete financial strategy. A typical disability policy can replace most of your lost income.

Your policy’s benefit length depends on the coverage choices you decide. For example, your policy might protect you for a fixed number of months or years. Some policies can also provide coverage up to a specific age.

Like other insurance types, you pay a premium for your disability insurance based on risk and the coverage options you select.

What does disability insurance cover?

Many times, injuries happen away from work, which means workers’ comp can’t provide coverage. Disability insurance can protect against injuries that occur anywhere as well as cover lost income due to illness.

But perhaps surprisingly, most disability insurance claims stem from illnesses rather than injuries.

For example, here are some of the leading reasons for disability claims:

  • Heart disease
  • Cancer
  • Diabetes
  • Stroke
  • Depression
  • Back pain
  • Arthritis or joint injuries

Your policy can protect against income losses due to other injuries as well. Broken bones or similar mishaps can take months to heal. Your policy can help you cover household expenses while you’re on the mend.

Disability insurance doesn’t focus on specific types of injuries or ailments, though. Instead, your policy provides coverage based on whether you’ve lost your ability to work.

Who needs disability insurance?

Most Canadian households would feel the sting if they suddenly lost an income.

The mortgage or rent still needs to be paid. And if you have kids, you already know about ongoing expenses.

Disability insurance also protects families in more ways than workers’ compensation coverage. Your policy can even provide lost income for your family if you’re self-employed and become disabled. It’s also important for small business owners.

If your family needs your income to survive comfortably, disability insurance can be a wise choice.

What are the different types of disability insurance?

Disability insurance policies come in 2 types: long-term disability insurance or short-term policies.

  • Long-term disability insurance : A long-term disability policy provides income for an extended period. For example, you might need replacement income for up to 10 years. You can also choose a policy term that protects you until age 65 as part of your retirement plan. Long-term policies put provide more benefit-length options.
  • Short-term disability insurance : Short-term disability insurance: Short-term policies offer temporary coverage. Often, you’ll find short-term policies as part of an employer’s group insurance plan. Expect shorter benefit periods, usually just 3 to 6 months.

How do I get disability insurance?

Your employer may already offer a short-term policy option. However, a long-term policy provides better protection. Your long-term insurance is portable as well, so you’ll have coverage even if you change jobs.

You can purchase disability insurance directly from some insurers. But many families choose to buy through an independent insurance agency. An independent agency can help you compare options from several insurers so you can choose the coverage that’s best for you.

With a policy you own, your policy protects you as long as you pay premiums-no matter where life’s journey takes you.

If you live in Canada, reach out to the insurance experts at Dundas Life. The independent agents at Dundas Life make your insurance options easy to understand.

Compare disability insurance rates and policy features to find the best coverage for your needs.

Choose the right protection for your loved ones

A life insurance policy provides replacement income for loved ones if we die early. A disability insurance policy provides income if an injury or illness causes you to lose your ability to work. By choosing the right coverage combination, you can be sure your insurance protects your family for as long as they need a helping hand.

You may already have a short-term policy through an employer.  But the extra protection of long-term disability coverage can make all the difference if you suffer an injury or develop an illness.

Learn the best ways to protect your loved ones. Reach out to the experienced agents at Dundas Life.


Kokou Adzo is the editor and author of He is passionate about business and tech, and brings you the latest Startup news and information. He graduated from university of Siena (Italy) and Rennes (France) in Communications and Political Science with a Master's Degree. He manages the editorial operations at

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