DISABILITY INSURANCE QUOTE AND EXPERT TIPS

Sample Disability Insurance Quotes

What is Disability Insurance?

Disability insurance is a type of insurance that substitutes part of your income should you become disabled. Unlike other forms of insurance, disability benefits do not come as a lump sum, but as monthly payouts.

Disability cases are clearly defined in an insurance policy and have a number of special conditions defining waiting times (elimination period), the types of work in which you can be engaged after disability, and much more.

When do you Need Disability Insurance?

Disability is one of the insurance coverages that you always need if you have a stream of income, and especially if people, such as your family members, rely on this income.

Here are a few things to know

1. One in three Canadians becomes disabled for three months or longer before the age of 65.
2. Nearly 15% of Canadians have a disability.
3. Many employees already provide some disability coverage as a part of a benefit package, but you could lose this protection if you change your job.
4. You cannot combine the coverage of multiple policies above a particular percentage, and that percentage is linked to your income. Disability policies are not stackable.

How does Disability Insurance Compare to Critical Illness Insurance?

Here is a brief comparison to show how disability insurance compares to critical illness insurance.

Disability Insurance Cost

Disability insurance rates are determined through numerous aspects, such as:

• Elimination period (time frame when you do not receive benefits.
• Benefit period (time frame during which you receive benefits. For example, 2 years, 5 years, up to age of 65).
• Type of occupation, such as “own” vs “any” occupation – basically, your ability to qualify for benefits if you are forced to work in a different career path after your disability.

Disability insurance costs are higher than term life insurance costs.

Here are some examples for disability insurance cost. These disability insurance rates have been generated in September 2021.

Please note that these rates consider 90-day elimination period, benefit period to age 65, and job category 3A (most “white collar” workers: office, clerical, or light sales work with no manual duties), which is one of the most popular job categories.

Source: Disability Insurance data from 2024.

What is Disability Insurance Elimination Period?

The Disability Insurance Elimination Period is the waiting period between when an
individual becomes disabled and when they can start receiving disability benefits.
Common elimination periods are 30, 60, or 90 days. During this time, the policyholder is
responsible for covering their expenses independently, using personal savings,
employer benefits like sick leave, or other income sources, until the insurance benefits
kick in. The length of the elimination period typically impacts the cost of
premiums—longer waiting periods result in lower premiums.

How Much Disability Insurance Do I need?

The amount of disability insurance you need depends on your income, expenses, and
financial planning. It’s important to understand that part or all of your income may not be
available during a disability, and your disability insurance payments should be sufficient
to replace this income. Keep in mind that no policy covers 100% of your existing
income—typically, benefits are capped at 60-80% of your pre-accident income. In some

cases, policies may cover up to 75%. This cap ensures you still have the motivation to
recover. Additionally, you cannot combine two policies that each cover 75% of your
income to receive 150% in benefits.

Is Disability Insurance Required by Law?

Disability insurance is not required by law in Canada, but it is highly recommended for
individuals to protect their income in the event of illness or injury. While Employment
Insurance (EI) Sickness Benefits provide temporary support, disability insurance works
in conjunction with these benefits, as well as group disability coverage offered by
employers, to offer more comprehensive financial protection.
In addition to voluntary coverage, there are specific situations where disability insurance
is mandatory.
For instance, Workers’ Compensation Insurance, provided through organizations like
the Workplace Safety and Insurance Board (WSIB) in Ontario, is required by law for
many types of jobs in Canada. However, the responsibility for securing this coverage
falls on the employer, not the employee.
Furthermore, in certain high-risk activities, such as martial arts competitions,
participants may be required to provide proof of disability or accident insurance
coverage before being allowed to compete. This ensures that individuals are financially
protected in case of an injury, and it is a condition for participation in these events.

Long-Term Disability Insurance explained

There are two types of disability insurance: short-term and long-term.
Short-term disability typically lasts for about six months, and if necessary, long-term
disability coverage can begin once short-term benefits run out.
Long-term disability insurance is available to individuals through group benefits (such
as those provided by employers or associations) or through Workers’ Compensation
Board (WSIB) coverage. In some cases, long-term disability coverage can last for
years, or even until retirement.
Long-term disability kicks in once short-term coverage ends, usually after about six
months. It can be provided through an individual policy, a group policy, or through
Workers’ Compensation Board coverage like WSIB.

The duration of long-term disability benefits typically falls into three categories: until you
can return to work, until you reach a certain age (often 65), or until a specified maximum
year limit (e.g., five years). These limits vary by insurer and policy.