Life Insurance versus Disability Insurance in Canada

disability insurance

Life insurance and disability insurance cover two distinctly different needs. Life insurance protects the insured family in the event of death, whereas disability insurance protects the insured in the event he or she is no longer able to work due to an injury or illness.

The need for disability insurance is often underestimated and, in many ways, exceeds the need for life insurance. The risk of becoming disabled prior to age 65 is considerably higher than the risk of dying. An average 30-year-old has four times greater a chance of becoming disabled than dying prior to 65. An average 40-year-old has a 2 and half times greater chance of becoming disabled than dying prior to age 65, and a 55-year-old has a 1 and half times greater chance of becoming disabled than dying prior to age 65.

Some additional differences between the two plans are as follows:

  • Life insurance is available on a temporary basis, or for the insured’s lifetime. Most disability plans stop at age 65.

  • Disability insurance is also generally more stringent with underlying requirements,especially financial underwriting.

  • Disability policies are often issued with exclusions for pre-existing conditions. Life insurance generally does not exclude pre-existing conditions, but may charge an additional fee, or decline coverage based on lifestyle and health issues.

For more details on life insurance in Canada, please visit our Instant Quote
. For disability details, you can get a quote online at our Disability Insurance Quote Page. We are also happy to answer any questions by phone at 1-866-899-4849.

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  • Chris
    March 10, 2014 at 3:14 pm

    I found your statistics on becoming disabled versus dying prior to 65 very compelling. Would you be able to provide a reference or source to where you found this data.
    Thank you in advance

    • LSM Insurance
      March 10, 2014 at 4:10 pm

      Thanks for the note. We got these statistics from one of the insurance companies marketing pieces. I will try and locate the actual carrier and email you. I’m glad you liked the article.

  • LSM Insurance
    May 10, 2010 at 11:16 am

    Hi Lawrence. Thanks for the note. The Edge has a disability plan which will stay in force to age 70. We will send you a separate email now.

    Regards … Lorne

  • lawrence panasci
    May 9, 2010 at 4:23 pm

    I am currently 63 y.o. and in good health. I have young children(13,15 and 18 y,o.) I would like to get a disability insurance until 70 if this is possible. Do you kow of any compans that have such a policy?