Significance of Disability Insurance

Disability insurance can help protect you and your family’s income if an unexpected illness or accident leaves you unable to earn a living. People usually give more importance to death benefits than living benefits. “Living benefits” is the term used in the insurance industry for benefits which are paid out when you are alive through disability insurance or critical illness insurance. They cover a living person’s lost income due to an unexpected illness or disability. In this blog, we will discuss the key benefits of buying disability insurance. What Is Disability Insurance? Disability insurance, also referred to as one of the income protection insurance, provides protection against loss of income due to an accident or sickness. This insurance replaces 60% to 85% of your regular income for a specific time duration. When premiums are paid after tax income, benefits are non-taxable too. Why Buy Disability Insurance? What would happen if you got hurt while commuting to work and could’t go to work for a few months? What about an illness which will take a year or two to recover? If you are the primary earning member of your household, it can result in financial hardship. According to the RBC insurance survey, 50% of the Canadians have disability insurance, and the figure keeps growing. This points towards the increasing awareness and need of purchasing disability insurance to protect yourself and your dependents from any financial trouble. You must Buy Disability Insurance if:

  • You are dependent on your regular income to pay for your lifestyle, rent or mortgage costs.
  • You want to ensure daily living expenses of your family are covered in case of an accident or sickness.
  • You have limited access to savings and investments that won’t suffice during any unexpected event.
  • You have other financial obligations.

  Types Of Disability Insurance: Short-Term Disability Insurance – This type of coverage provides disability benefits if you are injured or sick for up to 24 weeks and can be extended upto 52 weeks in some cases. The plan usually takes care of temporary health issues that occur because of an accident or illness. The benefit payments start within 14 days once you submit the claim through your disability plan. An employer usually offers short-term disability plans to his employees. Generally, these plans cover 50% to 70% of your monthly income. However, some employers do not offer short-term coverage. In that case, employees rely on Employment Insurance (EI) sickness benefits or personal disability insurance. Long-Term Disability Insurance – As the name suggests, this disability insurance plan is for long-term which replaces 60% to 70% of your regular monthly income. This coverage starts right after the short-term disability insurance, sick leave benefits from your employer, or EI benefits. Long-term disability insurance provides coverage anywhere from 2 years, 5 years or up to 65 years of age. How To Buy Disability Insurance? You can buy disability insurance with the help of a financial security advisor. Directing your queries and concerns to a professional helps them in finding the best coverage plan at a minimum premium. Ask us if you have any questions about Disability Insurance. We at can offer various options for disability insurance. Please contact us for your no-obligation discussion at If you need any support, you can book a free consultation with me. 

— Aman Ahuja 
Financial Security Advisor 
[email protected] 
Life | Critical | Super visa

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