Who Needs Disability Insurance?

If you make an income, you need disability insurance.

Why is disability insurance in Canada so important?
Disability insurance protects your ability to earn income if something happens, such as an accident, injury, or illness that prevents you from working. Being unable to work for a short or long period of time can be guarded against if you have individual disability coverage.

Are disability insurance rates affordable?
The cost of disability insurance premiums can be very affordable, but it all depends on whether or not you are considered higher-risk and where you get your coverage from. It is always best to get a few disability insurance quotes before you settle on one. The most efficient way to achieve this would be through an insurance broker, who has the ability to review multiple insurance carriers all at once.

One important consideration is that some people cannot qualify for disability insurance. Certain providers may cover you, but only under the agreement that pre-existing conditions will not be covered, and others won’t offer you coverage if you have certain pre-existing condition(s). In some cases, your occupation may preclude you from coverage. Those who have inherently dangerous jobs, for example, likely will not qualify for individual disability coverage.

What are my disability insurance options?
Typically, if you have group benefits through your employer you will have some sort of disability coverage within that policy. It would be prudent to review your policy to determine what exactly that coverage entails, and to make yourself aware of any limitations it may have. Ideally you want to have 50%-85% disability insurance coverage, which means 50-85% of your lost income due to disability will be replaced. If your group policy offers coverage less than 85% (the maximum allowed across all the policies you hold) then you can seek individual disability insurance to top that up.

Now, to touchback on our previous remark about uninsurable occupations. Very dangerous jobs, such as policing, firefighting, and military service make it very unlikely for you to secure disability insurance individually, but these jobs tend to provide excellent disability coverage within their employer-provided group benefits.

If you do not have group benefits through your employer, then you must shop independently for coverage. This can be done by contacting individual insurance providers, or by getting disability insurance quotes through a broker. Besides insurance institutions, major banks also offer insurance products, but be sure to read the fine print as what financial institutions offer can work a bit different than a traditional insurance provider.

I’m Young, is This Really Necessary?
Accidents happen. Did you know that 1 in 7 Ontarians identify as having some sort of disability? The chances of your suffering from a disability increase 50% after the age of 35, and the average length of a disability is 2.9 years. Additionally, 1 in 3 Ontarians will suffer from a disability that lasts longer than 90 days before the age of 65.

Remember, disability can be a short-term state of being (work injury, heart attack, mental health crisis) or a life-long one (diabetes, mental health disorder, loss of limb). Ensure your financial stability and your family’s finances are protected with a good disability insurance policy. You are never too young to be prepared for whatever life may throw at you, and insurance is a big part of that.