DISABILITY

If there is a prior history of mental health, there is a good chance it will not be covered in an individual insurance policy.  However, many comprehensive disability plans will cover mental health if the condition arose after the policy was already in place.

Yes. However, if you have a pre-existing condition that occurred recently, that specific condition may not be covered in the contract.

Medicals are usually dependant on the benefit amount. Often Disability Insurance coverage does not require a medical.

Personal Disability Insurance coverage is usually paid with after-tax dollars and is therefore paid out tax-free.  If a company pays for your Disability Insurance coverage with before-tax dollars, the benefit will then be taxed.

Every situation is different but the maximum amount of coverage that an insurer will typically cover is 2/3 of the applicant’s income.

Like all insurance coverage, Disability Insurance premiums are based on age and health. Other factors that affect premiums are:

• Waiting period (the length of time between an injury and payout)
• Payout amount
• Occupation (eg. an accountant working in an office job would be considered a lower risk than a labourer on a construction site).

At the time of application, the applicant can choose a “waiting period.” Common waiting periods are 0, 30, 60, and 90 days. The shorter the waiting period, the higher the premiums will be. This is because of the higher likelihood of a claim against the policy.

At the time of application, you often have the choice of being covered for injury and illness leading to disability. The most common definition for a disabled person is if they are “unable to perform the regular duties of their occupation.” If the insured can satisfy that definition, typically they will receive their benefit.

Typically No. Most individual Disability Insurance policies lock in the premium at the time the policy is issued, for the entire life of the policy. Certain types of disability coverages (often referred to as “pooled” plans) may increase over time if there are a large number of claims made by policyholders.

Most people in Canada have some form of disability coverage through their group plan at work. However, if your company group plan doesn’t offer Disability Insurance, or if you’re self-employed, then you should definitely consider coverage. It’s important to remember that your ability to earn an income is often your most valuable asset.