Best Long Term Disability Insurance Canada

DEFINITION:Long-term disability insurance is a type of insurance that provides financial protection to individuals who are unable to work for an extended period due to an illness or injury. This insurance typically pays a portion of the insured person’s income for an extended period, helping them cover essential expenses and maintain their standard of living.


1. What does long-term disability insurance cover?
Long-term disability insurance provides coverage for individuals who are unable to work due to a qualifying illness or injury. It typically covers a percentage of the insured person’s pre-disability income, ranging from 50% to 85%, depending on the policy. The coverage may include both physical and mental health conditions that hinder the person’s ability to perform the duties of their occupation or any other suitable occupation.

2. How long does long-term disability insurance coverage last?
The duration of long-term disability coverage varies depending on the policy. Typically, the benefits can last anywhere from several years to until the insured person reaches the age of retirement, which is usually 65. However, some policies may have a maximum benefit period, such as 5 or 10 years. It’s essential to review the terms of the policy to understand the specific coverage duration.

3. Is long-term disability insurance necessary if I already have other insurance coverage?
While other insurance coverage, such as workers’ compensation or government benefits, may provide some level of disability coverage, it’s important to note that these coverages may have limitations and may not adequately replace your income. Long-term disability insurance can provide additional financial protection and peace of mind, ensuring you have sufficient income replacement if a disability prevents you from working for a long time.

4. Can anyone purchase long-term disability insurance?
Yes, long-term disability insurance is available for individuals who meet the eligibility criteria set by insurers. These criteria may include age, occupation, health status, and income level. It’s recommended to consult with an insurance provider or broker to determine the specific requirements for obtaining coverage.

5. Are long-term disability insurance benefits taxable?
The taxability of long-term disability insurance benefits depends on how the premiums are paid. If the insured person pays the premiums themselves using after-tax dollars, the benefits are generally not taxable. However, if the premiums are paid by an employer and considered a taxable benefit, the benefits received may be taxable. It’s advised to consult with a tax professional to understand the tax implications based on your circumstances.

6. When should I consider purchasing long-term disability insurance?
It’s advisable to consider purchasing long-term disability insurance when you have a stable income and dependents who rely on that income. This insurance coverage acts as a safety net if you were to become unable to work for an extended period due to an illness or injury. The younger and healthier you are when purchasing the coverage, the more affordable it tends to be.

7. Can I change or cancel my long-term disability insurance policy?
Yes, long-term disability insurance policies can be changed or canceled. However, it’s important to review the terms and conditions outlined in your policy. You may have the option to make adjustments, such as increasing or decreasing the coverage amount, modifying the waiting period, or adding additional riders for specific needs. If you wish to cancel the policy, it’s recommended to contact your insurance provider to understand the process and any potential financial implications.