Short-term disability may be offered by your employer, but what happens if you suffer a long-term disability? I’ve went ahead and looked over the best disability insurance in Canada so you can pick the best policy for you! Learn what disability insurance is, which companies offer long-term coverage, and which company may be best for your particular situation.

Most people don’t consider their options when looking at disability insurance because whatever their employer is offering seems good enough. However, what some need to consider is that employer disability coverage options may have severe shortcomings. Therefore, many need to select individual disability insurance plans from a reputable Canadian disability insurance provider.

This review provides Canadians with an informed checklist of what to look for when choosing their disability illness insurance provider, especially when considering long-term disability coverage.

What is disability insurance?

Disability Insurance is a product that offers you protection against loss of income by replacing a substantial portion of your pay-cheque if you become unable to work due to a health issue. The insurance company that offers you the coverage typically agrees to replace 50 to 100 percent of your regular income, regardless of whether the trigger is a sudden accident or a degenerative illness.

This ‘benefit’ payment is made to you until you return to good health (resume working) or until the end of your disability coverage period – whichever comes, earlier of course!

Why should I get extra disability insurance?

Most disability benefit packages offered by an employer is usually short-term disability coverage and it usually only covers 50-70% of the lost income so many times people find their group coverage falls short.

In most cases, the employer pays the majority of the premiums for these policies, so they decide the coverage options for you. You cannot choose coverage length, percentage of income covered, or most importantly the definition of disability.

In contrast, with an individual plan, you can shop decide the length of coverage, the waiting period, and the company that works best for your needs. You have the option to buy individual coverage to supplement your work benefits or decline your work’s plan and buy a separate private policy, just for you.

Also, if you’re self-employed, you already know the responsibilities and stresses that come with protecting your income. Adding disability insurance to your overall business protection plan is a great way to protect your family. Self-employed individuals may also qualify for Business Operating Expense (BOE) insurance. This covers any overhead expenses required until you can return to work.

The best disability insurance companies in Canada

Not all disability insurance companies are the same. Some are great on price and others offer an array of extra benefits. I have ranked the top insurance companies and reviewed their offerings to make sure you get the best disability coverage!

The best disability insurance companies in Canada:

Best for overall options: iA Financial Group

Best for self-employed individuals Bounc3

Best for top-up coverage: SunLife Canada

Best for simplified underwriting: LaCapitale Insurance

Best for long-term care conversion: Manulife Disability Insurance

Things to look out for when applying for disability insurance

Beyond the price, there are aspects of a disability insurance policy that you should consider when selecting your policy:

The policy’s definition of “disability”
Disability insurance providers classify disability in three categories: own, regular, and any.

The waiting period
Each policy will determine a waiting period before you can receive your benefits. The longer the waiting period, the cheaper the policy, because usually injuries and illnesses can resolve themselves during that period. However, you will have to cover all your expenses during that waiting period.

Amount of coverage
While most employer benefits come with short-term disability insurance that covers most of your income (usually 70-100% of your income), you may be shocked to find that the offered long-term coverage only covers 50-70%.

How to apply for disability insurance

The underwriting process, similar to when you apply for life insurance, evaluates whether you are insurable. Insurance companies will pay particular attention to whether you have any preexisting conditions that could later prevent you from working. There is also an extra step to verify your income level and work credentials since your coverage amount is generally established based on your current income. In some cases, companies may also benchmark coverage off the average income levels from previous years.