Disability Insurance in Ontario: Protecting Your Paycheque

If an illness or injury keeps you from working, disability insurance pays you a monthly benefit to replace part of your income. Depending on the policy, it can cover everything from a back injury to recovering from surgery or cancer treatment.

This isn't about worst-case scenarios. It's about the much more common situation of being off work for months while the bills keep coming.

• How much it pays: usually a percentage of your income, set when you apply.
• When it starts: the waiting period, often 30, 90 or 120 days after you stop working. A longer wait usually means a lower premium.
• How long it pays: for a set number of years, or up to age 65.
• How "disabled" is defined: some policies pay if you can't do your own job; others only if you can't do any job you're reasonably suited for. That one detail can make a huge difference when you need to claim.

Long-term disability through your employer is valuable, but it has limits. It may replace only part of your income, the benefits are taxable if your employer pays the premiums, and it usually ends if you leave the job.

Employment Insurance sickness benefits help, but they're time-limited and capped. If you're self-employed, you may have no coverage at all unless you've opted in to EI special benefits.

If you work for yourself, there's no employer plan to fall back on. Individual disability coverage can keep your household running while you recover. For business owners, business overhead expense coverage can help keep the doors open too.