Start with what you already have
"I’m covered through work.” Let’s check.
Group long-term disability is a real benefit and worth having. It’s often narrower than people expect.
Here’s a typical plan applied to someone earning $140,000 a year, $30,000 of it in bonus. Send us your booklet and we’ll run the same numbers on yours.
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43%
43%
of total pay, before tax, in this example. The plan covers base salary only, up to a monthly maximum. Because the employer pays the premium, the benefit is taxable, and any CPP disability benefit is subtracted from it.
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Illustrative example only. Plan terms vary; your booklet is what counts.
For individuals
Six things in your group plan worth knowing
Waiting period
Long-term disability often starts only after about four months off work. Short-term disability, sick days or savings have to cover that gap.
Definition of disability
Look for “own occupation” (you can’t do your job) versus “any occupation” (you can’t do any job you’re reasonably suited for). Many plans switch from one to the other after two years.
The maximum benefit
Most plans cap the monthly benefit. If you earn more, the income above that cap isn’t protected.
Bonus, commission and overtime
Benefits are often based on base salary only. If a large part of your pay is bonus or commission, that part may not be covered.
CPP offset
If you qualify for CPP disability, the group plan usually reduces its payment by that amount. You don’t receive both in full.
It usually ends when you leave
Group coverage typically stops when your job does, which is exactly when new coverage may be harder to get.
Personal coverage
What a private policy can add
If your group plan leaves a gap, personal disability insurance can help fill it, and it stays with you if you change jobs.
It’s yours
It follows you from job to job, or if you become self-employed. It’s not tied to your employer.
You control it
You select the benefit amount, waiting period and definition of disability, subject to the insurer’s approval.
It can include more of your income
Bonus, commission and self-employment income can usually be counted, within the insurer’s limits.
It works alongside group coverage
If you have both, insurers coordinate them so your total benefits stay within a set share of your income.
DISABILITY INSURANCE FAQ
Questions I get asked most
Often, yes. Many group plans require you to apply, and they may reduce your benefit by an estimated CPP amount whether or not you’ve been approved. Check your plan booklet, and apply early if you expect to be off long-term.
Insurers usually limit coverage to about 60–70% of your income. That can be enough, because benefits from a personally paid policy are tax-free and some work costs disappear while you’re off.
Often, yes, but it may cost more or exclude that condition. It’s easier to get full coverage while you’re healthy, which is a good reason not to wait.