Let’s
look at the plans currently available to you:
Workman’s
Compensation Board Wage - Loss and Health
Care Benefits
•
75% of gross weekly salary/wages
• non taxable benefits
• wage-loss benefits and health
care costs begin day after injury
Limitations:
•
work related sickness/injuries only
• can be a drawn out investigation
before benefits are received
Canada
Pension Plan Disability Benefits
•
flat rate portion and 75% of CPP retirement
pension to be received at age 65
• payable to age 65 then converts
to CPP benefit
Limitations:
•
disability defined as “severe and
prolonged permanent and/or long term physical
or mental disability”
• taxable benefits
Company
Group Benefit Plans
•
monthly benefit of specific amount per
month depending on annual income
• payable to age 65
• can receive 50% if your able to
work part-time with the assistance of
an approved rehabilitation program
Limitations:
•
waiting period usually up to 120 days
• benefits terminate if you become
employed elsewhere or refuse rehab
• as second payor will be reduced
by CPP benefits
• benefits are taxable
Notes
about disability insurance:
•
Some individual plans offer a choice of
injury only or injury and sickness insurance.
• Some individual plans also offer
a return of premium that means you may receive
premiums back if you have low or no claims.
• The elimination period is the period
between the 1st day of disability to the
1st day your benefits start. The longer
the elimination period the least costly
the monthly premium. If you are not in the
habit of keeping an emergency fund a 30/31
day elimination period is recommended.
• Most companies offer a waiver of
premium meaning that during a disability
you do not pay premiums (after 90 days of
application).
• There are also programs available
that offer term like rates where the premiums
are lower at the beginning but increase
as the policy owner gets older. With this
type of program you would want to convert
a policy like this to a permanent policy
within 5 years as it could become extremely
costly in the future.
