Disability insurance

What it means

Disability insurance replaces part of your income — commonly 60-70% — if you're unable to work due to illness or injury. Coverage can come through an employer group plan, an individual policy, or both, and definitions of "disabled" and payout terms vary significantly between policies.

Why it matters

For most working-age Canadians, the odds of a disability lasting 90 days or longer are higher than most people assume — and unlike a death, a disability still comes with ongoing living expenses to cover.

Common misunderstandings

• •Employer group coverage often has a lower income-replacement cap and stops the moment employment ends — it isn't automatically enough or portable on its own.
• •"Own occupation" and "any occupation" definitions of disability pay out very differently — the fine print matters more than the premium.
• •It's frequently under-prioritized compared to life insurance, even though a disability is statistically more likely to happen during working years.

Where you'll see it

In employer benefits packages, and in any thorough review of income protection.