Disability insurance

Most people find out what their policy actually covers at the worst possible moment. Here is how to check before then.

Illustration of a person recovering at home while income keeps arriving

What happens to my income if I can't work?

For most households, it stops within weeks. Sick leave runs out, employment insurance sickness benefits cover a modest amount for up to 26 weeks, and savings drain faster than anyone expects when the mortgage, groceries and everything else keep billing on schedule. Disability insurance exists for the gap after those run out: it replaces a portion of your income, month after month, for as long as the policy says.

Your ability to earn is usually your largest asset. Over a career it is worth far more than the house, and it is the one asset most people leave uninsured. The planning question is simple arithmetic: if your paycheque stopped tomorrow, how many months does the household survive? Disability cover turns that answer from a number into a decision. How this fits the wider plan.

What is the difference between the three definitions?

The single most important line in any disability policy is its definition of disability. Two policies with identical premiums can behave completely differently at claim time, purely because of this one clause. This is the table to understand before you compare anything else.

Comparison of own occupation, regular occupation and any occupation disability definitions
Definition	Pays out if you cannot do your job but could do another	Typical cost	Who it suits
Own occupation	Yes. Pays while you cannot do your own job, even if you take different work.	Highest, because it protects your exact profession and pays the most often.	Specialists whose income depends on one skill: surgeons, dentists, lawyers, skilled trades.
Regular occupation	Yes, but only while you are not working elsewhere. Take a new job and benefits reduce or stop.	Middle. Cheaper than own occupation because the insurer can offset new earnings.	Professionals who could retrain, and people balancing strong cover against premium.
Any occupation	No. Pays only if you cannot do any job you are reasonably suited to by training or experience.	Lowest, and it is the definition most group plans quietly use after two years.	A backstop layer only. Rarely the right main protection for a high-earning professional.

The detail that catches people: many group plans start with own occupation cover, then quietly switch to any occupation after the first two years of a claim. That means a surgeon who can no longer operate but could teach, or answer phones, may see benefits stop exactly when the disability becomes long-term. Checking which definition your policy uses, and when it changes, is the first thing we do in an assessment.

Is my group plan through work enough?

Sometimes, and it is worth being fair about what group plans do well. They are subsidised by your employer, easy to qualify for with no medical questions, and genuinely useful cover while you hold the job. For a healthy person early in their career, a good group plan is a real foundation.

The limits are structural rather than sinister. Benefits are usually capped at a fixed monthly amount that high earners outgrow. The cover ends when the job ends, precisely when you may be less insurable. Employer-paid premiums make the benefit taxable, shrinking it further. And the definition often shifts to any occupation after two years, as the table above shows. A personal policy you own fixes all four: it follows you between jobs, pays tax-free, and keeps the definition you chose. Most professionals we work with keep the group plan and add a personal layer sized to the gap. See how this plays out for salaried professionals.

How long should I wait before benefits start?

The waiting period, sometimes called the elimination period, is how long you must be disabled before the policy starts paying. Common choices are 30, 60, 90 or 120 days. Longer waits cost less, because the insurer only pays on longer, more serious claims. Shorter waits cost more but protect you sooner.

The right answer is set by your savings, not by a rule of thumb. If your household can comfortably cover three months of expenses from cash, a 90-day wait buys meaningfully cheaper cover for the claims that would actually break you. If money is tight month to month, a shorter wait is worth the premium. We size it against your real emergency fund rather than guessing. Building that first buffer is often step one.

What if I can only work part time?

This is where partial and residual benefits matter, and where cheaper policies quietly fall short. Partial disability benefits pay when you can work reduced hours or duties and lose income because of it. Residual benefits go further: they pay in proportion to the income you have actually lost, so working at 60 percent of your old capacity still triggers a partial payment.

Most real recoveries are gradual. Someone returns two days a week, then three, then full time over a year. A policy without residual benefits can treat that return as recovered and stop paying entirely, punishing you for trying. We treat a residual benefit rider as close to essential on any personal policy, and we check whether your group plan has anything like it.

Should my corporation own the policy or should I?

Usually you should own it personally. When the corporation pays the premiums on a policy covering you, the benefit generally becomes taxable income when it pays out, and the premium is not always deductible the way owners assume. When you pay personally, the benefit arrives tax-free. At claim time, that difference is the size of a full paycheque.

There are cases where corporate ownership earns its place, most often with key person insurance, where the company itself is protecting against the loss of you, and occasionally inside a broader remuneration strategy. But for income replacement, personal ownership is the default for a reason. We model both against your actual numbers before recommending either. Corporate cover in the full business plan and the business owner picture.

Case study placeholder

What does the right definition change?

A detailed disability insurance case study will be added here when the approved figures and story are ready.

See all case studies

Policy details on this page are current as of September 2026. Insurer terms change, and we review this page whenever they do.

What else should you know about disability cover?

How much disability cover can I actually get?

Insurers typically offer between 60 and 85 percent of your current income, capped by your actual earnings. The benefit is designed to keep you close to whole, not to pay more than you earned, because tax-free benefits plus full income would remove any reason to recover. We work out the gap between your monthly costs and what you already have, then size the policy to close it.

Are disability benefits taxed as income?

It depends on who paid the premiums. If your employer pays for your group plan, the benefits are taxable income to you. If you pay the premiums yourself on a personal policy, the benefits arrive tax-free. That difference is one of the reasons we often recommend topping up group cover with a personal policy you own.

What if I have a pre-existing condition?

You can often still be covered, with the condition either excluded or priced into the premium. Some insurers will cover it fully after a clean period. Hiding it is never the answer, because a claim can be denied years later over an undisclosed condition. We put everything on the table at application so the policy is solid when you need it.

I work from home at a desk. Do I really need this?

Desk work is exactly what most claims interrupt. Cancer, multiple sclerosis, heart disease, back injuries and mental health conditions are the most common causes of long claims, and none of them care whether your job involves lifting. The question is never how physical your work is. It is how long your savings last if the paycheque stops.

How much does a personal policy cost?

It depends on your age, health, occupation class, benefit amount, waiting period and the definition of disability you choose. A healthy professional in their thirties often pays between one and three percent of income for strong own occupation cover. We quote several insurers side by side so you can see what each definition actually costs.

What happens in the complimentary assessment?

We spend 20 minutes looking at your income, your existing cover through work, and how long your savings would carry the household. You leave knowing whether you have a real gap, roughly what closing it would cost, and which definition fits your occupation. There is no obligation to continue.

Do you know which definition your policy uses?

Bring your group booklet or existing policy to a complimentary 20-minute assessment and we will read the fine print together.

Book a complimentary 20-minute assessment Call us directly: 604-618-7365