Disability & Critical Illness
The insurance most Canadians overlook — protecting your income.
🩺 Your ability to earn income is your most valuable asset.
A 30-year-old earning $60,000/year will earn over $2 million by retirement. Disability insurance protects that earning power if illness or injury prevents you from working.
Disability Insurance
Replaces a portion of your income (typically 60-70%) if you can't work due to illness or injury.
Short-Term vs. Long-Term
Short-Term Disability
Covers first 3-6 months. Often provided by employers. Bridges the gap before long-term kicks in.
Long-Term Disability ⭐
Kicks in after 90-180 days. Can pay until age 65. This is the critical one to have.
What to Look For
- ◆"Own occupation" definition: Pays if you can't do YOUR job (better than "any occupation")
- ◆Benefit period: Look for coverage to age 65
- ◆Waiting period: 90 days is standard (longer = cheaper premiums)
- ◆Non-cancellable: Insurer can't cancel or raise rates while you pay premiums
Critical Illness Insurance
Pays a lump sum if you're diagnosed with a covered condition (cancer, heart attack, stroke, etc.). Unlike disability insurance, you get one big payment to use however you want.
Common Covered Conditions
- ◆Cancer (most common claim)
- ◆Heart attack
- ◆Stroke
- ◆Multiple sclerosis
- ◆Kidney failure
Government Disability Benefits
- ◆CPP Disability: Max ~$1,606/month (2026). Hard to qualify — must be "severe and prolonged."
- ◆EI Sickness: Up to 26 weeks at 55% of income (max ~$668/week)
- ◆Provincial programs: Vary by province — usually for very low income
Government benefits alone are rarely enough to maintain your lifestyle. Private disability insurance fills the gap.
🍁 Canadian Pro Tip
Check if your employer provides long-term disability insurance. Many do — but the coverage may only be 60% of your base salary (not including bonuses). If you have a high income or are self-employed, consider supplemental private coverage.