Replacing future income requires significant savings. Since disability can strike at any time, you can’t predict how much or how long you have to save. Any savings you do have could be wiped out quickly by a disability.

If your registered retirement funds are accessible, they’d be subject to withholding tax¹ and fully taxable as income in the year withdrawn. Could you re-coup your retirement savings once they’ve been withdrawn?

Financial needs, lifestyles, goals and plans are almost always established on the current total household income. Changes to the foundation can have a devastating effect on the family’s financial framework.

Most people’s assets are integral to their financial framework or at least impactful to their lifestyles, and selling yours may be less then desirable, especially during a disability. And, without control over timing, market prices, and demand, the success of this strategy is uncertain at best.

Qualifying for lending from a financial institution is next to impossible when earning power is hindered by a disability. And borrowing from loved ones can be very hard on relationships when the ability to repay is unpredictable.

The kindness of strangers doesn’t go as far as you’d think. According to fundera.com, in 2021, the average crowd funding campaign raised a total of $824.

As of 2022 — E.I. sickness benefits² are only paid for up to 15 weeks, calculated as 55% of your average weekly insurable earnings, up to a maximum of $638 per week – for a total maximum benefit of $9,570 over 15 weeks.

If your employer participates in WSIB, you’re only covered if you’re injured on the job or have a sickness that’s directly related to your job.

(In addition, Toronto Star reports that 90% of chronic mental stress claims are denied by WSIB³)

To qualify, you must be under 65, meet the minimum contribution requirements, have severe and prolonged disability, and be unable to work at ANY occupation.

In 2022, the CPP disability benefit⁴, which is subject to contribution levels, is a minimum monthly benefit of $524.64/month and a maximum monthly benefit of $1,457.45/month ($17,489.40/year).

Not for residents of Quebec

To qualify, you must be under 65, meet the minimum contribution requirements, have severe and prolonged disability, and be unable to work at ANY occupation.

In 2022, the QPP disability benefit⁵, which is subject to contribution levels was a minimum monthly benefit of $524.61/month and the maximum monthly benefit of $1,463.83/month ($17,565.96/year).

Only for residents of Quebec

Group disability insurance through an employer can be a good first layer of protection, however, it typically has a strict definition of disability to qualify for long term benefits. Additionally, the premium can go up as frequently as annually, and you can’t take the coverage with you if you leave your employer. Disability insurance is typically limited to cover between 60% and 70% of your income

Whether or not you have group disability insurance through your employer, individual insurance can build a firm foundation for your financial framework.

If you already have group disability insurance – personal disability insurance can be used as an added layer of protection in case a disability doesn’t qualify for benefits under your group plan, or as a top up so that you can receive a higher monthly benefit in the event of disability, closer to your current take-home pay.

If you don’t have any group disability insurance – consider a flexible personal disability insurance plan that can pay full or partial benefits and cover a wider range of circumstances than group disability insurance, one that also offers optional features like shorter wait times, longer benefit periods, return of premiums and annually increasing monthly benefits. Once it’s purchased, your premiums are guaranteed, and you can keep your plan even if you change employers.