Five things to remember about disability insurance

Five things to remember about disability insurance


Disability insurance, or salary insurance, is one of the benefits least known to workers. However, it offers many advantages, in the first place the fact of guaranteeing your income in the event that the employee can no longer work for health reasons.

Salary insurance: what is it?

We can distinguish two types of insurance: group insurance and individual insurance. The first can be, for example, a common cover for all employees of the same company. The second, as the name suggests, is intended for a single beneficiary, as in the case of a self-employed person. The purpose of disability insurance is to preserve your ability to perform your obligations over a specific period (usually several weeks) or for years (until retirement).

Invalidity: in which cases?

Contrary to popular belief, disability insurance is not only valid in the event of injury: in the majority of cases this can relate to illness. So bureaucrats are just as concerned as people who work on a construction site. Certain mental disorders such as anxiety or depression can also cause the inability to work. Other illnesses such as diabetes or cancer can invalidate the employee for a period of time, even several years. So anyone can find themselves in these cases. In America, 30% of Canadians between the ages of 30 and 64 will be incapacitated during their career.

Disability not covered by the state

State plans only pay you benefits if you are absolutely disabled, which is strictly defined for each case. If the incapacity is temporary or partial, you can therefore only rely on your resources.

Common salary insurance scheme

Your employer can enroll you in a joint coverage program for salary insurance. If this is the case, you have to pay attention to each term of the contract. Indeed, the benefits may not be sufficient. Many plans cover maximum benefits. But after a while, you will have to support yourself. The majority of collective contracts refer to a certain ratio of the salary. The allowance may also be taxable. If you feel that the service is not sufficient, you have two options:

    Complementary insurance subscription included in the program provided by your company
    Purchase of additional coverage on a personal basis.

How much does salary insurance cost?

Of course, you will have to pay a certain amount regularly for disability insurance. However, it is a good investment as it can pay off big and give you peace of mind if you ever get sick and can no longer work.

What is an emergency fund?

If you are a farsighted employee - especially if you work independently - you will think about setting aside a certain budget to plan for any future disability situation. Be aware, however, that there is something called "emergency fund", which is savings that you will use in case of the unexpected. The sum can reach up to three months of pay. Although these are significant savings, they will not be enough for you if you are unable to work for a long period of time. The best is to take out personal salary insurance, which will give you appreciable and fixed benefits and which are generally not taxable.

Talk to your insurer

Still not convinced that you need salary insurance or not sure what conditions to include? Make an appointment with your advisor to talk about it.