How Much Disability Insurance Should I Get?

As a Canadian, you never know when something is going to go wrong. You may experience a fall that leads to a disability. Furthermore, you may get sick. Both incidents will result in you being required to stay home from work. During this time, you will lose pay. To solve this problem, you need disability insurance. So, how much do you need? You need enough to make sure that you can survive while you’re away from work. This means that you should get enough to cover your wages, bills, and loan payments.


More About Disability Insurance

Disability insurance can be very beneficial because it will protect you from the financial burden of losing your income when you’re no longer able to work due to an injury or illness. Disability insurance is a form of income replacement. While you won’t receive a paycheck due to a disability, you can still receive a monthly payment. You’ll get a disability benefit from your insurance company. The amount of benefits that you’re going to receive is known as coverage. When signing up for insurance, you need to get sufficient coverage or you may not have enough money to cover your expenses.

So, how much coverage do you need? Your disability benefit will be based on your wages. It may be as high as 60 or 70% of your paycheck. If you want this level of coverage, you’ll have to pay roughly 1 to 3% of your annual salary in premiums. The premiums will depend on how much coverage you want. Furthermore, you have to consider how long you’re going to be away from work. This is referred to as the benefit period. If you want to save money on premiums, you can choose a policy with a longer elimination period. This means that you’ll have to wait longer before you can begin receiving benefits.

If you live a riskier life or have a dangerous job, you should obtain more coverage. After all, there is a great risk that you’re going to get injured. Nevertheless, every Canadian should have disability insurance. An unexpected illness could cripple your finances. Remember that roughly 90% of all disabilities originate from illness instead of injuries. Medical bankruptcy is very common too. The amount of coverage you need should be enough to help you pay all of your bills. You should have enough money for rent, food, bills, and loans.

Furthermore, you should have enough funds to survive while you’re disabled.


Coverage For Living Expenses

When trying to obtain disability insurance, you need to make sure that you get enough. With that being said, you should carefully analyze your daily expenses. You have to consider how much money you’re going to be spending every day. You have a lot of expenses to cover. This includes paying your mortgage and rent. You’ll also have to pay medical bills and loans. If you don’t pay these things, you may lose your property and destroy your credit score. Furthermore, the interest is going to accumulate and you may not be able to pay it back.

When acquiring disability insurance, you need to make sure that the benefits are high enough to cover all of your business until you recover. You should find out how much you pay every month. Then, you have to choose coverage that will be able to pay for all of your bills. Your disability coverage should be higher than the amount you’re paying for bills.

If you have an advanced career, you need disability coverage. You likely have an expensive student loan to pay back. You’ll also want disability insurance so you can pay for the home you bought and avoid defaulting on that home.


Replace Your Income

You never know when you’re going to get sick or injured. You just never know. Furthermore, you never know how long a disability is going to keep you away from work. While you’re away from work, you still need to provide for your loved ones. How are you going to put food on the table? To calm your concerns, you should think about acquiring disability insurance. And, you need enough coverage to pay for these expenses. Some people live a lavish lifestyle so they’ll need more money. If you fit into this category, you’ll want more coverage. Depending on your lifestyle, $5,000 to $10,000 a month might be enough.

The only downside is that you’ll have to pay a higher premium. Nevertheless, it’ll help ensure that you have enough money to support your lifestyle. Furthermore, disability insurance can be helpful for people living near the poverty line. By taking out less coverage, you can minimize the premium. You don’t need as much money to cover your daily expenses so you can pay less. Still, you’ll need money for the necessities in life.

Your disability will likely lead to expensive medical bills. With disability insurance, you’ll have assistance paying these bills. You’ll likely experience increased expenses when you start receiving disability benefits. Unfortunately, premiums are expensive so it might not be reasonable for everyone. Nevertheless, everyone should obtain some degree of disability insurance.

Whether you’re a doctor who has to pay off student loans or you’re running a business, you need coverage.


Adding To Savings

At the end of the day, you’ll want to continue saving money. This is far more important than you could ever imagine. You never know when something is going to go wrong. When it does, you’ll want to make sure that you can cover your expenses. Otherwise, you’ll have to rush to collect money and get assistance from your loved ones. This won’t be a problem if you’ve been saving money. Disability insurance is great for helping you continue saving money. The insurance will provide you with more money so you can continue living a good life. Furthermore, you’ll likely be able to continue saving money each month.

With disability insurance, the benefits are considered unearned income. The benefits are usually not taxed unless the premiums were paid with pre-tax money. If you want to fund a tax-qualified account using your disability benefits, you may be required to pay taxes on that money. If you’re going to save money from your disability insurance benefits, you’ll want to do so carefully. It is best to save this money in a savings account. You’ll also want to consider using the money to purchase stock. Just remember that you should always take care of your financial obligations first.

If you have money left over, you’ll be able to use it however you want.


Protecting Against Chronic Illness

Unfortunately, some Canadians have a chronic illness. This makes it difficult for them to work and live a happy life. If you fit into this category, you need to go above and beyond to protect yourself. One way to do that is by acquiring disability insurance. This is going to be tough because you cannot predict when you’re going to get sick. You never know when you’re going to become disabled. Nevertheless, you can still plan for a chronic illness. To do that, you need to find out how much disability coverage you need and go from there.

Remember that chronic illnesses do not need to be physiological. They usually are but they do not have to be. A Crohn’s disease flareup could cause intense pain making it difficult for you to return to work. Mental illness could lead to disability insurance benefits too. If a mental illness makes it difficult for you to work, you may be able to obtain disability insurance benefits.

The majority of disability will be caused by chronic conditions instead of accidents. Most occur outside of the workplace. However, you have to understand that some insurance companies exclude these illnesses. If you had a chronic illness before getting covered, the insurance company likely won’t cover it. If you believe you’re going to become disabled due to a hobby, you can avoid problems by planning ahead and getting coverage. Just make sure that you obtain enough coverage to pay for your bills.


Long And Short-Term Disability

There are two types of disability insurance. You have long and short-term disability insurance. When trying to find out how much coverage you need, you’ll have to determine which policy is going to work best for you. The main difference is the length of benefits. With short-term disability insurance, you’ll receive benefits for a few months. Long-term disability insurance can last much longer. Many Canadians already have short-term disability insurance thanks to an employer. It may be free or you may pay a small fee.

If you buy a plan without an employer, you may end up paying more. Remember that disability insurance is similar to life insurance. If you’re younger and healthier, you’ll be able to get it at a cheaper price.


General Disability Insurance Prices

How much can you expect to pay for disability insurance? For a 35-year-old man, you will likely be required to pay between $160 and $190 a month for long-term disability. It will last until you turn 65 and will pay more than $6,000 a month in benefits. This is an individual plan that is not obtained through an employer. Furthermore, it is important to understand that your needs may vary from another person’s. So, you need to obtain a policy that is going to work well for you.

Below, you’ll find out more about the factors that you’ll need to consider when purchasing disability insurance.


  • Your Job – First and foremost, you need to consider your job. Do you work a full-time job for an employer? Or, are you a self-employed business owner?
  • Income – You’ll also need to think about your income. You need enough coverage to cover your income while you’re disabled.
  • Benefit Amount – You’ll want enough insurance to cover at least 60% of your income. This should be enough to cover most of your take-home pay.
  • Waiting Period – Furthermore, you’ll want to ask questions about the waiting period. How long will you have to wait until you start receiving benefits? You’ll be charged a higher premium for a shorter waiting period. If you want to save money, you should opt for a longer waiting period.
  • Benefit Paying Period – You have to understand that the insurance company is not going to pay forever. So, you’ll want to make sure you have a sufficient benefit period. A shorter period means you’ll be paid for a shorter period. However, the premium will be cheaper.
  • Current Health – Before you can obtain disability insurance, you’re going to be asked about your health. If you’re in poor health right now, you can guarantee that you’re going to end up paying more for disability insurance because you’re a bigger risk. If you’re healthy and do not use drugs or alcohol, your premiums will be significantly lower.


Ultimately, there are numerous things to consider when purchasing disability insurance. Remember that you should always obtain own-occupation coverage. It is slightly more expensive but it’ll prove to be worth it. With own-occupation coverage, the insurance company will begin paying benefits when you’re no longer able to work your current job. You may be able to work other jobs but you cannot do your current job. If you can start working in another field, you can do so without losing your coverage. If you don’t have own-occupation insurance, you’ll have to prove to the insurance company that you cannot work at all. Otherwise, you won’t receive benefits.

Pay more and get own-occupation coverage. Also, it is a good idea to get residual disability coverage. It may increase your premiums but it’ll help pay for partial disability. So, it is a necessity. Finally, you should choose a non-cancelable plan. This is very helpful. With a non-cancelable plan, you can rest assured knowing that your plan will never be canceled as long as you continue paying the premiums. Furthermore, the insurer will not be able to modify your policy.

This means that they cannot increase the premiums. It might be expensive but you’ll want to choose a non-cancelable policy so you’ll always know what you’re going to pay.


get quotes


Types of Disability Insurance we offer


Other Disability Insurance Resources that you can read


get quotes

Why not get a free quote?

Takes less than 30 seconds. Compare multiple insurance companies at once.


get a quote now



Ok, sure.