CLHIA-ACCAP - Consumer Information

A guide to disability insurance

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TYPES OF DISABILITY INSURANCE For some plans, the payment of benefits is based on the loss of income instead of the complete inability to work. This helps if, because of an accident or sickness, you can still work but not like you did before. In other words, you might not be able to work for the same number of hours or do the same type of work you did before you became disabled. Many plans will include a feature that waives your premium payments while you are disabled. Other plans will offer a guarantee that you can increase your coverage (at certain times and within limits) without having to answer additional health questions. Concerning the length of coverage, some plans pay benefits: • for only specified lengths of time (usually two to five years), • for as long as you remain disabled or to age 65, whichever comes first. Lifetime benefits may also be an option. Group Insurance Plans Group disability insurance plans provide 4.6 million Canadians with short term disability coverage and more than 10 million with long term disability protection. Typically, a group plan through your place of employment provides three different levels of coverage: Sick leave If you are sick or injured, you receive full pay for a short period of time (usually a few days or up to a few weeks, sometimes longer, depending on the employer). This is coverage provided by the employer, usually at no cost to you. Short Term Disability (STD) This coverage begins when your sick leave runs out. Most short term disability plans pay a percentage of normal earnings – for example, 70 per cent – up to a certain length of time. Typically, this can be up to 15, 26 or 52 weeks. Some employers, however, choose not to provide short term disability benefits, relying instead on Employment Insurance (EI) disability benefits. TIP: Benefit plan options are determined by your employer when the plan is set up with the insurance company. Some plans may offer you the ability to choose how much LTD coverage you would receive. Remember to check your employee booklet carefully for the details of your coverage. 4

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