Disability Insurance Plans for Albertans
Affordable Disability Insurance plans designed for everyones needs across Alberta — Whether Short Term or Long Term
Let Private Lane Advisory build the right plan for you
What is disability insurance?
Private Lane Advisory's Disability insurance provides a monthly benefit (in the form of a cash payment) to partly replace income you lose while you are recovering from an illness or injury. This payment helps lower the financial and emotional impact of not receiving your regular paycheque.
How does disability insurance work?
Disability insurance offers you protection against you loss of income by replacing a substantial portion of your paycheque if you become disabled.
The insurance company will typically agree to replace 60% to 85% of your regular income, regardless of whether the loss of your earning ability was due to a sudden accident or a degenerative illness.
This ‘benefit’ payment is made to you until you return to good health or until the end of your disability coverage period – whichever comes first. The amount of the monthly benefit depends on the amount of coverage you take and other factors like the waiting period and occupation definition you choose.
Serious illness, debilitating injuries, mental health, and other issues which require lengthy hospital stays are common in Canada. Around 1 in 7 Canadians have a disability. Additionally, 33% of workers between ages 30-64 will experience a disability for longer than 90 days. While health care covers the cost of treatment, it does not cover lost wages from missing work.
Some people will assume they have full disability coverage through their work disability insurance - known as group disability insurance - or another policy they may have like critical illness insurance. Unfortunately, this is not the case. While it's possible you have limited coverage through your work, having individual disability insurance coverage often goes beyond the protection limitations of other forms of coverage you may already have.
If you are one of the majority of Canadians that depends on your ability to earn a paycheque to maintain your quality of life, a disability insurance policy is worth it. You can use the proceeds in several ways while you recover:
- Income replacement
- Ongoing expenses
- Doctor consultation
- Rehabilitation
Does term life insurance cover disability?
No, term life insurance does not cover lost income due to disability in Alberta or Canada.
If you are contemplating getting term life insurance soon, you may have the ability to add a disability insurance rider to your policy as an optional benefit.
Many insurance carriers that Private Lane Advisory has access to, have coverage options for disability or critical illness riders that can supplement your income should you fall ill.
Is disability insurance taxable?
Disability income may or may not be subject to income tax depending on whether the policy premium was funded with pre-tax or after-tax dollars.
If you are paid out by a policy that was fully or partly paid by your employer or group association, you will be taxed when you receive the monthly payment.
Disability plans you pay entirely on your own for, you do not pay taxes on your payout. If you are paying the full price for premiums throughout your coverage period, and you do not claim them as tax-deductible business expenses, you will not be taxed on the payout during the benefit periods upon filing a claim.
Private Lane Advisory's Short Term Disability Insurance Vs. Long Term Disability Insurance
The major difference between short term disability insurance and long term disability insurance can usually be narrowed down to the length and severity of an injury or illness.
Short term disability insurance is generally part of one's workplace benefits and provides a weekly sum of cash while you're recovering.
Long-term disability insurance is meant to replace a portion of your income should you become injured or ill and it affects your ability to work for an extended period of time.
What is the definition of disability?
There are three different kinds of disability insurance coverage one can purchase. Own, Regular, and Any.
Own-Occupation: A policy with an own-occupation definition protects your ability to work in your specific profession. There are no restrictions: for instance, you can continue to receive benefit payments even if you’re able to work in another occupation or in any other capacity.
Regular-Occupation: A policy with a “Regular Occupation” definition also protects your ability to work in your pre-injury occupation or one fitting your experience and level of education.If you choose to work in a different occupation, your benefits will be reduced, or fully withdrawn.
Any-Occupation: This is the most stringent definition of disability that can be covered in a disability insurance policy. Under this type of policy, you may be ineligible to receive benefits if you can work in any other job.
Do I need supplemental disability insurance?
Private Lane Advisory advises that there are some clear factors you can consider when deciding whether you need to purchase supplemental disability insurance. With a supplemental - independent - disability insurance policy, you own your coverage. This is the opposite of a group plan, where the policy administrator, such as your employer, owns the policy and controls its details.
With supplemental disability insurance, you can seek the maximum coverage amount your individual circumstances allow and add additional top-ups to make it the perfect policy for you.
The coverage is portable: it goes wherever you go, regardless of whether you change employers or make new friends with new group memberships. Your cost of insurance will not change unless you increase the coverage amount.
With so much depending on your earning ability, group disability plans may not be enough. Instead, consider supplemental disability coverage with Private Lane Advisory.
Can I buy disability insurance on my own?
Yes, you can apply for your own disability insurance policy, which you own outright and does not belong to your employer or your association or group such as a collection of professionals like doctors, dentists, etc.
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Let’s Build a Disability Insurance Plan That Works for You
Whether you need Short Term Disability Insurance or Long Term Disability Insurance, Private Lane Advisory is here to help.
Private Lane Advisory will walk you through your options, compare quotes from Alberta’s top insurers, and create a plan that supports you — without stretching your budget.
Start with a free consultation today.
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