Critical illness and disability insurance in Canada

To help you learn more about disability insurance and critical illness insurance, MoneySense has several articles that explain what they cover and what to consider when applying for a policy. We also cover mortgage life insurance, which covers your mortgage payments if you’re unable to work. 

Nobody wants to spend more money on insurance, so you may be questioning the necessity of signing up for yet more policies on top of your home and auto coverage. But imagine that you’re unable to work for several months. How long would you be able to cover your bills and your rent or mortgage payments? Disability insurance and critical illness insurance can fill a critical gap in your or your family’s finances. As with any type of insurance, we hope you’ll never need to make a claim—but if you ever do, having these policies in place can provide much-needed financial support and peace of mind.

Disability insurance in Canada

• What you need to know about disability insurance
• 7 disability insurance myths to stop believing
• What is short-term disability insurance?
• You need long-term disabiity insurance. Now what?

Critical illness insurance in Canada

• 8 critical insurance myths 
• Critical illness insurance: Is it worth it? 

Choosing disability and critical illness insurance

• How to choose the right insurance: Mortgage, life or disability?
• Does our young family have enough insurance? 
• Insurance you need and don’t need 
• How a young family can make the best use of an insurance payout 

Mortgage life insurance

• Can I get mortgage insurance if I’m on long-term disability? 
• Do you need mortgage life insurance? 

More about disability benefits

• CPP and disability: When should you retire and start your pension?

How much does long-term disability insurance pay?

If you become unable to work due to an injury or a serious illness—such as cancer, a heart attack or Alzheimer’s disease—disability insurance replaces 60% to 85% of your regular income. 

How much does critical illness insurance pay?

Critical illness insurance pays you a one-time lump sum if you have a life-threatening illness, such as cancer, a stroke, a heart attack or Alzheimer’s disease. The amount depends on how much coverage you decide to purchase.

Disability insurance for self-employed Canadians

If you’re self-employed, consider buying your own disability insurance and critical illness insurance. Even if you have access to health coverage through your spouse’s or common-law partner’s employee benefits program, this may not include “spousal disability.” Check the policy or ask the benefits provider.

Getting a disability insurance quote

Life insurance providers offer disability insurance and critical illness insurance, which fall under the umbrella of “living benefit products.” If you already have life insurance, ask your insurer about adding these other types of coverage. You can also consult an insurance broker, who will get quotes from multiple insurers on your behalf. If you don’t already have life insurance, shop around for a policy and ask about adding disability and critical illness.

Finding advice on insurance

If you want personalized, unbiased advice on insurance, consider speaking to a financial advisor or an insurance broker. They can take a holistic look at your finances and recommend how much coverage to get.

About Jaclyn Law

Jaclyn Law is MoneySense’s managing editor. She has worked in Canadian media for over 20 years, including editor roles at Chatelaine and Abilities. Jaclyn completed the Canadian Securities Course in 2022.

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