Canada Life Disability Insurance Review

Disability insurance can protect you and your family financially in the event of unexpected circumstances. However, picking the right insurance plan is not always easy.

Among the various options available is Canada Life, a household name and one of the country’s top insurance providers. But is Canada Life's disability insurance cover right for you? 

Let’s find out. 

Who is Canada Life?

Canada Life is one of the biggest names in Canada’s insurance industry. The company has been around since 1847, is financially stable, and offers a range of financial services and insurance products, including life insurance, critical illness insurance, and disability insurance.

Our Canada Life Disability Insurance Review

Canada Life’s Lifestyle Protection plan offers comprehensive and flexible coverage, while the Independence plan covers those who don’t qualify for traditional coverage or have risky jobs.

So, whether you are a high-earner, self-employed, part-time worker, seasonal worker, or business owner, Canada Life may be a good option. 

‍

Canada Life Disability Insurance Plan Options

Canada Life has two long-term disability insurance (LTD) plans: the Independence plan and Lifestyle protection plan. Both are designed to provide a fixed monthly benefit for a specific period or until you recover in the event of total disability, but there are key differences between the two. 

Let’s look at the key features and pros and cons of each of them, before looking at how they stack up against each other. 

Lifestyle Protection Plan 

This is Canada’s Life most popular disability insurance plan — and understandably so. It provides both illness and accident coverage and can be a suitable option for a wide range of earning population, including those who are employed, run their own business, or work part-time. 

Key Features: 

• Monthly Benefit: The monthly benefit is 50-80% of your pre-disability income, up to a maximum of $25,000. 
• Built-in Benefits: The Lifestyle Protection Plan comes with many, such as catastrophic disability insurance (pays an increased monthly disability benefit amount, on top of the standard benefit).
• Non-cancellable: This is a non-cancellable plan, meaning Canada Life cannot increase the premiums or change or reduce the benefits during the life of the policy. 
• Own occupation rider: The own occupation rider is available to occupation classes 3A or 4A (e.g. lawyers, doctors, engineers, programmers, consultants, etc.).
• Waiting period: The shortest waiting period is 30 days and the longest is 730 days. Most people, however, opt for a 90-day or 120-day waiting period. Anything shorter, and your premium rate may increase significantly,  while a waiting period longer than 120 days may cause substantial financial stress in the event of a disability. 
• Benefit period: The disability benefits are payable for 2, 5, or 10 years, or until age 65. 
• Flexibility: Availability of many riders (e.g. residual disability, partial disability, own occupation, return of premium, etc.) gives you the flexibility to tailor the coverage to your specific needs. 

Independence Plan

This plan is geared toward people (e.g. seasonal workers, freelancers, part-time workers, etc.) who do not have access to group disability insurance. The Independence plan provides injury-only coverage, meaning the basic plan will pay out only in the event of an injury-related disability. If you want comprehensive cover, consider purchasing illness coverage separately. 

Key Features

• Monthly Benefit: The plan pays up to $3,000 in monthly benefits.
• Type of Coverage: Injury-only.
• Medical Exam: The Independence plan doesn’t require taking a medical exam. Lenient underwriting guidelines, coupled with the fact that premiums are not based on occupation, make it a suitable option for people who work in high-risk professions or have pre-existing illnesses. 
• Waiting period: The waiting period can be as short as 2 weeks or as long as 120 days. Other options include 30 and 90 days. 
• Benefit period: The plan pays disability benefits every month for one, two, or five years, or until age 65. 
• Riders: The Independence plan offers a choice of three riders: cost of living, future insurability, and accidental death. 

‍

Here’s a table that shows how the Lifestyle Protection plan compares with the Independence plan. 

‍

Canada Life Disability Insurance Plan for Businesses

Apart from individual disability insurance solutions, Canada Life offers disability insurance plans specifically aimed at business owners. 

Buy-sell disability insurance:

‍Similar to a buy-sell agreement, but focused on disabilities. In the event of one partner becoming disabled, it allows other partners to buy the former’s share in the business. 

Business overhead expense:

‍ It helps cover operating expenses, allowing business continuity while you recover. 

Key person disability insurance:

‍ It provides compensation to the company if a key person is unable to work due to disability. 

Do you need an individual disability insurance policy if you have access to group coverage?

Group disability insurance doesn’t require the insured members to undergo a medical examination and is much cheaper (sometimes, even free). So signing up for it is a no-brainer, but relying solely on it may not be in your best interests. Group coverage has several limitations and may leave you uninsured or without a policy down the road. 

Here are the main reasons why you should consider supplementing a group disability insurance plan with an individual policy: 

• Group disability insurance provides limited coverage: The benefit amount is rather limited in group insurance. In contrast, when you buy an individual plan, you can select as much coverage as you reasonably need. 
• Group plans are often not flexible: Generally, the employer chooses the coverage options, meaning the plan may not be tailored to your specific needs. 
• Group plans are not always portable: If you lose or leave your job, group coverage may end. This can put you in a tight spot, particularly if your health is not what used to be. Getting sizable disability insurance coverage when you are older and not in great shape can be challenging or, at the very least, costly. 

How Much Does Canada Life Disability Insurance Cost?

An individual long-term disability insurance plan usually costs anywhere between 1% and 3% of the annual salary. That said, each case is different and how much exactly you’ll pay for Canada Life disability insurance depends on several details specific to your needs and preferences, such as:  

• Your age and overall health status
• Smoking status
• Your job and annual income
• The monthly benefit amount you opt for
• The length of the benefit and waiting periods
• The optional benefits you opt for

As you can imagine, the premiums may be more expensive if you are older, have pre-existing illnesses, or need a lot of coverage. Likewise, a smaller waiting period, a longer payout period, and a lot of optional benefits will increase the cost of coverage. 

If you want a personalized quote for Canada Life disability insurance, contact Dundas Life today. 

Applying for Canada Life Disability Insurance

Want to apply for Canada Life disability insurance? Let Dundas Life help you. Click the Check My Price button to get a free quote or schedule a call with an advisor to start the application process.

Why should I get Canada Life disability insurance?

Your bills won’t stop even if your pay check does. Would you be able to provide for your family if you couldn’t work due to illness or injury?

If the answer is “no”, investing in a comprehensive disability plan, such as Canada’s Life disability insurance cover, could be a smart move. If the unthinkable happens, your policy can act as an income replacement tool. You can use the funds to cover various expenses, including: 

• Debt payments
• Daily living bills
• Medical expenses not covered by your personal or group health insurance plan
• Childcare 

With adequate level of coverage, you get peace of mind, knowing you will be able to take care of yourself and your family even if you lost the ability to work. 

Conclusion

Canada Life’s two disability insurance plans cover most occupations. Whether you run your own business, are self-employed or a seasonal worker, or work full-time or part-time, Canada Life can help you protect yourself against life’s vagaries.

However, since premium rates vary by insurer, it’s a good idea to get price quotes from multiple insurance companies. This will ensure you don’t overpay or buy a plan that doesn’t meet your needs.

Dundas Life can provide you with free quotes from different providers so that you can objectively decide if Canada Life is truly the right fit for you. Book a call with an advisor today.

FAQs

Is there a maximum benefit payout with Canada Life disability insurance?

Canada Life offers two individual long-term disability insurance plans: Lifestyle Protection and Independence. The Lifestyle Protection plan includes both illness and injury coverage and has a maximum monthly benefit of $25,000. The Independence plan, on the other hand, offers only injury coverage and is capped at $3,000 a month. 

What happens if I change jobs or become self-employed after purchasing Canada Life disability insurance?

If you have an individual disability insurance plan from Canada Life, a career change won’t impact it. Your coverage will continue as before, provided you pay the premiums. 

Can I purchase additional riders or enhancements to supplement my disability insurance coverage with Canada Life?

Yes, Canada Life offers optional riders and enhancements, such as cost-of-living adjustments, return of premium, and critical illness riders, to enhance your disability insurance coverage.