7 myths about disability insurance

Debunking some common myths about disability insurance.

What does the term “disability” mean?

It refers to a person’s inability to perform the duties of his or her job due to a specific illness or injury. A person may be on short- or long-term disability depending on his or her situation.

Myth 1: You don’t need this type of insurance because you’ll never become disabled

You may never become disabled, but there’s no way for you to be sure either. What if your physical or mental health condition were to change suddenly? Would you be able to maintain your current standard of living? Disability insurance can help you plan for such unforeseen events and help you ensure your financial security. Based on the Association of Workers’ Compensation Boards of Canada (AWCBC)  (This hyperlink will open in a new tab)., workers have a 1 in 3 chance of becoming disabled for 90 days or more before age 65.

Myth 2: Disability insurance is too expensive

Disability insurance is typically less expensive than other types of insurance. What’s more, individual disability insurance products are flexible and can be tailored to your specific needs and income. You can therefore afford to pay a premium that fits your budget. Interesting fact: In the event of disability, the payments you’re entitled to receive may be tax-sheltered if you’ve paid 100% of the premiums.

Myth 3: Your group insurance already covers you in case of disability

Contrary to popular belief, your group insurance will not provide you with 100% of your employment income if you become disabled. You have the option of adding another disability insurance policy to cover an additional percentage and to make up for any shortfall in income. Since group insurance varies among employers, it’s best that you learn more about what your group insurance covers before disability strikes.

Myth 4: The money you set aside in an emergency fund can be used to offset your loss of income if you become disabled

You can dip into your emergency fund when you’re faced with unexpected expenses. However, if you become disabled, your savings may not cover your loss of income over a long period of time. Disability insurance will compensate you for your lost income so you can focus on what’s important, i.e. your recovery.

Myth 5: The government covers you in case of disability

Some government-run programs, such as those managed by the Société de l'assurance automobile du Québec (SAAQ), the Commission des normes, de l'équité, de la santé et de la sécurité du travail (CNESST) or the Quebec Pension Plan (QPP) may be of assistance to you in the event of a disability. However, these plans offer limited assistance and you have to meet several conditions to be eligible. And, they do not cover all types of disabilities. For example, workers’ compensation programs only cover disabilities owing to accidents occurring in the workplace. Lastly, government programs will not necessarily replace 100% of your income if you become disabled.

If you have disability insurance, you may be compensated for a portion not covered under government plans.

Myth 6: Depression is not a recognized cause of disability

If you suffer from depression or any other psychological disorder during your lifetime, you may receive compensation for time off work. Look into it to see whether this type of coverage is included in your policy.

Myth 7: Sick leave may be sufficient for disability

False. The number of sick days you’re entitled to is inadequate in the event of long-term disability. You would eventually run out of sick days and you would not be paid unless you have group disability insurance. Having individual disability insurance would give you the financial means to get through a leave from work that may last several months so that you can channel your energy on getting back on your feet!


*Each disability insurance policy is different. Check to see what coverage is included in your policy.