Disability and Income Insurance Plans in Ontario

What are the disability and income replacement benefits available in Ontario?

In the province, disability and income replacement benefits include the Ontario Disability Support Program (ODSP), Income Replacement Benefit (IRB), and the Disability Tax Credit (DTC).

• The ODSP gives financial aid, prescription medications, dental and vision care, as well as other benefits. You can submit your application online, over the phone, or in person.
• The IRB is a weekly benefit that can replace up to 70% of your gross income for a maximum of $400 a week.  It is possible to receive the benefit for life if you are totally unable to work.

You can increase your disability benefits by setting up your private insurance policy.

• The DTC is a non-refundable tax credit that lowers the income tax for persons with disabilities.  If a medical practitioner certifies that you suffer from a prolonged and severe disability, you may qualify for DTC.

How long does long-term disability insurance work?

If you suffer a disability, you can file a disability claim with your insurer.  Once your claim is approved, the waiting period kicks in. This is the number of days stipulated in your policy after your disability starts which can be 30 days to 1 year.  Once the waiting period is fulfilled, your monthly disability payments begin.

Long-term disability benefits have a benefit period which can be 24 to 120 months or up to age 65.

Do I need disability insurance if I have government benefits?

Some people may think they don’t need disability insurance because they have the CPP/QPP, Workers’ Compensation and employment insurance, and ODSP.  However, these benefits may not be enough to cover your needs during a period of disability.

Find out how much you qualify to receive for disability benefits from the government to see if you need more. 

What are the benefits of buying disability and income insurance?

Disability in Canada is very common, with more than 40% of Canadians suffering a disability for 90 days or longer before reaching age 65.

Disability and income insurance replaces a significant portion of your earnings. You can meet your financial obligations during a period of disability without using your savings for retirement.

How long can you receive disability benefits from your insurance?

Short-term disability benefits usually pay for up to 6 months.  On the other hand, long-term disability benefits can last until the insured is able to return to work or up to the maximum benefit period. The benefit period is indicated in the policy which can be 5 years or up to age 65.

What is the maximum amount I can get from LTD insurance?

The maximum amount you can receive from Long-Term Disability (LTD) benefits in Ontario is affected by various factors such as the LTD insurance plan, your earnings before the disability, and the duration and type of disability.

LTD policies have a maximum amount each month and depends on the policy’s terms.  They also have a benefit period according to the plan you have.

Disability and income insurance policies can cover from 60% to 90% of your regular earnings. 

Can LTD insurance benefits be combined with other disability benefits?

LTD insurance benefits can work in tandem with other benefits such as the Canada Pension Plan Disability, or employer benefits.  These are, however, subject to reductions.

Are LTD benefits tax-free in Ontario?

LTD benefits are considered taxable income. If you paid for the policy with after-tax income, a portion of your benefits may be tax-free.

Is disability and income insurance worth it in Ontario?

You work hard to save for the future. Think of what will happen if you can’t work due to a disability or illness?

Disability and income insurance plans ensure you are able to pay for living expenses and other bills while unable to work.