Disability insurance (salary insurance) – FAQ

I am an independent worker without fringe benefits. Should I purchase disability insurance, also known as salary insurance?

Disability insurance would replace your income in the event an accident or illness prevented you from working. It provides important coverage because it would enable you to maintain an acceptable living standard.

What is the difference between short-term and long-term disability?

With short-term disability insurance, benefits are generally paid for up to 24 months. Short-term disability is usually defined as the inability to perform usual employment tasks because of an accident or illness.

As for long-term disability insurance, it pays benefits up to the age of 65, or retirement age, or for a period set out in the contract. It is usually defined as the total inability to perform each and all remunerative employment functions.

Before signing up for disability insurance, it is very important to understand the definition of disability as well as any related restrictions and exclusions.