Types of Disability Insurance in Alberta
There are two major types of disability insurance plans available in Alberta:
- Short Term Disability Insurance Plans – Short term disability benefits help policyholders who suffer temporary illnesses or injury that leave them out of work for brief periods, generally up to 120 days when unemployment insurance may also be available.
- Long Term Disability Insurance Plans – Long term disability benefits provide income replacement during extended periods of time, generally 90 days after injury and can last up until the age of 65.
Eligibility for Disability Insurance Benefits
In Canada most disability insurance plans available through executive benefits packages will cover between 54 and 70% of the eligible policyholder’s gross taxable income, tax-free.
These disability insurance plans can differ on how the insurance companies determine eligibility for disability insurance benefits, which is commonly defined as:
a) Policyholder is unable to perform their current job duties due to injury or illness
b) Policyholder is unable to perform job functions at any line of work they are qualified for (education, experience, training) due to injury or illness
Disability Insurance Policy Coverage
Some of the most common reasons for disability insurance claims include:
Musculoskeletal Disorder – including degenerative disc disease, arthritis, soft tissue damage
Mental Disorders – including major depression and bi-polar
Nervous System – including MS, Parkinson’s and Alzheimer’s
Circulatory System – including chronic pain, fatigue and fibromyalgia
Miscellaneous Illness – including digestive disorders, infectious disorders, allergies, respiratory conditions
A disability insurance plan can be a vital component of any executive benefits package in that the policyholder’s disability insurance benefits are dispersed tax-free.