Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.

Coronavirus: Will disability income insurance cover me?

Learn how disability income insurance can help – whether you’ve already got coverage or you’re thinking about buying it.

We’ll continue updating this page with resources and information as new details emerge on how Canadian leaders and businesses are responding to COVID-19.

The coronavirus (COVID-19) pandemic is putting thousands of jobs at risk. If you’re worried about being out of work for a while, either because you could fall sick or your business might be forced to close, income protection insurance could help.

How does disability income insurance work?

Disability insurance pays out a percentage of your salary, usually anywhere from 60% to 85% of your income, if you’re unable to work due to a debilitating injury or illness. It replaces part of your paycheck for a specified period of time. Each insurer will have a list of disabilities that qualify for benefits.

There are two types of coverage:

  • Short-term disability insurance (STD) typically replaces part of your paycheck for up to 6 months.
  • Long-term disability insurance (LTD) usually replaces 60% to 70% of your paycheck for 2, 5 or 10 years, or until you reach retirement.

With a typical quarantine time of only 14 days, you’d most likely invoke short-term disability insurance to cover the impact of COVID-19. It’s typically available to both employed and self-employed people, and some income protection policies may even even let you add involuntary unemployment coverage to your policy. That way, you’re not just covered in the event of illness or injury, you’re also covered if you’re let go.

Will disability insurance help if you catch COVID-19?

If you have disability insurance, you should be able to claim on your policy if you catch COVID-19 and are out of work for a while. If you buy a policy today, you may even be covered for COVID-19 if you catch the disease in a few weeks.

While STD policies usually include a “waiting period” that can range from 1 to 10 days before you start to receive benefits, many life insurance companies are waving the waiting period requirement based on the Canadian Life and Health Insurance Association (CLHIA) recommendation. This way people infected with COVID-19 or who are adhering to a medically-directed quarantine can start receiving their short-term disability insurance benefit right away.

Canada Life, Manulife, Blue Cross, and iA Financial Group have all announced they will be waiving the waiting period for eligible COVID-19 cases. Sunlife has also announced that they will consider giving short-term disability benefits to those who show no symptoms but are placed under quarantine. With the ever-evolving response to COVID-19, your best option is to check with your insurance provider to make sure you get access to its most up-to-date benefits.

What if you’re laid off because of COVID-19?

If you have disability insurance with additional involuntary unemployment coverage, you may be able to make a claim in the event you lose your job or your business has to close because of the coronavirus.

However, unemployment coverage has some key restrictions. First, your policy may require a no-claim period. This is the length of time from when you buy your policy to when you become eligible for benefits.

There is also a waiting period. This is the length of time from when you lose your job to when you can claim benefits. Typically, the waiting period is 30 days.

That means if you bought your policy today, you would have to be safely employed for certain number of months and be out of work for 30 days before you could lodge a claim for involuntary unemployment benefits.

What you can do if you lose your job due to COVID-19

Is it too late to get disability insurance?

No. It’s never too late to get disability insurance. Even if you don’t end up needing it due to the coronavirus (COVID-19) pandemic, it may come in useful at a later date.

So if you’ve been thinking about getting disability income insurance, there’s no harm in doing it now.

What are my other options for financial help during COVID-19?

Regardless of whether disability insurance is right for you, there are several other ways you can seek financial support if you’ve been adversely impacted by the coronavirus pandemic.

Canada Recovery Benefit (CRB — replaces the Canada Emergency Response Benefit)

The government is devoting funds to support workers who are facing unemployment, because they’ve lost their jobs or experienced reduced hours due to coronavirus.

According to the government’s plan, this support will provide a taxable benefit of $1,000 ($900 after taxes) for 2 weeks up to a maximum of 26 weeks for people who meet all certain criteria during the period for which they’re applying. You’ll need to re-attest every 2 weeks after that to reconfirm your eligibility.

You can apply through your CRA My Account or by calling 1-800-959-2019 or 1-800-959-2041. You’ll need your Social Insurance Number (SIN) and postal code to verify your identity over the phone. Funds will be delivered in 3-5 business days for direct deposit or up 10-12 business days for cheques delivered by mail.

Canada Recovery Sickness Benefit (CRSB)

This support will provide a taxable benefit of $500 ($450 after taxes) for a 1-week period up to a maximum of 2 weeks. You’ll need to reapply after the first week if you need funding for the second week. Applications for this benefit are now available, and you’ll need to attest that you meet the eligibility requirements.

You can apply through your CRA My Account or by calling 1-800-959-2019 or 1-800-959-2041. You’ll need your Social Insurance Number (SIN) and postal code to verify your identity over the phone. Funds will be delivered in 3-5 business days for direct deposit or up 10-12 business days for cheques delivered by mail.

Canada Recovery Caregiving Benefit (CRCB)

This support will provide a taxable benefit of $500 ($450 after taxes) for a 1-week period up to a maximum of 26 weeks. You’ll need to reapply each week if you need continued funding. Applications for this benefit are now available, and you’ll need to attest that you meet the eligibility requirements.

You can apply through your CRA My Account or by calling 1-800-959-2019 or 1-800-959-2041. You’ll need your Social Insurance Number (SIN) and postal code to verify your identity over the phone. Funds will be delivered in 3-5 business days for direct deposit or up 10-12 business days for cheques delivered by mail.

If you’re worried about the prospect of unemployment, read our guide on how to prepare, so you’ll be in a stronger financial position if you do find yourself out of work. If you’ve already lost your job, you may be able to claim financial hardship and take a break from certain bills. Our guide walks you through the ways you can get help.

Compare life insurance providers

Name Product Types of Insurance Coverage Range Issue Ages Medical Exam Required Province Availability
PolicyMe Life Insurance
Term Life
$100,000 - $10,000,000
18 - 75 years old
No
Alberta, British Columbia, Manitoba, Nova Scotia, Ontario, Prince Edward Island and Saskatchewan
Get fast and affordable term life insurance without the need for a medical exam with PolicyMe.
TermLite Term Life Insurance
Term Life
$10,000 - $1,000,000
18 - 80 years old
No
All of Canada
Get fast and easy-to-understand term life insurance with no medical exam and no paperwork required.
Sun Life Go Term Life Insurance
Term Life
$100,000 - $1,000,000
18 - 69 years old
No
All of Canada
Sun Life Go Term Life Insurance is a standard term life insurance option that guarantees your premiums in the first 10 or 20 years of your policy.
RBC Life Insurance
Term Life
$50,000 - $25,000,000
18 - 75 years old
No
Ontario, Alberta and Manitoba
Select from two unique RBC term life insurance plans to get flexible and affordable coverage that suits your lifestyle and budget. Get a free quote through PolicyAdvisor.
PolicyAdvisor
Whole Life, Term Life, Universal, No Medical
$25,000 - $5,000,000
18 - 75 years old
No
Alberta, Manitoba, Ontario
PolicyAdvisor is a digital life insurance brokerage that has partnerships with 20 insurers in Canada.
loading

Compare up to 4 providers

Keep up-to-date on all things related to COVID-19

More guides on Finder

Ask an Expert

You must be logged in to post a comment.

Go to site