Group disability insurance in Canada: Full 2025 guide
- Monthly benefits not subject to taxation
- Professional rehabilitation program
- Premium waiver in case of total disability
- 4 optional coverage endorsements available
- Monthly benefits not subject to taxation
- Professional rehabilitation program
- Premium waiver in case of total disability
- 4 optional coverage endorsements available
The Superior Program by iA Financial Group is a flexible and inclusive disability insurance option offering up to $120,000 in total coverage, available to individuals working as little as 21 hours per week, with no minimum income requirement - a rare feature in this market. It accommodates a broad spectrum of occupations, from class 4A to C, and provides non-taxable monthly benefits, boosting its real value in case of a claim. Notably, it includes access to a vocational rehabilitation program, supporting the return to work after a disability. The policy can be renewed until age 70 and offers four optional riders to tailor protection to individual needs. Its design is particularly welcoming to newcomers to Canada, who often face barriers with more traditional underwriting.
Ideal profile:
Best suited for self-employed professionals, part-time workers, or recent immigrants who may not meet typical income thresholds but still want meaningful protection against income loss due to disability.
- No minimum pre-tax income required
- Non-taxable monthly benefits
- Vocational rehabilitation support included
- Renewability up to age 70
- Strong flexibility with optional riders
- Maximum coverage capped at $120,000
- Limited to occupational classes 4A to C (excludes higher-risk jobs)
- Riders not automatically included—extra cost may apply
- Total or partial disability
- Combines with group insurance
- Premium refunds
- Total or partial disability
- Combines with group insurance
- Premium refunds
Beneva’s Disability Insurance provides accessible coverage up to $72,000, targeting a wide range of professionals in classes 4A to B—without requiring a minimum income or medical questionnaire, making it especially easy to qualify. It can be renewed until age 65 and offers the option to combine with existing group insurance, which can increase overall benefits. A standout feature is its premium refund option, which allows policyholders to recoup some costs if no claim is made. With four optional riders, this plan is adaptable to personal and professional needs while remaining simple and inclusive.
Ideal profile:
Great for freelancers, part-time professionals, or newcomers to the workforce seeking basic, hassle-free protection—especially those looking for insurance without needing to prove income or undergo medical underwriting.
- No income or medical requirements
- Premium refund feature adds long-term value
- Can be combined with group coverage
- Four optional riders for customization
- Coverage limit of $72,000 may be too low for high earners
- Not renewable beyond age 65
- Restricted to lower-risk occupational classes (4A to B)
- Option for total or partial disability
- 13 optional coverage endorsements available
- Included rehabilitation benefit
- Indemnity periods of 24, 60, 120 months
- Option for total or partial disability
- 13 optional coverage endorsements available
- Included rehabilitation benefit
- Indemnity periods of 24, 60, 120 months
Canada Life’s Independence Protection Insurance stands out with an impressive maximum coverage of $300,000, making it one of the most robust individual disability insurance products available. Aimed at professional classes 4A to B, it requires a minimum net income of $35,000, balancing accessibility with comprehensive protection. The plan offers up to 120 months of benefits, a partial disability option, and a generous suite of 13 optional riders to tailor coverage. With non-cancellable terms until age 65 and no medical questionnaire required, it delivers strong stability and flexibility—particularly attractive for those with fluctuating employment patterns, like part-time or seasonal workers.
Ideal profile:
Designed for mid- to high-income earners such as self-employed consultants or gig economy professionals who meet the income threshold and want long-term, customizable protection without medical underwriting.
- Very high coverage ceiling ($300,000)
- No medical exam required
- 13 optional riders allow detailed customization
- Partial disability coverage included
- Long benefit period (up to 10 years)
- Requires minimum net income of $35,000
- Only available to occupational classes 4A to B
- Not renewable beyond age 65
- Premiums guaranteed for the first 5 years
- Critical illnesses automatically included
- Premium return at 20 years
- Premiums guaranteed for the first 5 years
- Critical illnesses automatically included
- Premium return at 20 years
Humania’s Prohealth Accident and Sickness Insurance is a highly inclusive plan offering up to $120,000 in coverage, open to all professional classes and requiring no minimum income or medical questionnaire, making it easy to access for a wide audience. It includes critical illness coverage by default, which is uncommon in this segment, and offers a premium refund every 20 years, adding long-term financial value. The plan is renewable until age 65, with premiums guaranteed for the first five years, providing stability and predictability. Its simplicity and wide eligibility make it a standout for those needing straightforward, all-in-one coverage.
Ideal profile:
Perfect for blue-collar workers, self-employed individuals, or newcomers to Canada looking for hassle-free, broad-spectrum protection that combines disability and critical illness in one plan.
- No income or medical requirements
- Covers all occupational classes
- Includes critical illness coverage automatically
- Premium refund every 20 years
- Guaranteed premiums for 5 years
- Coverage capped at $120,000
- No renewal beyond age 65
- Fewer customization options compared to higher-end products
- Offers a wide range of products tailored to different profiles and needs
- Competitive premiums and rates
- Personalised cover and optional benefits
- Access to disability assistance and support services
- Offers a wide range of products tailored to different profiles and needs
- Competitive premiums and rates
- Personalised cover and optional benefits
- Access to disability assistance and support services
RBC’s Professional Series® Policy is a solid mid-range disability insurance plan offering up to $72,000 in coverage, targeting professional classes 4A to A. It requires a relatively low minimum income of $6,000 annually and at least 30 hours of work per week, balancing accessibility with traditional underwriting standards. The plan is non-cancellable until age 65, ensuring long-term stability, and includes partial and residual disability benefits, which are crucial for gradual return-to-work scenarios. It also features seven optional riders for added flexibility and is available without a medical questionnaire, simplifying the application for healthy applicants.
Ideal profile:
Ideal for full-time salaried professionals, especially those early in their careers or earning a modest income, who want dependable protection with strong built-in benefits and the option to expand coverage.
- Non-cancellable until age 65
- Partial and residual disability coverage included
- Low income requirement ($6,000/year)
- Seven riders available for customization
- No medical exam needed
- Limited to professional classes 4A to A
- Maximum coverage capped at $72,000
- Requires minimum 30 hours of work per week
Did you know that the odds of you being unable to work for at least 1 year due to a disability before you reach retirement age is 25%? And, did you know that the average Canadian aged 35-44 only has $27,151 in liquid savings?
With an average household cost of living for a couple being around $3,500 per month, most households wouldn’t be able to financially survive a year out of work with no income. This is why group disability insurance in Canada is of immense importance and understanding the coverage vital to your financial stability.
This article dives into group disability insurance policies in Canada, how it works, pros, cons, costs, and the best plans. Use our free comparator to compare plans from top providers and get free quotes right here.
Group Disability Insurance: 4 Key Takeaways
- Group disability insurance is widely provided as an employee benefit in Canada.
- Long-term plans will commonly have an elimination period of 90 days.
- Short-term plans will only provide temporary income.
- Group benefits are taxable when paid by the employer.
What is group disability insurance in Canada?
Group disability insurance is a plan that provides coverage to a group of individuals such as company employees or a set group of members part of associations and organizations.
If one of the named individuals on the group disability insurance policy can no longer work due to an injury or illness, the insurance will provide that individual with a replacement income.
The replacement income is usually a set percentage of your salary and can be used at your discretion to cover living expenses, financial obligations, or other costs you may incur as part of your disability. Remember that the group disability insurance is often included in your company’s employee benefit package so make sure to ask your HR department for the specifics of your plan.
If you want to explore the best disability insurance plans in Canada, look no further. You can use our free comparator tool below to compare plans from the best providers in the market and even get free quotes based on your unique needs.
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What is long-term vs short-term group disability insurance?
Group disability insurance policies vary between companies and organizations due to specific optional add-ons. However, in and above these extra add-ons, the major differences in group plans lie in the type of policy you receive.
These policies are widely divided into two main category types: group short-term disability insurance (GSTD) and group long-term disability insurance (GLTD).
Each group disability insurance type provides a different level of coverage and the protection is based on the severity and length of the individual’s disability.
Group long-term disability insurance benefits
Long-term group disability insurance provides employees with long-term benefits if they suffer from serious health concerns, leading to extended disability and long periods away from work.
- Long-term income replacement: GLTD insurance provides the insured individual with a percentage, usually ranging between 50% and 70% of base salaries. This ensures a certain level of financial stability when recovering from prolonged disability.
- Maximum benefit: Long-term disability coverage usually has a maximum payable benefit range, regardless of your salary.
- Prolonged coverage period: The typical coverage periods for long-term plans can be 2 years, 5 years, or up to retirement.
- Elimination period: Group long-term policies usually have a waiting period between when the disability occurs and when the first benefit is paid to the individual. This elimination period can range from 14 days to up to a year, although 90 is usually the norm.
- Coverage for serious disabilities: GLTD usually provides coverage for more serious disabilities and chronic illnesses that may inhibit someone from completing their normal line of work and in need of significant recovery time.
Group short-term disability insurance benefits
As the name suggests and contrarily to long-term group insurance, short-term group disability insurance policies only provide the insured individual with temporary cover when they cannot work due to disability. It is specifically designed to bridge a short-term gap where the employee has to be off due to minor disabilities.
Short-term group disability insurance policies provide individuals with the following benefits.
- Temporary income replacement: Short-term group disability insurance provides the insured with benefits for a brief period, ensuring that an individual can meet their immediate financial obligations when recovering from a short-term disability.
- Immediate benefits: Benefits from a GSTD policy usually start immediately from the day a disability is diagnosed and the individual is unable to work. Some policies, however, do have short waiting periods of up to 15 days.
- Length of coverage: The disability benefit is usually paid to the insured for a period ranging from a few weeks up to one year, depending on the policy terms.
Supplement Group Disability Insurance
If you don’t think that the monthly benefit would be adequate to cover your financial obligations, speak to your HR about supplemental cover. Some policies allow employees to purchase individual supplements to the group disability insurance, increasing the monthly benefit limit above that which is offered as standard.
What are the best group disability insurance plans in Canada for 2025?
There are several leading providers of group disability insurance in Canada that offer a range of plans and coverage options for companies and organizations. Usually, these policies can be specifically tailored to cover any needs, although the benefits will largely have to fall under the short-term or long-term group disability insurance policy parameters.
A few of the top plans in Canada include:
- Beneva disability insurance: Offers customizable group plans focusing on income replacement and rehabilitation services.
- Manulife disability insurance: Provides comprehensive group disability coverage with a focus on early intervention and return-to-work programs.
- Canada Life disability insurance: Features group plans with flexible options for short and long-term disability, emphasizing employee support and recovery.
- Sun Life disability insurance: Specializes in group disability plans with tailored solutions and wellness resources, aimed at supporting both physical and mental health.
- IA Financial Group disability insurance: Offers group disability insurance with a range of coverage levels, focusing on personalized support and rehabilitation services.
- Empire Life disability insurance: Provides group coverage emphasizing flexible benefit options and support for maintaining workplace productivity.
- RBC disability insurance: Offers group plans centered on income protection and rehabilitation, with a focus on sustainable return to work strategies.
You can explore the above plans in detail, compare the coverage, and get personalized quotes based on your unique needs right here using our free comparator below.
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How to choose the right group disability insurance coverage?
The first decision that has to be made is whether long-term or short-term coverage is needed and the decision will largely be influenced by the nature of the work undertaken by the employees.
This is because the risks associated with specific jobs carry a higher or lower risk of the eventuality that an individual will be placed on long-term or short-term disability leave. For example, in an office environment, it is unlikely that someone will be placed on long-term leave due to a covered disability, whereas a tree surgeon has a higher likelihood of sustaining an injury that will require long-term rehabilitation.
Additionally, the financial capacity of the company itself has to be taken into consideration as they have to be able to pay for the group disability insurance year after year. Some key considerations when choosing a group disability insurance policy include:
- Risk Assessment: Employers should evaluate the likelihood of long-term versus short-term disabilities within their workforce.
- Financial Implications: The cost of premiums versus the potential benefits payout should be considered.
- Comprehensive Protection: Offering both types of insurance can provide a comprehensive safety net, covering a wide range of potential disabilities.
How much does group disability insurance cost?
Giving an exact figure on the cost of group disability insurance is impossible due to the nature of the policy and the wide variety of organizations that will look for coverage. In addition, each organization will be able to choose between a large array of optional add-ons that will increase or decrease the overall insurance premiums.
Most importantly, however, the group disability insurance cost is largely dependent on the following 4 factors:
- Benefit coverage amount: The benefit relates to how much your employees will receive from the insurance company if they are unable to work. The larger the benefit amount the higher the insurance premium.
- Number of employees: Group benefits usually require mandatory coverage for all employees, although sometimes a plan can be incepted with less.
- Average age of employees: Age is always one of the main factors when it comes to premiums. Group plans often base premiums on the average age of all insured employees.
- Industry and occupational risk faced by employees: The riskier the industry and work undertaken by the insured individuals the higher the premiums. Where underwriters find that the likelihood of a disability incurring increases, then an additional premium waiting will be applied.
Example cost for group coverage
Here's a simplified example table showing estimated group disability insurance costs for different types of groups in Canada. Keep in mind that these are rough estimates and actual costs can vary based on several factors including the insurer, policy specifics, and the group's characteristics.
| Group Type | Number of Members | Average Age | Occupation Type | Average Annual Salary per Member | Estimated Monthly Premium per Member |
|---|---|---|---|---|---|
| Small Business | 10 | 35 | Mixed | $60,000 | $40 - $70 |
| Medium-Sized Company | 50 | 40 | Office-based | $70,000 | $30 - $60 |
| Large Corporation | 200 | 45 | Mixed | $80,000 | $25 - $55 |
| Tech Startup | 30 | 30 | Tech/Office-based | $85,000 | $35 - $65 |
| Construction Company | 75 | 40 | Manual labor | $55,000 | $45 - $80 |
| Educational Institution | 100 | 42 | Mixed | $65,000 | $30 - $60 |
Please note these figures are illustrative and actual premiums will be determined after a detailed assessment by the insurance provider.
We recommend getting individual quotes based on your unique needs to get the exact amount you would be paying. While getting quotes from multiple providers might seem daunting, we've made it simple for you. Use our free tool below and get access to multiple disability insurance plans and quotes in no time.
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Is group disability insurance a taxable benefit?
Receiving group disability insurance benefits is largely a taxable event. However, this rule is not set in stone. Paying tax on disability insurance income is dependent on the entity that pays for the insurance premium in the first place.
When an insurance premium is paid for by a company, then the income the employee receives from the disability insurance provider is regarded as personal income and taxed accordingly.
This is because the group disability insurance premium will be a business expense on which the company receives a tax break. Therefore, the requisite taxes need to be paid by the individual on receipt of the monthly benefit, whenever applicable.
However, some employers provide group disability insurance for their employees but require them to pay for the premiums on their own. In these instances, the employee will have already paid for the premiums, including the taxes on those premiums, and so any subsequent benefits that they receive from the insurance will not be taxed.
Where the group disability insurance premiums are split between the employer and employee, then the employee will only pay tax on any income benefit they receive in the same portion that was paid for by the employer.
Good to know
Read our complete guide "Is disability insurance tax deductible", to get a comprehensive understanding of how taxation works with disability insurance.
How to claim group disability insurance?
Claiming group disability insurance typically involves a couple of steps. The first always requires the individual to submit a completed claim form to the insurance provider's claims department, in addition to providing medical documentation to support the claim.
The company’s claim team will then review your claim against the insurance policy’s terms and conditions to ensure that the health condition in question is covered. If it is, then the insurance provider will approve the claim and the insured will start receiving the disability insurance benefits once the elimination period has passed, if any.
If a claim is declined, the claimant will receive a rejection letter in addition to steps they can take should they wish to appeal the outcome.
Throughout the entirety of the claim process, the claimant must stay in contact with their claim administrator to ensure that the claim is progressing in a timely fashion and so that they know to provide additional information if any is requested.
Group Disability Insurance Claim Deadlines
All disability insurance policies have a submission deadline from the disability date within which a claim must be submitted. If a claim is submitted outside of this window, the claim will be rejected.
