Disability insurance serves as a financial safeguard designed to provide income replacement if a sudden, unexpected illness or injury prevents you from working. Though recipients don’t receive their full salary, wage replacement benefits typically cover between 50% and 90% of income, providing some financial relief following a health incident. Understanding the types of disability insurance available in BC is crucial to avoid a denial when submitting a claim, as types offer different benefits based on your employment status and the nature of your disability.
Short-Term Disability Insurance
Short-term disability insurance temporarily provides financial support to those unable to work due to illness or injury. Employees on their employer’s benefit plan are typically eligible to collect these benefits for a limited time after sustaining a disabling injury or illness. Coverages replace anywhere from 50% to 75% of regular income for up to six months.
If you don’t have a short-term disability policy through your employer, you may be able to collect Employment Insurance (EI) sickness benefits instead.
Employment Insurance (EI) Sickness Benefits
EI sickness benefits offer temporary income for employees unable to work due to an ailment or condition but who don’t have access to employer-provided disability coverage. Qualified workers must have at least 600 hours of insured employment within the past 52 weeks before they become disabled or since their last claim. Pay recovery benefits last for up to 15 weeks and amount to 55% of an average weekly paycheck, not exceeding a maximum of $650 per week.
WorkSafeBC
WorkSafeBC is the province’s worker’s compensation program, which provides income assistance to workers who are injured or become ill due to a work-related incident. All employers are mandated to have this coverage for employees. Recipients earn about 90% of a normal day’s pay up to a maximum annual net earning of $116,700. These benefits continue until the recipient can return to work or reaches retirement age (if they are permanently disabled).
Critical Illness Insurance
Critical illness insurance is a private insurance policy that provides a lump-sum payment to covered parties after being diagnosed with a serious health condition, such as cancer, heart attack, or stroke. Payouts depend entirely on the conditions set within the policy and can range from $25,000 to $1 million.
Long Term Disability Insurance
Long term disability insurance kicks in for qualified individuals after short-term disability, EI sickness benefits, or employer-paid sick leave are exhausted. It provides ongoing financial support to individuals unable to work due to long term or permanent disability. Long term disability plans generally replace between 60% to 85% of your regular income. These benefits can last for several years, either until you’re able to return to work or reach retirement age.
Canada Pension Plan (CPP) Disability Benefits
CPP benefits are available to individuals who have contributed to the Canada Pension Plan and are unable to work any job due to a severe and prolonged disability. Canadians under 65 who have made contributions to CPP before the time of disability are eligible for benefits. The average monthly payment is about $1,160, with a maximum of $1,538. Disability payments continue until the recipient can return to work or reaches age 65, at which point the benefits convert to regular CPP retirement benefits.
When to Contact a Lawyer
Unfortunately, insurance claims for disability aren’t always accepted, even if you have a valid condition. If you were denied disability benefits, it’s important to speak with a lawyer. Stephens & Holman can help you dispute by submitting an appeal. Reach out today for your free consultation.