Group Long Term Disability vs. Individual Non-Cancelable Disability Insurance
| Important areas to consider | Group | Individual |
| Benefit amount | Based on T4’d salary (excludes bonuses, commissions, shift premiums/overtime, corporate profits), capped at 85% (non-taxable benefit, 80% if taxable) by “All Source Maximum” | Includes all sources of income (bonuses, other contract work, commissions, corporate profits), not capped by “All Source Maximum” |
| Income at claim time | Cannot continue in the event of total disability, otherwise there will be a $ for $ reduction in the LTD benefit payable | Can continue during total/partial disability without impact to benefits received from insurer |
| Definition of disability at claim time | Disability based on 2 year regular occ, then any occ for the remainder of the benefit period | Disability based on regular/own occ for the entire benefit period |
| Definition of disability options | Limited to total disability | Includes total, partial and residual disability |
| Ownership of plan | Owned by the company, you’re the “certificate” holder | Owned by the individual |
| Deductibility of premiums | Employer can deduct premiums | An incorporated business can deduct premiums for individual coverage |
| Premiums | Premiums are not guaranteed. Annually renewed based on demographics and volume of the group | Premiums are guaranteed never to change up to age 65. |
| Contract | Not guaranteed. Annually renewed | Guaranteed never to change, unless requested by owner, up to age 65 |
| Taxability | If employer paid, benefits received are taxable, if employee paid benefits are tax-free | Benefits received are tax-free |
| Flexibility | Limited. Employer chooses plan design for entire group. | Tailored to individual needs with various options (ie. COLA, partial disability, future savings protector, future earnings protection, return of premium) |
| Portability | No. Coverage is lost when insured leaves that employer/association | Yes, fully portable. Stays with owner for life of the contract |
| Waiting Period | Consecutive days of total disability (usually 121 days) | Accumulated days of total/partial disability |
| Benefits offset with other sources | Offset with CPP, Auto Insurance, WSIB, subrogation, child benefits, other association disability coverage | No offsets for 4A and 3A occupational classes. 2A, A, B occupations offset with WSIB and Auto Insurance |