Page 59 - A Canuck's Guide to Financial Literacy 2020

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Non-Cancellable

With non-cancellable policies, the premiums are fixed and won't be increased by the
insurance company. When submitting your claim, there needs to be no proof of income
provided. These type of disability policies are not integrated with other sources of income
such as EI, CPP, individual plans, etc.
Group Disability Insurance

Group Disability Insurance is common with companies who have signed up for disability
insurance to cover a group of people. These types of policies tend to replace the regular
income of group participants if they become disabled due to sickness or injury. If it's a short-
term disability, the benefit is usually equal to 100% of the employee's regular pre-disability
salary. This benefit would be taxable to the employee

Employee Premiums - It's recommended that employees pay 100% of long-term disability
premiums as any benefits that the employee were to receive under the plan, will be tax free.
If the employer pays the premium, the employer would report a taxable benefit to the
employee.

CPP - If the member is receiving disability benefits under the CPP, the group disability
insurance policy would also reduce the policy benefit that the individual would receive under
the plan.

There are several provisions that a life insurance contract has to protect the insured, insurer
and the beneficiary. It could involve policies, clauses or riders. Riders are extra benefits
that a policy holder can add to amend the terms of a basic insurance policy. Riders are
purely optional and aim to help customize the insurance policy to fit one's needs. Below are
common provisions and riders.