Risk of Disability



COLA Cost of Living Adjustment

CPI Consumer Price Index

CPP Canada Pension Plan

EI Employment Insurance

WC Workers’ Compensation

WCB Workers’ Compensation Board

WSIB Workplace Safety and Insurance Board



Cancellable: means the insurance company can cancel the policy

Commencement Date: the date that disability benefits begin according to the Policy Schedule.

Concurrent Disability: if an injury or illness was caused by more than one occurrence, the policy will treat the disability as if it were caused by one injury or illness. An insurance company will not pay more than one disability benefit to an individual, for the same period of disability.

Conditional: means the insured’s right to renew is subject to certain criteria specified in the contract.

Conditionally Renewable: the insurer cannot decline to renew at the end of the policy’s term because of a decline in the individual’s health.

Consumer Price Index (CPI): an index that measures the rate of inflation over a given period of time for selected goods and services available to the Canadian consumer. Items in the index include food, shelter, clothing, transportation and education costs.

Cost of Living Adjustment (COLA): a provision in some contracts that indexes the benefit payable to the Consumer Price Index.


Disability: a physical or mental impairment caused by an accident of illness that partially or totally limits one’s ability to perform an occupation fro which one is suited by education, training or experience.

Disability Benefits: while the insured is disabled, the insurance company will provide a monthly income.

Disability Income: a benefit in the form of a monthly income provided to the insured by the insurer that compensates the insured for loss of earnings during their time of disability.

Disability Tax Credit: a federal tax credit that can be claimed for a taxpayer who is mentally or physically impaired and makes no claim for expenses for a full-time attendant or care in a nursing home. A taxpayer may also claim the unused portion of the disability tax credit of certain dependants.


Elimination Period: the duration of time that an individual must be disabled before being eligible for benefits under a disability insurance policy. Also called waiting period.

Employer Group Disability Plan: a disability insurance plan providing converge to all employees, or a specific group of employees. The employees pay the premiums as a payroll deduction, or the employer pays the premium and includes it as a taxable employment benefit.

Employment Insurance Benefits: in cases of illness, accident or quarantine, and employee who has paid their Employment Insurance premium is entitled to receive up to 55% of their average weekly pay. Employment Insurance is a second pay or to CPP/QPP, Workers’ Compensation and group plans, so the benefit is reduced dollar for dollar when other resources are available to the insured. Self-employed individuals do not qualify for Employment Insurance compensation.


Government Disability Plans: the disability provisions of the Canada Pension Plan, Quebec Pension Plan, Employment Insurance and Workers’ Compensation.

Guaranteed Insurability: this is a provision that allows the insured to buy additional insurance at certain specified future dates without proof of insurability.

Guaranteed-Issue: a form of whole life policy bought through the mail with no medical screening. Marketing is generally aimed at people in the 50 to 70 years age range who are concerned about passing the medical screening exam. The face value of Guarantee-Issue policies then to be very low which may be suitable for those who only want life insurance to cover their funeral expenses.

Guaranteed Renewable: the renewability is guaranteed for or to a specific age, as ling as the insured is employed. The insured has the right to renew the policy and continue the coverage at the end of the term. This right of renewal ends at a specific age, which might be age 65 or 70. However, the insurance continues only if the individual is still working, so age 65 or 70 is usually not a problem. The insurer cannot cancel or decline to renew the policy. Also called guaranteed continuable


Individual Policies: those available directly from an insurance company.

Injury: means an accidental bodily injury occurring while this policy is in force.

Insurable: able to meet the conditions of health established by the insurance company, which usually involves a medical examination.

Insured: the person who makes a contract with an insurer. This clause is interpreted to mean that it is the person who makes the contract with the insurer who is the insured (i.e., the owner). If the owner takes out a policy on life of a third party, it is the owner who is the insured, not the person whose life is insured. Therefore, it is the owner who can exercise all the rights of an insured person under the Act regardless of whose life is insured.


Non-cancellable: means that the insurance company cannot cancel coverage for the specified term of the policy.

Non-traditional Disability Insurance: provides protection to classes of occupations that would otherwise be uninsurable or insurable at an inflated cost. It is designed to covet a wide range of occupations, including those in high-risk categories.


Own Occupation: the occupation or occupations in which an insured is regularly engaged at the time of becoming disabled.


Partial Disability: based upon time and means that due to injuries or sickness, the insured is unable to perform either the important duties of one’s occupation at least one-half of the time usually required; or one or more important duties of your occupation. The insured must also be under the care of a physician.

Peril: the actual cause of loss (e.g., fire, accident or illness).

Premium: the single or periodical payment under a contract for insurance, and include dues, assessments, administration fees paid for the administration or servicing of such contract, and other considerations.

Presumptive Clause: a clause that is in many disability insurance contracts and presumes total disability if, through sickness or accident, their is a complete and irrevocable loss of speech, hearing, sight or the loss of use of two limbs.

Principlе of Indemnification: insurance can restore the victim of a loss to her original financial condition, but the insured cannot profit from the loss.

Prior Monthly Income: the monthly income earned by the insured prior to a disability occurring.


Recurrent Disability: after a period of disability ends, if the insured becomes disabled again from the same or related causes, the insurer will consider the disability a continuation of the prior period. This is one for the purpose of determining the commencement period and maximum benefit period for the insured.

Reinstatement: if the policy lapses because the premium is not paid when due or within the grace period it will be reinstated if the insurance company accepts payment of the premium without requiring a reinstatement application.

Residual Disability: based upon loss of earnings and means that due to injuries or sickness, the insured has a loss of monthly income of at least 20%. The insured must also be under the care and attendance of a physician.


Step-rated: a modified form of level premium, where the initial premium level is low and increases at specified times until it reaches a stated maximum.


Term: the period of time that the insurance policy is in force. The term can range from one year to an entire lifetime.

Total Disability: being unable to work at any occupation for wage or profit, and for which the insured is qualified by reason of education, training or experience.


Uninsurable: an individual can be uninsurable if her situation is such that due to any factor including a medical condition, occupation or employment situation, she is unable to meet the conditions for acceptance of her application fro disability insurance.


Waiting Period: see Еlimination period.

Waiver of Premium Provision: a term of the policy under which the insurer relinquishes the right to the receipt of payment of the premium in the event the insured becomes totally or partially disabled.

Workers’ Compensation: insurance offered by the provincial governments that provides coverage to employees for injuries sustained while performing the duties of their normal occupation.

Workers’ Compensation Offset: a reduction in benefits under an individual or group disability insurance plan due to the insured’s eligibility to receive Workers’ Compensation benefits