Chartered Professional Accountants of Ontario
Manulife Financial

Getting the Best Disability Protection:
How Group Disability Plans Work With
CPA Select Income Protection Insurance


What happens to my employee (company-sponsored) group disability coverage if I become self-employed?
Generally speaking, your employee group disability coverage is not portable; it will cease when you are no longer an employee, leaving you uninsured. And if you become uninsured in your later years, you may not qualify for individual disability coverage at that time due to your age or deteriorating health. If you purchase coverage under the CPA Select Income Protection Insurance Plan while you are still employed, on the other hand, you can take this coverage with you when you open your own business – and keep it even if your health changes.

My employee group disability plan doesn't cover enough of my income. How can I get more?
Many employee plans cover only 50% to 60% of your salary. Most ”cap” maximum benefit amounts (benefit payments) at levels as low as $5,000 a month. Many don't cover your bonuses, profit-sharing or dividends. And if your employer is paying the premiums, what benefits you do receive will be taxable as regular income. By enrolling in CPA Select Income Protection Insurance, you may qualify for benefits as high as $15,000 per month (depending on the benefits paid by your employee group disability plan). And the monthly benefits you receive are tax-free as long as you pay the premiums yourself.

How can I make sure my disability coverage keeps pace with my income?
If you are building a successful career and have not yet reached your full earnings potential, CPA Select Income Protection Insurance offers a special Future Insurability Option. This option gives you the opportunity to increase your disability coverage, regardless of health, as your earnings increase in the future.

Will I still get disability benefits if my disability leaves me able to work in a profession other than that of a Member?
Under most employee group disability plans, you will only be eligible to continue to receive benefits after a certain period of time (usually two years), if you are unable to work in any profession whatsoever, including manual or menial labour. CPA Select Income Protection Insurance offers an Own Occupation Option. Under this Option, you are considered disabled – and will qualify for benefit payments – if you are unable to work as a Member.

Are disability benefits taxable or non-taxable?
It depends. If your employer currently pays for your coverage under your employee plans, any benefits actually paid to you during a disability leave will be taxable as income (under current tax rules). By paying for your own coverage under CPA Select, you can select the “additional” coverage level you want and need – and any benefits you receive would be tax-free income. That’s an important feature at a time when you could find yourself facing additional disability-related expenses.

What if my employee plan is mandatory? Can I “top up” or “offset” my existing disability coverage using CPA Select? Will I be paying double?
If your existing insurance is less than what you’re eligible for based on your earnings, you can ”top up” your coverage. Essentially, you can buy (and pay for) coverage equal to the difference between (1) the benefit provided by your current plan and (2) the additional amounts available through CPA Select Income Protection Insurance.

The “offset” option under CPA Select Income Protection Insurance Plan gives you more protection than the top-up option provides. In this case, you can purchase the maximum level of coverage available based on your income. While this coverage is available at extremely competitive rates, any benefits payable from the plan may – depending on your pre-disability income – be “offset” (i.e., reduced) by payments you receive from your employer’s group plan.

This offset option will be of particular interest if you are worried about the quality of your current group disability coverage – or you want to ensure that you have meaningful coverage in place if and when you leave your current employer. Even if you currently pay for coverage under your employee plan, you may find that CPA Select offers you some key financial features that you don’t currently have access to. Does your employee plan provide an Own Occupation definition or inflation protection? Does it cover salary only? Does it have a low benefit maximum that will leave you with uninsured income?

Paying for the key protection features available with CPA Select Income Protection is a cost-effective way to ensure you have an income replacement program in place that addresses your personal needs and circumstances. For more information, read our discussion page and our case study about group disability offset.