April 2026 - Dusting Off Your Disability Policy

Key features of note: 

✓     Design a policy that protects what matters most to you

✓     Understand what makes your benefit taxable or tax‑free

✓     Ensure the right definitions and coverage amounts are included

✓     ​​​​Review your coverage to confirm it still aligns with your goals

Your Disability Coverage Might Not Do What You Think It Does

For many professionals, disability insurance is something that was set up years ago, often by whoever set up a booth at graduation or in the early days of practice. Afterwards, it was quietly filed away.

Out of sight.

Out of mind.

But while your policy hasn’t changed, your life certainly has.

Your income has changed.

You may have incorporated.

You might have more savings.

You may have dependents. 

Your financial life may have become more complex.

Yet your disability coverage has remained the same.

What Are You Actually Protecting?

Disability insurance is often framed as “income replacement.”

But for busy professionals, it is much more than that.

You are protecting:

• Your personal lifestyle

• Your ability to continue saving and investing

• Your corporate and practice strategy

• The long-term trajectory of your wealth

Without proper structuring, a disability does not just reduce income, it can disrupt everything you’ve built for you or your family.

Personal vs. Corporate

One of the first things to revisit is ownership.

Personally Owned Policies

For most professionals, this remains the foundation.

• Benefits are tax-free

• Definitions of disability are typically stronger

• Greater simplicity at claim time 

Yes, premiums are paid personally, but the tax-free benefit is what truly matters when it counts.

Corporate-Owned Policies

These can play a role—but require careful structuring.

• Premiums paid with corporate dollars

• Benefits become taxable

• Often used selectively as part of a broader strategy 

It is not about choosing one or the other, it is about ensuring your structure aligns with your overall wealth plan.

“Own Occupation” Matters…A Lot

Not all policies are created equal.

A true own occupation definition ensures:

• You are covered if you cannot perform your specific professional role

• You can pursue other work and still receive benefits 

For a medical professional, this is critical.

This is often one of the most important (and most misunderstood) elements of a policy.

Do The Coverage Amounts Reflect Reality

A common issue we see is this:

Disability policies are designed around your income at a specific point in time. The problem is, for many professionals, that point in time is years behind where they are today.

Key areas to review:

• Current income vs. insured income

• Future increase options (FIOs)

• Corporate retained earnings

• Lifestyle expectations

• Do you still require disability coverage? (Shhhhh, don’t tell the insurance companies we said that.)

Tax Integration

This is where proper planning makes a real difference.

Disability insurance interacts with:

• Personal tax rates

• Corporate structures

• Dividend vs. salary strategies

• Long-term planning 

A poorly structured plan can lead to:​

• Tax inefficiency

• Cash-flow mismatches

• Disruption to your broader strategy 

A well-structured plan enhances after-tax outcomes and is thoughtfully integrated into a great financial plan.

Other Considerations

Is there business overhead coverage in place, and does it still make sense to own?

Does your personal plan integrate with a group or association plan?

Are you just paying too much for the benefit you are receiving?

When Was the Last Time You Reviewed It?

If you’re like most professionals, it has been a while.

A proper review should happen:

• Every 2–3 years

• When income or dividend strategies change

• After incorporating

• As your financial planning and strategy evolves 

If you’re at a stage where you need to dust off your current coverage to ensure it aligns with your current financial reality, we are happy to help.

The information contained in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information continues to be accurate at a future date. No one should act upon such information without appropriate professional advice after a thorough examination of their particular situation.