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Long-term disability insurance ensures your financial security while you’re off work for a significant period of time. But did you know that many Canadian insurance companies offer long-term disability insurance? How do you know which one is right for you?
In this post, we take a deep dive into RBC disability insurance policies. We examine the variety of products and their advantages and drawbacks. In the end, you will know which disability benefit is right for you.
About RBC Insurance
RBC Insurance forms the insurance arm of the Royal Bank of Canada, the largest bank in Canada. It offers a full suite of insurance solutions for individuals, including:
- Term and whole life insurance
- Critical illness insurance
- Home and auto insurance
- Travel insurance
- Credit insurance
- Segregated funds
- Payout annuities
Besides individuals, RBC Insurance also serves businesses with group coverage that encompasses life insurance coverage, short-term and long-term disability insurance, and health and dental coverage. Small business owners can also protect their businesses with key person, business overhead, and buy-sell insurance.
Key facts about RBC Insurance
AM Best Rating: A
Head office: 6880 Financial Dr. Suite 200, Mississauga, ON, L5N 7Y5
Website: https://www.rbcinsurance.com
Contact phone number: 1-800-768-2568
What Disability Insurance Plans Does RBC Insurance Offer?
RBC Insurance has the most diverse lineup of disability insurance policies in Canada. Whether you’re newly self-employed, looking to top-up your group disability benefits, have health issues, are working part-time, want to avoid the medical exam, or are in another unique situation, you’ll find a disability insurance plan that fits your need.
Professional Series
RBC’s best disability insurance product provides the most comprehensive coverage with many benefits built-in. For example, residual and partial disability insurance benefits are built-in, so you don’t have to pay extra for a rider like you would with other products. The target demographic is high-income earners like doctors, lawyers, consultants, and executives in a corporate setting.
- Pros:
- As a non-cancellable policy, RBC Insurance cannot unilaterally increase your premiums or modify or cancel your coverage.
- Provides the highest monthly benefit with the best built-in features.
- A generous cost-of-living adjustment rider that indexes your monthly benefit by up to 10%, which is vital in a high inflationary environment.
- Discounts of up to 25% for medical students, medical residents, and students of select professional disciplines.
- 20% discounts for select professionals who have three years of experience and earned $100,000 in the last two years.
- Cons:
- Only available for occupation classes 4A, 3A, and 2A.
- Does not have the return of premium rider.
- A lengthier underwriting process may include income verification, medical exam, and reports from your family doctor.
Foundation Series
If you need more budget-friendly disability insurance coverage, look no further than the Foundation Series. With a modular design, you get lower-cost coverage with the option of adding riders to upgrade your disability policy. This product is more suitable for small business owners, employees, blue-collar workers, farmers, and the middle-income market.
- Pros:
- Affordable coverage for someone who doesn't need all the bells and whistles of the Professional Series.
- Available for a wide range of occupation classes, including 4A, 3A, 2A, A, and B.
- A non-cancellable disability insurance policy that gives you peace of mind that you are in complete control of your coverage.
- The long-term care conversion option allows you to convert your disability benefits to a long-term care policy upon retirement.
- Cons:
- Does not have the own occupation rider.
- A strict underwriting process may cause delays and result in unexpected declines and postponements.
- Although it has the partial disability benefits rider, it doesn't offer the residual disability rider.
Fundamental Series
For people who can’t qualify for the two non-cancellable plans, this may be their only way to obtain disability coverage. This would include actors, artists, athletes, authors, pilots, flight attendants, armed forces members, and manual labourers with hazardous duties. Because you can buy injury and illness coverage separately, people with pre-existing medical conditions can still get injury-only coverage.
- Pros:
- All types of occupations qualify for disability benefits.
- You can still get injury coverage even if you have a pre-existing condition.
- Simplified application speeds up the underwriting process.
- Cons:
- Although a guaranteed renewable contract means RBC Insurance can't cancel your policy, it can increase the premiums.
- It has more exclusions and limitations like mental disorders, soft tissue injuries, and injuries sustained while travelling.
- Lower monthly benefit amount limits the appeal for high-income earners.
Bridge Series
This is also tailored to small business owners and the middle-income market. Although it has more limitations and fewer guarantees, getting approval is easier, especially if you’re buying less than $3,000 in monthly benefits and don’t have proof of income.
- Pros:
- Greater flexibility in underwriting means an easier approval process.
- Limitations, exclusions, and integration of benefits make it a more affordable product.
- Available for part-time workers (over 20 hours per week) and self-employed individuals with no prior industry experience.
- Cons:
- As a guaranteed renewable policy, RBC Insurance has the right to increase your premiums.
- Proof of earnings is required at claim time, so the monthly benefit is not guaranteed.
- Mental, nervous, psychiatric, or emotional disorders, chronic fatigue syndrome, and strains and sprains are limited to a 24-month benefit period.
Quantum
Quantum is for fee-for-service professionals, consultants, and high-income executives who want a more affordable plan than the Professional Series. Unlike the other products, this one pays you a benefit proportional to your lost income.
- Pros:
- A focus on loss of earnings and integration of benefits results in a lower-cost disability insurance policy.
- No financial evidence is required if you buy less than a $3,000 monthly benefit.
- RBC Insurance will pay the cost of a work assistance program to help you return to a reasonable occupation.
- Cons:
- Proof of earnings is required at claim time, making it more challenging to receive the maximum monthly benefit if your annual income fluctuates.
- Because it is guaranteed renewable, you may have your premiums increase in the future without notice.
- RBC Insurance will integrate your benefits with other sources like CPP, Workers' Compensation, automobile insurance, and group LTD.
RBC Simplified Disability Insurance
Although it is the only disability insurance plan you can buy directly from RBC Insurance, only a small subset of workers should consider this product. For example, seasonal workers, contract workers, and self-employed who have difficulty getting one of the other products.
- Pros:
- No medical exam means fewer delays and a quicker application process.
- Customizable with injury-only coverage or with optional illness coverage.
- Do it yourself entirely online without going through an insurance broker.
- Cons:
- A disability benefit capped at $1,500/month is inadequate as an income replacement for most occupation classes.
- Quite expensive when you calculate the price per unit of monthly benefit.
- A maximum benefit period of two years won't protect you from a permanent or long-term disability.
Here is a table comparing the products side by side:
Professional Series | Foundation Series | Bridge Series | Quantum | Fundamental Series | Simplified Disability Insurance | ||
|---|---|---|---|---|---|---|---|
Target market | High-income professionals and executives | Small business owners, tradespeople, middle-income earners, and farmers | Similar to Foundation Series but with fewer guarantees, newly self-employed | High-income professionals and executives | Self-employed, contract workers, retail workers, construction workers, tradespeople | Self-employed, contract workers, part-time or seasonal workers, those who want simplified underwriting with no medical exam | |
Covers | Injury or illness | Injury only with illness add-on | |||||
Definition of disability | Regular occupation for entire benefit period | Regular occupation for two years (can be extended to the entire benefit period) | Reasonable occupation for entire benefit period | Regular occupation for three years | Regular occupation | ||
Age eligibility | 18-60 | 18-69 | 18-55 | ||||
Occupation classes | 4A, 3A, 2A | 4A, 3A, 2A, A, B | 4A, 3A, 2A | 1, 2, 3, 4, 5, 6 | None | ||
Occupation class upgrades | Yes | N/A | No | ||||
Waiting periods | 30, 60, 90, 120, 180, 365, or 730 days | 0, 30, 90, or 120 days | 60 or 90 days | ||||
Benefit periods | Two, five years, to age 65 | Two, five, 10 years, to age 65 | Two, five years, to age 65 | Two, five years, to age 70 | Two years | ||
Minimum coverage | $450 | $500 | |||||
Maximum coverage | $25,000 | $6,000 | $1,500 | ||||
Medical exam required | Yes, above a certain age and amount | For illness coverage only | No | ||||
Premium guarantee | Guaranteed level rates to age 65 | Not guaranteed | |||||
Expiry | None | Age 75 | Age 65 | ||||
Riders | Family compassionate care, future income option, cost of living benefit, own occupation, retirement protector, accidental death and dismemberment, first day of hospitalization, health care profession | Family compassionate care, future income option, cost of living benefit, regular occupation extension, partial disability, retirement protector, accidental death and dismemberment, first day of hospitalization, health care profession | Family compassionate care, future income option, cost of living benefit, regular occupation extension, partial disability, first day of hospitalization | Family compassionate care, future income option, cost of living benefit, health care profession | Accidental death and dismemberment | None | |
Disability insurance products for businesses
Besides personal disability insurance products, RBC Insurance also has a suite of products for small business owners. These include:
Business overhead expense insurance: Get your business expenses reimbursed for up to two years while you’re totally disabled.
Wage loss replacement plan: As an alternative to group disability coverage, a WLRP provides better coverage and offers guaranteed premiums.
Buy-sell disability insurance: Allows you to buy out your business partner if they become disabled.
Key person disability insurance: Protects your company from the financial loss of a disability of a key employee.
Business loan protector: Covers the monthly payments of your business loans if you become totally disabled.
How Much Does RBC Disability Insurance Cost?
Because RBC Insurance has so many disability insurance plans with different terms, conditions, limitations, exclusions, benefits, and more, the cost varies widely. In general, RBC Simplified Disability Insurance is the most expensive, followed by the Fundamental Series, Professional Series, Quantum, Foundation Series, and Bridge Series, in that order.
However, because of the enhanced disability benefits of the Professional and Foundation Series, these provide better value than the other disability insurance plans.
The cost of RBC long-term disability coverage also depends on your personal factors, including age, gender, smoking status, and occupation. Finally, the plan design also affects the premiums you pay. For example, a longer elimination period, like 365 days, will be more costly than a shorter elimination period, like 90 days. Any optional coverage you add, like the cost-of-living rider, will also increase the premium.
Below is a table showing the monthly premiums for the Professional Series. The sample insured is a non-smoker in a low-risk occupation like a lawyer or doctor. It will pay $5,000 in monthly income after a 90-day elimination period, payable to age 65.
Age | Male | Female |
|---|---|---|
25 | $78 | $125 |
30 | $86 | $159 |
35 | $104 | $194 |
40 | $132 | $225 |
45 | $164 | $251 |
50 | $214 | $283 |
55 | $279 | $332 |
Verdict: Our RBC Disability Insurance Review
So, should you buy an RBC disability insurance policy? In our opinion, RBC Insurance has some of the best disability benefits on the market. Here are the things we like and dislike the most about its disability policies.
- Pros:
- RBC Insurance has a full suite of disability insurance products serving a wide demographic. Therefore, you can be sure to find the income protection plan that fits your need.
- RBC Insurance ranks number one in the disability space with over 40% market share in Canada.
- It has the highest monthly benefit you can buy at $25,000.
- Professionals and small business owners without established earnings can opt for the step rate option which lets you pay less in the first five years of the policy.
- With a 10% year-over-year growth in non-cancellable policies in 2022, it's committed to serving the high-income professional and executive markets.
- It has outstanding claims management and support through its in-house claims team. If you need to claim disability benefits, its return-to-work assistance will help you get the proper care and treatment so you can get back to work sooner.
- Cons:
- Too many options may not be good for the average consumer, who may not know the differences between the plans. As a result, they may buy the lowest-cost product instead of the most suitable one.
- The lack of a return of premium rider means people who want to get their money back if they don't make a claim have to look elsewhere for coverage.
- The own occupation rider is restricted to a few occupation class 4A professionals only.
How Do You Sign Up For RBC Disability Insurance?
Besides RBC Simplified Disability Insurance—for which you can apply online yourself—all the other disability insurance plans require you to work with an insurance brokerage to buy. An experienced insurance broker will assess your personal situation to help you find the right income protection plan, whether with RBC Insurance or another insurance company.
Fortunately, in this day and age, every insurance company has an electronic application. That means 50-page paper application forms are a thing of the past. So if you’re applying for an RBC Insurance disability policy, it shouldn’t take more than 15 minutes with an insurance advisor to complete the application.
After you apply, an underwriter will assess your information, including your health, lifestyle, occupation, and finances. It will either approve your application, modify it with exclusions for pre-existing conditions, or decline disability benefits.
After you’re approved, you will get a login to its online portal. There, you can check the details of your coverage and download a copy of your policy.
Need An RBC Disability Insurance Quote?
Long-term disability insurance coverage is vital to protecting your monthly income. Benefits paid during a claim will cover living expenses so you can maintain your standard of living. By relieving your financial stress, you can focus on what matters most—your health.
If you want to know how much disability insurance costs you, reach out to us at info@briansoinsurance.com or 604-928-1628. Our goal is to match you with the ideal disability insurance policy based on your individual circumstances.
Get Your Disability Insurance Quote Now
While we make every effort to keep our site updated, please be aware that timely information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Brian So Insurance and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser. This post is a brief summary for indicative purposes only. It does not include all terms, conditions, limitations, exclusions, and other provisions of the policies described, some of which may be material to the policy selection. Please refer to the actual policy documents for complete details which can be provided upon request. In case of any discrepancy, the language in the actual policy documents will prevail. A.M. Best financial strength ratings displayed are not a warranty of a company’s financial strength and ability to meet its obligations to policyholders.
1 Comment
27 years ago bought a policy to protect my young family to make sure food was on the table.Now as a senior Canadian citizen after paying RBC 27 years of INS premiums i was involved in a rear end Collison while stopped at a light.I was a ski coach, cyclist, golfer,gardner.farmer and worked 12 hours daily before my injurie reduced my hours to less half of that and took a pay cut.
I was late in my submission for benefits that PROVIDENT/UNUM/ NOW RBC. My claim was denied after waiting 3 months for a response. My criteria was met i am in physio, under doctors care,on meds to sleep, i exercise daily not to seize up. Interesting to find out that these same companies had a class action law suit in the USA 2004. The same time RBC bought these two companies. RBC seemed to side step a multi million judgement against Provident and Unum.I wonder how they managed that? Its seems history is repeating its self in Canada.Being on this earth for 63 years i ve learn to leave things in the past. But being in the present i believe other young unsuspecting families should be made aware of my 27 year+ $50,000cdn lesson taught by RBC I will be happy to place google ad words/use my LinkedIn and Facebook or CBC MARKET PLACE to have these young Canadian know about the lesson from RBC.