The Importance of Disability Insurance

Katherine Martin • March 28, 2016

It took a journey back into the archives to find this little beauty of a video by Canadian finance expert Preet Banerjee.


Before giving Ted Talks, or appearing regularly on CBC Marketplace, or any of the other countless things Preet has done, he had some smart things to say about disability insurance. Certainly worth a watch!

If you are in the process of buying a home and/or thinking about protecting yourself,  feel free to contact me anytime! I will make sure you are well taken care of. 

Transcript

Hi everyone, my name is Preet Banerjee, and today we’re going to talk about disability insurance. But before we get started, I wanted to share some other feedback that I received from the first video blog entry. Essentially I was told, do not wear just a black t-shirt, do not call it Mostly Money Mostly Canadian, and try not to be such a tight ass.

Okay, so what’s the deal with disability insurance? You insure your house, you insure your car, and might even injure every single out electronic gadget that you own. But what about your single biggest asset; your ability to earning income for the rest of your life.

Let’s put that into context: Assume a university graduate starts their working career earning forty five thousand dollars per year, assuming raises and promotions over time, perhaps their salary grows by 4% per year. Over 40 year career, that translates into over 4.25 million dollars. Overtime part of that is slowly converted into tangible assets and investments. While you are younger your future potential earnings is your biggest asset. How well-protected is that asset?

For example, life insurance protects your family’s lifestyle if you die. Clearly your income stops but a lump sum death benefit is there to provide for your family. When you die, you don’t want your spouse or the rest of your family to be burdened unnecessarily if you can avoid it.  So perhaps, that lump sum benefit can be used to pay off the mortgage, help with the bills that need to be paid, maybe it’s for education for the kids. But what happens if you don’t die? What happens if you become sick or injured and don’t have an income anymore? Your family is not going to get that life insurance lump-sum death benefit and remember to collect that lump sum death benefit you have to be dead, so that’s off the table. You’re alive, you’re just unable to work, what do you do?

Unfortunately the sad realization for many families is, they might have been better off if they had indeed died. Because they’re still alive but they don’t have an income and they still have all those bills to pay. The mortgage still needs to be paid, other bills around the house all still need to be paid, and quite frankly depending on your injury or sickness you might need to afford special assistant devices. What could end up happening is a downsizing of your lifestyle, or quite frankly you can go broke.

According to Canada Life you have a 1 in 3 chance at becoming disabled for more than 90 days before the age of 65 and the average length disability that last more than 90 days is 2.9 years.

Ask yourself this question: Could your finances survive 2.9 years of no income? Now if you have a benefit plan at work that provides for disability insurance coverage, make sure that you take a look at that book and see exactly what that coverage is. Some benefit plans only pay for five years, others pay until you turn 65. The percentage of income that’s replaced also varies, so dig out that employee handbook and look it up and see how much coverage you actually have. If you find that you don’t have enough or as much as you would like, talk to an insurance agent. They can create a pop-up plan that would piggyback onto your existing coverage. And if you have no disability insurance whatsoever, run (safely) don’t walk to your insurance agent to talk about what your options are. 

Simply talking to an insurance agent doesn’t mean you have to sign up for a policy but I promise you one of the biggest mistake people make is not having disability insurance coverage.

Now, you should be prepared for some sticker shock, disability insurance policy’s don’t tend to be the cheapest insurance policies but remember the asset that you’re protecting is potentially one is your single biggest asset, so it would only make sense that it would cost more. a typical insurance policy for disability coverage might be a hundred dollars a month, it could be a little bit less and could be substantially more. It really depends on the type of work you do, and your health situation as well as other factors that you’re agent can talk to you about. Remember, always seek the advice of a qualified professional for your own situation. These are just general tips to bring you up to speed on that very basics.

Well that’s it for this video, I hope you have a better understanding now of disability insurance coverage. My name’s Preet Banerjee, don’t forget to subscribe to my YouTube channel for more money tips.

Katherine Martin


Origin Mortgages

Phone: 1-604-454-0843
Email: kmartin@planmymortgage.ca
Fax: 1-604-454-0842


RECENT POSTS

Tips to Pay Off Your Mortgage Early

By Katherine Martin • January 21, 2026
Owning a home feels great—carrying a large mortgage, not so much. The good news? With the right strategies, you can shorten your amortization, save thousands in interest, and become mortgage-free sooner than you think. Here are four proven ways to make it happen: 1. Switch to Accelerated Payments One of the simplest ways to reduce your mortgage faster is by moving from monthly payments to accelerated bi-weekly payments . Instead of 12 monthly payments a year, you’ll make 26 half-payments. That works out to the equivalent of one extra monthly payment each year, shaving years off your mortgage—often without you noticing much difference in your budget. 2. Increase Your Regular Payments Most mortgages allow you to boost your regular payment by 10–25%. Some even let you double up payments occasionally. Every extra dollar goes directly toward your principal, which means less interest and faster progress toward paying off your balance. 3. Make Lump-Sum Payments Depending on your lender, you may be able to make lump-sum payments of 10–25% of your original mortgage balance each year. This option is ideal if you receive a bonus, inheritance, or other windfall. Applying a lump sum directly to your principal immediately reduces the interest charged for the rest of your term. 4. Review Your Mortgage Annually It’s easy to put your mortgage on auto-pilot, but a yearly review keeps you in control. By sitting down with an independent mortgage professional, you can check if refinancing, restructuring, or adjusting terms could save you money. A quick annual review helps ensure your mortgage is always working for you—not against you. The Bottom Line Paying off your mortgage early doesn’t require a massive lifestyle change—it’s about making smart, consistent choices. Whether it’s accelerated payments, lump sums, or regular reviews, every step you take helps reduce your debt faster. If you’d like to explore strategies tailored to your situation—or want a free annual mortgage review—let’s connect. I’d be happy to help you find the fastest path to mortgage freedom.

Fixed vs. Variable Mortgage Rates in Canada

By Katherine Martin • January 14, 2026
Fixed vs. Variable Rate Mortgages: Which One Fits Your Life? Whether you’re buying your first home, refinancing your current mortgage, or approaching renewal, one big decision stands in your way: fixed or variable rate? It’s a question many homeowners wrestle with—and the right answer depends on your goals, lifestyle, and risk tolerance. Let’s break down the key differences so you can move forward with confidence. Fixed Rate: Stability & Predictability A fixed-rate mortgage offers one major advantage: peace of mind . Your interest rate stays the same for the entire term—usually five years—regardless of what happens in the broader economy. Pros: Your monthly payment never changes during the term. Ideal if you value budgeting certainty. Shields you from rate increases. Cons: Fixed rates are usually higher than variable rates at the outset. Penalties for breaking your mortgage early can be steep , thanks to something called the Interest Rate Differential (IRD) —a complex and often costly formula used by lenders. In fact, IRD penalties have been known to reach up to 4.5% of your mortgage balance in some cases. That’s a lot to pay if you need to move, refinance, or restructure your mortgage before the end of your term. Variable Rate: Flexibility & Potential Savings With a variable-rate mortgage , your interest rate moves with the market—specifically, it adjusts based on changes to the lender’s prime rate. For example, if your mortgage is set at Prime minus 0.50% and prime is 6.00% , your rate would be 5.50% . If prime increases or decreases, your mortgage rate will change too. Pros: Typically starts out lower than a fixed rate. Penalties are simpler and smaller —usually just three months’ interest (often 2–2.5 mortgage payments). Historically, many Canadians have paid less overall interest with a variable mortgage. Cons: Your payment could increase if rates rise. Not ideal if rate fluctuations keep you up at night. The Penalty Factor: Why It Matters More Than You Think One of the biggest surprises for homeowners is the cost of breaking a mortgage early —something nearly 6 out of 10 Canadians do before their term ends. Fixed Rate = Unpredictable, potentially high penalty (IRD) Variable Rate = Predictable, usually lower penalty (3 months’ interest) Even if you don’t plan to break your mortgage, life happens—career changes, family needs, or new opportunities could shift your path. So, Which One is Best? There’s no one-size-fits-all answer. A fixed rate might be perfect for someone who wants stable budgeting and plans to stay put for years. A variable rate might work better for someone who’s financially flexible and open to market changes—or who may need to exit their mortgage early. Ultimately, the best mortgage is the one that fits your goals and your reality —not just what the bank recommends. Let's Find the Right Fit Choosing between fixed and variable isn’t just about numbers—it’s about understanding your needs, your future plans, and how much financial flexibility you want. Let’s sit down and walk through your options together. I’ll help you make an informed, confident choice—no guesswork required.
© 2026 

Katherine Martin. All Rights Reserved.