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Disability

Disability

Life event3 min readFebruary 11, 2026
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Disability, whether temporary or permanent, can have a major impact on a homeowner's ability to maintain mortgage payments in Quebec. Several protection mechanisms exist to mitigate this risk. Mortgage disability insurance, offered by lenders or purchased individually, is the first line of defence. This insurance typically covers monthly mortgage payments during a period of disability, after a waiting period ranging from 14 to 90 days depending on the policy. At the government level, the Quebec Pension Plan (QPP) offers a disability pension to contributors who meet the medical and contribution criteria. Federally, Employment Insurance sickness benefits provide temporary income replacement for up to 26 weeks. Group insurance plans offered by employers often include short-term disability coverage (typically 17 to 26 weeks) and long-term disability coverage (after the short-term period, up to age 65 in some cases). The Commission des normes, de l'equite, de la sante et de la securite du travail (CNESST) intervenes if the disability results from a workplace accident or occupational disease. For mortgage brokers, it is important to raise awareness among clients about the importance of obtaining adequate disability insurance before a health issue arises, and to know the options available for clients facing unexpected disability.

Disability and Mortgage: Understanding the Risks

According to Canadian insurance industry statistics, approximately one in three people will experience a disability lasting more than 90 days during their career. For Quebec homeowners, this reality underscores the critical importance of planning financial protection in case of inability to work. Disability can be temporary (fracture, surgery, depression) or permanent (degenerative disease, severe accident), and each situation requires a different approach to mortgage management.

Mortgage Disability Insurance: First Line of Defence

Mortgage disability insurance is specifically designed to cover monthly mortgage payments when the borrower is unable to work due to illness or accident. There are two main forms of this protection. Lender group insurance is offered at the time of mortgage signing, and the beneficiary is the financial institution. Individual insurance is purchased separately from a private insurer and generally offers more favourable conditions for the insured.

Waiting period (elimination period)
The time between the start of disability and the first benefit payment. Depending on the policy, this period ranges from 14 to 90 days. A longer waiting period reduces the premium but increases financial risk during the waiting period.

Government Programs in Case of Disability

Several government programs can supplement private insurance in case of disability. The Quebec Pension Plan (QPP), administered by Retraite Quebec, offers a disability pension to contributors under age 65 who meet the medical criteria (severe and prolonged disability) and contribution requirements. In 2025, the maximum QPP disability pension is approximately $1,600 per month. Employment Insurance sickness benefits cover up to 26 weeks at 55% of insurable earnings. The CNESST provides income replacement indemnity at 90% of net income for workplace accidents or occupational diseases.

Mortgage Protection Strategies in Case of Disability

  • Purchase individual disability insurance covering at minimum the monthly mortgage payment amount
  • Build an emergency fund of three to six months of mortgage payments to cover the waiting period
  • Verify the disability coverage offered by your employer's group insurance and fill gaps with individual insurance
  • Ensure your protection mandate designates a mandatary capable of managing the mortgage in case of cognitive disability
  • Set up automatic mortgage payments to avoid any delays at the onset of disability

The Mortgage Broker's Role

The mortgage broker has an important advisory responsibility regarding disability protection. When setting up a mortgage, the broker should systematically address disability insurance and explain the differences between lender coverage and individual insurance. When a client is already in a disability situation, the broker can intervene with the lender to negotiate accommodation measures, assess the possibility of refinancing to reduce monthly payments, or explore other solutions suited to the client's situation. The broker should also emphasize the importance of consulting an insurance advisor for comprehensive and well-tailored coverage.

Frequently Asked Questions

What is mortgage disability insurance?
Mortgage disability insurance is coverage that pays your monthly mortgage payments if you become disabled and unable to work. It can be purchased through the lender (group insurance) or individually from an insurer. Benefits begin after a waiting period (14 to 90 days) and can last 12 to 24 months, depending on the policy.
What government programs help in case of disability in Quebec?
The Quebec Pension Plan (QPP) offers a disability pension to eligible contributors. Fédéral Employment Insurance provides sickness benefits for up to 26 weeks. The CNESST covers disabilities resulting from workplace accidents or occupational diseases. Quebec's social assistance program also offers benefits for people with severe employment constraints.
What is the difference between lender disability insurance and individual insurance?
Lender insurance is group insurance where the beneficiary is the lender. It is not transferable if you switch lenders and premiums may increase with age. Individual insurance is purchased directly by the borrower, the beneficiary is the insured, and it is portable from one lender to another. Individual coverage generally offers a more favourable definition of disability.
Can my lender demand immédiate repayment if I become disabled?
No, the lender cannot demand early repayment of the loan simply because you are disabled. As long as payments are maintained, the mortgage remains in good standing. If you are having difficulty making payments, contact your lender to discuss available accommodation options.
How can a mortgage broker help in case of disability?
The broker can help negotiate a payment deferral or temporary modification of terms with the lender. They can also assess whether refinancing is possible to reduce monthly payments. Proactively, the broker has an advisory role to recommend obtaining disability insurance tailored to the client's needs.

Educational information only. This does not constitute financial advice under the Act Respecting the Distribution of Financial Products and Services (LDPSF). Consult an AMF-certified mortgage broker before making any financial decision.

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