Integration of Benefits

In the context of Disability Insurance, Integration of Benefits refers to the process of coordinating the disability benefits received from multiple sources, such as employer-sponsored plans, government programs (e.g., CPP Disability Benefits in Canada), or private disability insurance. The aim is to ensure that the total benefits do not exceed a specified percentage of the insured’s pre-disability income, thereby avoiding overcompensation.

Key aspects of Integration of Benefits include:

• Benefit Coordination: Combines benefits from various sources.
• Income Replacement Limit: Typically capped at a percentage of pre-disability earnings (e.g., 70-85%).
• Policy-Specific Rules: Insurers outline how other benefits impact the disability benefit amount.

Integration ensures fair benefit distribution while maintaining income incentives for returning to work when possible.