It is prudent for an employee to obtain individual critical illness insurance and/or individual disability insurance. The reason for this is that if the employee’s employment is terminated, their insurance coverage for disability benefits (assuming they have coverage through their employment) will end at the end of the statutory notice period which is at most 8 weeks depending upon whether the employer is provincially or federally regulated.
The insurance company’s policy will typically only provide coverage for disability benefits for the statutory notice period. Therefore, even if the employer wanted to extend coverage for disability benefits throughout the common law notice period, the employer is usually unable to do so.
When a settlement is reached, the employee will be required to sign a Full and Final Release which includes a release of all claims for disability benefits. If the employee obtains their own individual insurance for critical illness and/or disability, they will have ensured that they have income replacement protection in the event they become disabled after termination. The employee should get this coverage(s) in place when they are young because as a person ages, there is a greater likelihood that they will have suffered illnesses and/or injuries that may affect their eligibility for these two types of coverages.