Long Term Disability Insurance

Long Term Disability (LTD) insurance, also known as disability insurance and disability income insurance, acts as a safety device for an individual who becomes incapable of working as a result of illness or injury. LTD insurance plays an essential role for most employees in Canada as it serves as a source of replacement income for an employee with disabilities.

LTD benefits can be provided as an added feature of a group plan offered by an employer, as an individual plan, or as a government disability plan, offered either through the Canada Pension Plan or Quebec Pension Plan. Almost all plans offer benefits that will pay benefits on a monthly basis to individuals no longer capable of carrying out job duties.

What Is Long Term Disability Insurance?

Long Term Disability Insurance is a disability plan that will replace your income should you be unable to work due to illness or injury. Unlike short-term disability benefits, LTD benefits will be paid for an extended period, for several years and sometimes until age 65, depending on your disability plan. Typically, STD benefits will be paid for several months.

LTD insurance should provide income replacement benefits ranging from 60% to 85% of your current income, once your waiting period ends. The benefits should start after your sick leave or short-term disability benefits expire.

Some common conditions that may be eligible for LTD benefits include:

• Chronic Pain,
• Mental health issues (depression, anxiety disorders),
• Physical injuries caused as a result of accidents, like car accidents,
• Chronic conditions like autoimmune disorders and neurological problems,
• Long-term disability insurance can assist with maintaining financial stability should an individual be unable to work for an extended period of time.

How Long Term Disability Insurance Works

Coverage Begins After the Waiting Period.

Most LTD plans include a waiting or elimination period, usually 90–180 days, before benefits become payable. During this time, workers may rely on short-term disability, employment insurance, or workplace sick leave.

Monthly Payments Are Issued

If approved, the insurance company issues a monthly benefit designed to replace a portion of lost income. These payments continue as long as the individual meets the policy’s definition of disability.

Regular Medical Updates May Be Required

Insurance companies often ask for ongoing medical information to confirm that the person remains totally disabled or otherwise meets the LTD policy criteria.

Offsetting Programs May Apply

LTD benefits may be reduced if the person receives income from CPP Disability, QPP, workers’ compensation, or other government disability programs.

Definition of “Disability” Under an LTD Policy

An integral aspect of an LTD benefits claim is the definition of “disability” within an insurance policy. These definitions differ among carriers, but generally, there are two levels of disability in most LTD policies: own occupation and any occupation.

1. Own Occupation Definition

During the initial stage of LTD benefits, within usually the first 24 months, an individual will be seen as disabled if they cannot engage effectively in their occupation.

For instance, if an individual experiences mental illness, pain, or injuries that make it difficult for them to undertake specific duties within their occupation and make it hard for them to work, they can be eligible for LTD benefits.

2. Any Occupation Definition

Once the “own occupation” period passes, benefits are often subject to an “any occupation” definition, and it becomes necessary for the applicant to demonstrate that they are not capable of engaging in any occupation for which they are suited based on education and experience.

Examples of Medical Conditions That May Qualify:

• Severe chronic pain disorders
• Back and spinal injuries
• Mental health conditions
• Autoimmune illnesses
• Traumatic injuries from a car accident
• Long-term neurological conditions

Because insurance companies often interpret these definitions narrowly, claims may be denied if the insurer believes a person can still work in some capacity, even if doing so is unrealistic or unsafe.

Types of Disabilities Covered

A long-term disability plan normally covers various illnesses, injuries, and health problems that make it difficult for an employee to carry out his/her vital duties at work.

Although various plans differ with regards to benefits and with service-providing insurance companies, it can be asserted that most LTD plans address visible as well as invisible disabilities.

Common types of disabilities covered under LTD insurance include:

Physical Injuries & Trauma: fractures, back or spinal injuries, chronic pain, and injuries from car or workplace accidents.

Chronic Illnesses: autoimmune diseases, neurological disorders, cardiovascular conditions, and cancer.

Mental Health Conditions: depression, anxiety, PTSD, bipolar disorder.

Progressive or Long-Term Conditions: degenerative diseases and conditions affecting mobility, strength, or cognition.

LTD plans may also consider pre-existing conditions, depending on coverage dates and specific policy provisions.

Why Long-Term Disability Coverage Matters

Long-term disability insurance benefits are necessary due to their role in offering financial support to an employee should they be considered totally disabled and unable to work.

A considerable number of individuals would find it extremely difficult to make financial ends meet were it not for LTD benefits, particularly with expensive medical procedures.

LTD benefits are important because:

• It helps maintain financial stability.
• Reduces dependence on short-term benefits such as sick leave or short-term disability benefits.
• Assists people with conditions that make it difficult for them to work for an extended period.
• Offers critical security benefits in instances whereby government benefits, like CPP Disability Benefits or Employment Insurance, are inadequate alone.

LTD insurance can be an essential safety net for Canadians who want to concentrate on recovery without compromising their standard of living.

Eligibility Criteria

Whether an applicant will be eligible for disability benefits varies based on the terms and conditions outlined within the disability plan. However, most disability carriers will require the following:

1. Medical Proof of Disability

You will have to furnish medical evidence, such as an attending physician’s note, diagnostics, and medical records, demonstrating that your illness or injury renders you unfit for your essential job responsibilities.

2. Completion of Waiting/Elimination Period

LTD benefits usually start after a waiting period, usually 90-180 days, and before that, employees can fall back on short-term disability benefits and sick leave.

3. Inability to Work in Your Own or Any Occupation

Policies have varying definitions for disability:

• First, you have to be unable to work at your own occupation.
• Later, you might have to demonstrate that you are unable to support yourself in any job for which you are reasonably qualified.

4. Compliance with Treatment

It usually becomes necessary for claimants to adhere to proper medical procedures so as not to forfeit LTD benefits.

5. Submission of Required Forms

You are required to:

• Claim forms
• Medical information
• Employment statements
• Proof of Insurance Coverage

Timely production of documents will help prevent delay or denial of claims.

What to Look for When Choosing a Plan

While choosing a long-term disability insurance plan, it is vital to learn about what is covered under a plan and what limitations there might be. Various factors that are considered are as follows:

1. Definition of Disability

Whether your plan uses an own occupation or any occupation definition may have a big impact on whether you are eligible for benefits.

2. Benefit Amount and Duration

Look Closely At:

• The maximum amount payable,
• How long you can receive payments,
• Whether benefits will continue beyond age 65.

3. Waiting Period

Make sure you are aware of when your coverage commences and how long before your benefits start being payable.

4. Exclusions and Limitations

Policies include limitations on benefits for:

• Conditions,
• Mental health problems,
• Chronic Pain,
• Pre-existing Conditions,
• Conditions which exist for a short term.

5. Interaction with Other Programs

Your LTD benefits may be reduced if you receive:

• CPP Disability,
• QPP,
• Workers’ compensation,
• Employment Insurance.

6. Cost and Employer Contributions

Make sure you review whether it will be paid for by your employer or if you have to pay for it.

It will make sure your disability insurance plan will be there for your financial security at a time when you most need it.

Seek Legal Assistance of a Disability Lawyer at Grillo Law

Filing a claim for long-term disability benefits can be very intimidating, especially if it is regarding a serious medical illness, injury, or mental issue. Denied LTD benefits are common due to a lack of medical proof, an issue with the definition of disability, or because the insurer believes an employee can still return to work.

Lawyers at Grillo Law have been specializing in disability benefits for 40 years and can:

• Assist you in completing and submitting your LTD application forms,
• Collect medical information that will help build your case,
• Represent you if your LTD benefits are delayed, reduced, or denied.

Having an experienced disability attorney on your side will give you the best chance at getting the LTD disability benefits that will help you maintain your health and stability.