Personal Injury

Long-term disability insurance part 1: the application

By Kirsten McMahon, Associate Editor

In part one of a series, Toronto personal injury lawyer Andrew M. Lee discusses the basics of LTD insurance and the importance of filing your application in a timely manner.

If you become unable to work due to an illness, a long-term medical condition or after suffering an injury in an accident, you may be eligible for long-term disability (LTD) benefits, Toronto personal injury lawyer Andrew M.Lee tells

LTD insurance may be offered to employees as part of their group benefits package. He says the policy would provide for a person meeting a specific disability test to receive a monthly benefit, calculated as a percentage of their monthly income.

“Although policies vary, most have a two-part disability test,” says Lee, principal of Lee & Associates. “If you're disabled from the type of work that you do for your employer, and meet the ‘own occupation’ test, then you will receive the monthly benefit for a specified number of months, typically 24 months.”

After that initial period whether two months or otherwise, you only receive continuing benefits if you meet the much more stringent ‘any occupation’ test — where you must be disabled from any type of work, he says.

LTD benefits are paid to qualified claimants for a time limited period, often to age 65 but sometimes for lesser periods of time.

If you become disabled from working, Lee advises to make inquiries with your human resources (HR) department right away and start any paperwork. He says there is a waiting period, typically anywhere from 90 to 120 days. Many employers will pay a short-term disability (STD) benefit during that waiting period.

“When the STD benefit runs out and assuming you qualify for LTD benefits, it is preferable to have a seamless transition from STD to LTD benefits. Obviously, you have to apply many weeks in advance of the end of the waiting period, so your benefits are not interrupted,” Lee says.

He suggests consulting with a lawyer if you are disabled from work and need to apply for LTD benefits.

“Even if you have not been denied, it is a good idea to call a lawyer to get some early information,” Lee says,

He says it’s crucial to co-operate with any rehabilitation plans arranged by the insurance company and your employer.

“You have to be seen as mitigating and doing what you can to get better,” Lee says. “The insurance company may require you to undergo an assessment as part of their policy requirements so you should be abiding by that request as well.”

He says most, if not all, policies have a specific requirement that in order to be eligible for LTD benefits, you have to be under the continuing care of a doctor.

“If you're not seeing a doctor, that could disentitle you to benefits,” he adds.

When applying for LTD benefits, it’s a good idea to apply for Canadian Pension Plan (CPP) benefits at the same time, Lee says.

“There’s usually a provision in the policy that says that the insurance company will deduct whatever amount the disabled person is entitled to get through CPP benefits or, if they haven’t applied, an amount equivalent to that,” he says.

Stay tuned for part two where Lee will explore what to do if your LTD claim has been denied.

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