Long-term disability benefits are a type of benefit most commonly provided to employees by their employer through a group benefits plan. The insurance policy will pay a portion of the person’s income in the unfortunate event that they cannot work due to an injury or illness.

This article provides an introduction to long-term disability benefits and sets out five basic things you should know. 

1. What are long-term disability benefits?

Long-term disability benefits are a type of insurance that provides the policyholder with income replacement in the event they suffer a disability and cannot work. 

They generally begin after a prolonged period of being unable to work. As a result, they begin after any sick leave benefits provided by the employer, short-term disability coverage and employment insurance (EI) sickness benefits.

Long-term disability benefits are most commonly provided by employers as a group benefit. However, it is not compulsory for Ontario employers to provide these kinds of benefits. If employers do provide coverage, they may require employees to contribute to the cost of premiums.

If your employer does not provide long-term disability benefits or you are self-employed, it is possible to purchase your own individual long-term disability policy through a private insurance company.

2. How do you qualify to obtain benefits?

Each long-term disability benefits plan is different, so the specific terms and conditions stated in the policy are important. 

In order to qualify, you must be unable to work due to a long-term illness or injury and you must satisfy certain criteria outlined in the policy. Most policies require the person to be suffering from a “total disability” in order to claim long-term disability benefits, which generally means being unable to engage in employment. 

The person will need to file a claim form with the insurance company, part of which needs to be completed by their doctor. The insurance company may require further medical documentation or appointments. 

3. How much will the insurer pay?

This depends on the terms of the particular policy. Most long-term disability plans only pay a portion of your normal income, for example, 60 percent or 70 percent. There are likely to be other limitations as well, such as a cap on the amount payable each month.

For example, if the long-term disability benefits policy allows you to recover 70 percent of your salary up to a maximum annual salary of $100,000, and you earn $80,000 per year, the policy would pay $4,666 per month. If you earn $110,000 per year, the policy would pay $5,833 each month. 

Most policies have a waiting (or qualifying) period, following the onset of the disability, in which long-term disability benefits are not paid. During this period, it is possible you might be covered by other programs, such as short-term disability coverage. 

4. For how long can you receive benefits?

This once again depends on the terms of the particular policy. Many long-term disability policies provide benefits for two years when the person is unable to return to their “regular occupation” (the job the person had prior to becoming disabled). 

Following this two-year period, the policy may only continue to pay long-term disability benefits if the person is unable to engage in “any occupation” – as in, any occupation the person may reasonably become qualified to perform, having regard to their education, training and experience. Some disability plans may also require the person to take part in a rehabilitation program if they can help them get back to work.

Provided that the person remains “totally disabled”, there may be no limit on the length of time they can receive long-term disability benefits. However, some policies have a maximum benefit period, which is the longest period of time for which the insurance company will pay benefits. In addition, policies will expire at a particular time, which is often at age 65. 

5. What can you do if you are denied benefits?

The insurance company administers the long-term disability policy and makes decisions about whether claimants are entitled to long-term disability benefits under the policy. 

If the application is rejected by the insurer, which may occur at the outset or after some period of disability, you can appeal and ask them to reconsider the decision. An unfair denial or premature termination of long-term disability benefits can have a devastating impact on a person’s financial situation. We suggest speaking with personal injury lawyers at the appeal stage to understand what you require to move forward. If your claim for long-term disability benefits has been denied, you may also have a claim against the insurance company for compensation.

It is important to be aware that there are time limits to all long-term disability benefits claims and any delay in proceeding may be subject to a deadline. If you do not take action within that time frame, you may be barred from bringing a claim for compensation. To ensure that your rights are protected, it is important to speak with a lawyer experienced in handling long-term disability benefits as soon as possible.

Contact the Personal Injury Lawyers at Tierney Stauffer LLP in Ottawa, North Bay, and Eastern Ontario for Advice on Disability Benefits

At Tierney Stauffer LLP, we understand being denied disability benefits can cause financial ruin for injury victims. We recognize no two claims are the same, which is why we give each client the personal attention needed to bring about the best possible resolution.

Our personal injury lawyers can provide advice to those who believe they have been unfairly denied insurance benefits. If you are injured in an accident, it is critical to receive knowledgeable legal advice to ensure that you meet any applicable deadlines. Contact us at 1-888-799-8057 or reach out online to set up a consultation today.

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