Long Term Disability Canada FAQ

Long Term Disability Canada FAQ Featured Image

Long-term disability is a complex area of the law. Here are some of the most common questions we get from clients who are attempting to make long-term disability claims.

What is long-term disability insurance?

Long-term disability insurance is an insurance policy designed to replace your wages when injury or illness prevents you from working.

What is the difference between short-term disability insurance and long-term disability insurance?

A short-term disability plan will generally cover you from 30 days to 6 months before requiring you to apply for a long-term disability plan. A short-term disability plan also tends to pay a smaller percentage of your income than a long-term disability plan.

What is the difference between individual disability insurance and group disability insurance?

Group disability insurance usually comes from your employer, through union membership, or through membership in a specific group, like an alumni association. It usually has lower premiums.

An individual plan is a plan that you select for yourself and is not tied to your employment in any way. Premiums can be higher, but the fact that your disability insurance is decoupled from your employer can become an advantage if there are problems later down the line.

What types of disability insurance are there?

In addition to short and long-term disability you can buy specific disability insurance policies to cover specific situations.

Mortgage disability is a type of coverage purchased from your mortgage lender. It covers your mortgage payments if you can’t work due to injury or illnesses.

Supplemental disability insurance serves as a gap plan. It covers the difference between your weekly payments and your expenses if your disability payments aren’t sufficient to meet your expenses.

Disability overhead expense insurance is a business-owner plan that will pay overhead for your business in the event that you can’t run your business.

Technically worker’s compensation is a form of disability insurance. You are only covered by it if you are injured at work.

Who pays for long-term disability coverage?

Your coverage is paid by your insurer.

What type of disability allows me to qualify for long-term disability benefits?

A wide variety of disabilities may qualify. These can include heart attacks, strokes, cancer, anxiety, depression, PTSD, major spinal, neck, or head injuries, arthritis or rheumatoid arthritis, seizures, multiple sclerosis, lupus, fibromyalgia, GI illnesses, injuries caused by accidents, and more. The main criteria is that the injury or illness prevents you from working.

Will I have to file a claim in order to receive long-term disability benefits?

Yes. Most policies will have a claims form that you will have to fill out. You can usually file a claim online. You may have to provide evidence for your claims, such as medical records and check stubs.

What information is required on my disability claims form?

Every form is different. We advise you to read your form carefully, and to answer each question thoroughly and truthfully.

Are there deadlines when making a claim for long-term disability insurance benefits?

Yes. The specific deadlines will depend on your policy, but it’s generally best to get your claim in as quickly as possible.

In order to receive disability benefits is it required that I be confined to a hospital?

No. All that is required is to prove that you cannot work your own profession for the first two years, or any profession if your disability lasts longer than two years. Most people recover at home throughout most of the disability process.

Is it legal for insurance companies to hire someone to follow and video tape me?

Yes, and you should expect surveillance. Insurance companies are constantly on-guard against fraud.

Be careful of even innocent, seemingly unavoidable activities that violate doctor’s orders. If your doctor says you can’t travel up a flight of stairs then you need to avoid stairs, even if that means having someone else bring your groceries up to you and staying inside of your second floor apartment. These companies will literally look for any reason to deny your claim. Don’t give them the chance!

How long do I have to wait to collect long-term disability benefits?

You will usually start on short-term disability, and you’ll usually wait just 5 days or so for your benefits to start.

You will generally apply for long-term disability benefits while on short-term disability. You will then usually have to wait anywhere from 90 to 180 days to start receiving benefits. It is important to plan accordingly.

How much will I receive from long-term disability insurance benefits?

It depends on your policy. You could receive anywhere from 50% to 80% of your net pay. You may also be subject to a monthly maximum. Some private disability policies pre-determine the benefit and do not tie them to your salary.

How long do the long-term disability insurance benefits last? Are my benefits taxable?

Private benefits are not taxable. Employer benefits are.

Can other benefits be deducted from my long-term disability payment?

Yes. This can include WCB benefits, CPP benefits, AISH benefits, severance pay, and more. In general you are not allowed to “double dip” benefits, so all of these benefits will have complex calculations that they use to account for one another and determine how much they will send you every month.

Can my long-term disability insurance company force me to apply for the Canadian Pension Plan (CPP) Disability or other benefits?

It depends on your policy, though many do include such clauses.

What policy “riders” can you purchase with long-term disability policies?

Many policies allow you to purchase riders or modifications that improve or extend your policy. Examples include cost-of-living riders, which adjust benefits based on inflation, and the “own occupation to 65” riders, which eliminates the “any occupation” test.

Your insurance company may offer other, more specific riders with different functions.

Does long-term disability provided extended medical and dental care as well?

No, disability is basically only a wage replacement policy. Some employers offer medical benefit continuation. In addition you will continue to receive Medicare.

After being unable to work at my own job for two years can my insurance company stop paying me benefits?

This generally means you have failed the “any occupation” test. For the first two years your disability plan will kick in if you cannot work the occupation you worked before you became disabled.

After two years the test is whether you can work any job, at all. If you’re qualified for any position, or reasonably could become qualified, you’re expected to get out there and go to work.

Why has my long term disability claim been denied? Why have my long term disability benefits been terminated?

Insurance companies look for just about any reason to terminate benefits. This could include:

  • They are missing forms or evidence.
  • They believe you have committed fraud.
  • You missed a deadline.
  • You had a pre-existing condition you failed to mention.
  • You did not get medical care from insurance company approved doctors as required by your policy.
  • You’ve failed the any occupation test.
  • You have failed to mitigate your losses in accordance with your policy.
  • The insurance believes you are only partially disabled.

I just received a letter from my insurance company terminating my benefits. What should I do?

The letter should tell you exactly why your benefits were denied. In some cases you can mitigate the problem yourself by sending additional information and documentation. In other cases you’ll need help from a disability lawyer.

If you are unable to mitigate these issues yourself, it is time to get a lawyer involved.

How much will it cost to sue my insurance company?

Disability lawyers work on contingency. We don’t get paid unless we bring your case to a successful conclusion.

Need help?

We have over 20 years of experience handling long-term disability claims like yours. Don’t try to go it alone. Call (403) 269-7777 to claim a case evaluation today.

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