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What you need to know about Long Term Disability Benefits

Paciocco & Mellow can assist you with your long-term disability claims. We have successfully helped many clients with their long-term disability claims.

Our next post will discuss why it is important to have a lawyer represent you when you have a long-term disability claim. This post will provide you with a general overview of long term disability benefits (LTD benefits). 


What are LTD benefits?

LTD benefits are a form of insurance that pays you a portion of your income if you become disabled and are unable to work. LTD benefits can be paid for by your employer, both the employer and employee or a self-employed person can take out a policy.

LTD benefits can cover anywhere from 50% to 80% of your pre-disability salary.

LTD benefits can be paid up to age 65, unless the plan has a limited time frame that states otherwise.


Are LTD benefits taxable? 

It depends on who pays for the coverage.

If the employer pays for the policy in full, the benefit is taxable.

If the employee contributes to the LTD policy, the benefit is non-taxable.


When can I expect to receive benefits? 

It depends on your policy. There is an elimination period that can be up to 180 days (6 months).


What can I do until the elimination period is over? 

Some employers may offer short-term disability benefits. These benefits can be accessed after a shorter waiting period and can bridge the gap until you have access to LTD benefits.

If you do not have access to other benefits, you can apply for EI Benefits or EI Sickness Benefits which can provide up to 15 weeks of benefits.


How do I know if I qualify for LTD Benefits:

If you are unable to do all the duties of your current job, or substantially unable to do them, you may meet the test for disability.

You will need to consult your policy to find out what the exact definition of “disabled” is.


What does Completely Disabled mean? 

Some policies may use the term “completely” disabled or “totally” disabled, meaning that a person who was employed is no longer able to carry out their normal duties at work.

This does not mean that you are physically disabled per se, but means that due to illness or injury, you are unable to work and it makes no sense to continue working as you must focus on recovery.  It is more of a ‘common sense’ definition.


What do the terms Own Occupation and Any Occupation mean?

Most policies, for the first 24 months (2 years), use the “own occupation” test- meaning you are entitled to claim for long-term disability benefits under the policy if you are unable to perform the essential duties of your own occupation.

After 24 months, the test becomes “any occupation”- whether you are able to perform any occupation for which you are reasonably qualified or could be reasonably qualified for by way of education, training or experience.

It is important to review your policy, with your lawyer to determine at what point the “any occupation test” applies. Some policies may use the test from the outset.


Can my insurer deduct other benefits from my monthly LTD payments? 

If you are in receipt of other monthly benefits such as WSIB (Worker’s Compensation Benefits), disability benefits received from the government (EI, EI Sickness Benefits, ODSP, CPP Disability Benefits), Criminal Injuries Compensation Board Benefits or any wages from your employer (termination or severance pay), your insurance company will reduce your monthly payment by these amounts. 

Why? Because most LTD policies have clauses that allow them to do so- in other words, it is written in the policy that they can deduct these amounts from your monthly payment.  Most LTD policies are actually intended to “top up” your other disability benefits (if you have access to other benefits).

You should also be aware, that if you receive CPP Disability Benefits, and receive a benefit for your child/children, some LTD policies include this amount in what they are allowed to deduct from your monthly benefit.

With respect to CPP Disability Benefits, in many policies, it may stipulate that an insured person has to apply for CPP Disability Benefits.

Some insurers may be satisfied with an application that is denied, some insurers may require that an appeal be made. This is why it is important to have proper representation. The lawyers at Paciocco & Mellow can help you with your CPP Application.

Be sure to review your policy carefully and always provide your lawyer with a copy of your policy so they can be sure that you are receiving the proper  monthly payment. 

The law firm of Paciocco & Mellow prides itself on its reputation of excellent service and client satisfaction.

A long-term disability claim is an overwhelming process and we aim to provide reassurance to our clients.

If you require help applying for long-term disability benefits, or if your long-term disability claim has been denied, please contact the experienced Windsor personal injury lawyers at Paciocco & Mellow at (519) 915-SORE (7673). We will be there to assist you with a free, no obligation initial consultation.

The law firm of Paciocco & Mellow aims to help provide you with Peace of Mind at a Difficult Time.