What is LTD?

Long-Term Disability (LTD) insurance pays you a portion of your lost income if you become too disabled to continue to work. Most LTD policies cover you no matter what type of injury or illness prevents you from working.

Some policies, however, exclude certain illnesses, while others exclude injuries or illnesses which are compensable under a Workplace Safety Insurance Board (WSIB) claim, if WSIB is available to you in your workplace.  Policies vary, so you need to look at your own policy for full details.

LTD may be paid for by employers, by employees or by having the employee and employer share the cost. There are different tax implications depending on who pays for the coverage. If the employee pays for it, the benefits that are payable to the disabled employee are non-taxable. On the other hand, if the employer pays for it, the benefits that are payable are taxable if the employee becomes disabled.

For LTD benefits, you need to be off work for several months before you can access Long Term Disability coverage. The amount of time you have to wait before you access LTD benefits is called the “elimination” or “qualifying” period. A typical elimination or qualifying period can range from 90 to 180 days. It is important to read your policy carefully to ascertain your elimination period. You should also discuss the matter with your employer.

LTD benefits can cover approximately 50% to 80% of your salary pre-disability, with a typical policy covering 662/3%. It can vary, so it is important to read your policy carefully. Additionally, some plans have monthly maximums which may cap the actual amount you receive.

Generally, plans can last until you are 65 years old. Some plans, however, have a limited time frame, such as 5 or 10 years. It depends on the plan, so it is best to look at the wording of your policy.

Many LTD policies have provisions that allow the insurance company to have you assessed by a doctor of their choosing in order to establish if you are entitled to benefits.  The practitioner that the insurance company chooses must be reasonably qualified to do such an assessment and the exam itself must be reasonable. This is often an area of great concern, and if you have any doubts, it is likely in your best interest to seek the advice of a qualified lawyer.

If you have submitted all proper paperwork and supporting documentation, and your family doctor supports your claim, but the insurance company will still not consider making payments, you may need to consider speaking to a qualified lawyer, who will assess whether you should be receiving benefits and explain your options.

Many lawyers who deal with LTD claims agree to work on a contingency fee basis, which means, essentially, that they do not get paid until your claim is resolved.