Extensive Guide To

Long Term Disability (LTD)

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Have You Been Denied an LTD Claim?

At Badre Law, our team of long term disability lawyers will work on your behalf to stand-up against the insurance company. If your claim for LTD insurance coverage has been denied, then we hold the insurance company accountable for the inappropriate denial of your LTD claim, or the termination of your benefits.

Badre Law has a long history of success when it comes to reclaiming benefits for our clients. We have helped many people in situations that to them, have felt dire and hopeless.

If you have been denied coverage, do not hesitate to seek legal advice and contact our team of LTD lawyers for a free consultation.

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1. What are long term disability benefits?

Long Term Disability payments are made to a person once a month when they are unable to work because of a disability. To get long term disability payments you must first be covered under a disability plan. Many federal government workers have long term disability plans. Usually if your employer provides you with health benefits it will also include a long term disability plan.

The disability payment is based on a fixed amount or on a percentage of your salary. It is usually for a set amount of years (example 5 or 10 years) or until the age 65.

All long term disability plans have a waiting period (a period of time that you must wait before receiving your first payment). Often, before receiving a long term disability payment, you must first go through short term disability or EI sickness benefits.

So, if you become sick or injured or are generally unable to work due to a medical condition then you should apply for long term disability benefits. What’s nice about long term disability benefits is that causation does not matter. This means it doesn’t matter WHY you are unable to work. So long as you meet the disability test then you will get paid!

To begin the process, fill out the application forms. You may have to submit supporting medical documentation or sign an authorization for your long term disability insurer to access your medical records.

Ltd when to Apply for Benefits

2. How do you know when to apply for long term disability benefits?

You can think of Long Term Disability benefits as a type of Income Replacement Benefit. That is, you are unable to work due to illness, injury, mental disability etc. and so your disability insurer will pay you a portion of your regular pay while you are off work.

This means that you should apply for Long Term Disability insurance when you can no longer function vocationally for whatever reason.

Typically, long term disability picks up where short term income coverage or EI sickness benefits end. The period of time between the onset of your disability and when you begin receiving long term disability benefits is called the “elimination”, “waiting” or “qualifying” period. The length of this period depends on what your policy states. Please check your manual to find out what the waiting period is. If you are still unable to return to work after this time, you will begin to receive long term disability benefits if you are deemed disabled within the meaning of the policy.

3. Are you eligible for long term disability benefits?

You are likely to be eligible for long term disability benefits if you are an employee or union member. If your employment includes a group benefits plan then it is very likely that it includes disability coverage. If you happen to be self-employed then you probably don’t have long term disability coverage unless you purchased coverage through a broker or professional association.

Long term disability plans are usually paid out if you meet a certain disability test of either total disability or some variation thereof. Disability benefits often have two levels of tests: Test #1 will apply within the first 2 years of the onset of your disability, and Test #2 will apply 2 years after the onset of your disability.

  1. Test #1: Within the first 2 years of your disability: In order to receive monthly payments, you must prove to the insurance company that you are unable to do your regular job.
  2. Test #2: After 2 years of your disability: In order to receive monthly payments, you must prove that you are unable to do any job for which you are qualified for.

Beware of exclusionary clauses in your long term disability plan. This means that the insurance company will not cover you under some exceptions. The most common exclusionary clause I see is pre-existing conditions. From a practical perspective this means that the insurance company will not give you monthly payments if you are disabled due to a medical condition you had BEFORE you enrolled in the plan.

With respect to exclusionary clauses, you will only be precluded from monthly payments if you make a claim within the first couple of years of enrolling in the plan. This is known as the pre-existing exclusionary period.

4. Qualifying for long term disability

A common question our office receives is “how serious does my medical attention need to be in order to get long term disability benefits?” The short answer: there is no specific condition or injury that you need to sustain in order to get the benefits. At the end of the day you must meet the disability test that is outlined in your policy manual. Often times you will see “total disability” but it can be some variation of this.

In this case, it is important that you receive a diagnosis as soon as possible. Insurance companies are more likely to pay out your long term disability claim if they are able to point to a specific diagnosis or medical condition. Examples include back problems, psychological issues, chronic pain, visual disorders, heart problems, etc.

Ltd Benefits Insurance Company is Telling Me Apply for Cpp

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

For employer-sponsored group long term disability insurance, benefits can cover anywhere between 50% – 80% of your pre-disability salary. I find that most of my clients will be covered for 66.66% of their pre-disability salary. The disability payments are not paid by your employer, but by your disability insurer. Sometimes there are monthly maximums which put a limit on the amount you can receive. Please double check your LTD policy manual to see how much your long term disability insurer is on the hook to pay you.

For individual, private disability policies, benefits are pre-determined by the disability policy so that an injured or sick person already understands what their monthly disability benefit will amount to in the event they are unable to work.

As an example, if you were earning $4,000 per month while working, and your LTD policy entitles you to 70% of your gross pre-disability income, then your LTD payments will be $2,800 per month when you go on disability leave ($4,000 x 70% = $2,800).

How Long Do Ltd Insurance Benefits Last

6. How long do LTD insurance benefits last?

It depends. Please read your long term disability policy manual to find out the details. Some policies will have a set time frame such as 5, 10, 15 years.  Other policies will pay you (so long as you meet the disability test) until you are 65 years old.

There are even some policies out there that will pay you for a lifetime! These kind of policies will usually pay you a certain percentage until the age 65 and then a lesser amount for the next 5, 10, 15 years or even for life.

7. Appealing your long term disability benefits denial

Your insurance company may choose to deny your benefits and refuse to pay your long term disability claim. This occurs when they believe you do not meet the disability test under the policy.

All insurance companies have a process whereby claimants can appeal the insurance company’s denial. Usually this starts with an internal appeal and then ends with a civil lawsuit in front of a judge or jury.

Everything starts with the denial letter. The denial letter will include reasons for the denial and your options and the steps you need to take if you wish to appeal the decision. We recommend getting your doctor to look at the appeal letter to see if he or she is willing to write a letter or report in response to the denial. The denial letter will say you have the right to appeal and will give you a deadline for doing so.

There are 2 avenues for appealing the denial of your long term disability claim:

Internal: Essentially another employee or manager within the insurance company will look at the appeal and reconsider the medical records. The other employee or manager has the power to approve your application for long term disability benefits. Usually insurance companies will allow 2-3 rounds of internal appeals before they cut you off.

External: If you have exhausted the internal appeals process you will have no choice but to bring a lawsuit (external appeal). This takes the appeal process away from the insurance company and into the hands of a judge and jury. Throughout the course of a lawsuit you and the insurance company will have opportunities to settle before reaching trial. It is important to note that you may not need to exhaust all internal appeals before proceeding with a lawsuit.

8. After your long term disability approval

If you’ve been approved for long term disability benefits, congratulations! Don’t forget, you will still have to deal with the insurance company. Your insurance company will still monitor you and request updated medical records from time to time. They will also follow up with your treatment and may ask you to attend medical assessments with certain specialists to determine if you meet the disability test. Unfortunately, you will need to do what they ask, even if you disagree wit hit.

9. Are long term disability payments taxable?

The short answer again: it depends. If you are self-employed and have a private disability policy, then it is not taxable as income. If you have a group plan through your employment, then your plan will be taxable if your employer pays more than 50% of the monthly premiums for your benefits. If you settle your long term disability claim then the lump sum that is past income is taxable and the portion of the lump sum that is for future benefits is not taxable.

Long Term Disability Independent Medical Examinations

10. Independent medical examinations

Most long term disability plans allow for independent medical examinations (IMEs). These medical examinations do not focus on treatment or rehabilitation.  The purpose of these medical examinations is to determine whether you meet the disability test for monthly benefits.

Unfortunately, you will have to attend the IME even though you probably don’t want to. Not attending an IME can result in the denial of your monthly payments. The insurance company has the right to choose the doctor too.

We recommend attending the assessment and doing the best you can. Sometimes you can be pleasantly surprised and get a favourable result (a finding that you meet the disability test and will continue receiving benefits).

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11. Long term disability and surveillance

I often see my clients in a state of shock when I show them surveillance that the insurance company has done in order to determine if their medical condition is legitimate.

They key to success with insurance companies in these type of scenarios is to be consistent. Do not lie. If the surveillance is showing you doing something that is inconsistent with what you told them then you will lose credibility. There is a good chance the insurance company will cut you off from your benefits.

Many of my clients are often surprised to hear that surveillance is legal. It is, indeed, legal. The insurance company is allowed to film you in a public space. The insurance company is also allowed to go through your social media profile as long as the settings are public.

Please keep in mind, when you are bringing an insurance claim then be mindful of what you do in public and what you post on social media.

12. Can I travel while on long term disability?

The short answer: it depends! Most long term disability policy manuals will have a section that discusses the rules for travel. Please review your policy manual to see what it says about travel.

13. My insurance company is telling me that I have to apply for Canada Pension Plan (CPP) disability benefits. Is this true?

Most of the time, yes. Most Long Term Disability policies provide for an “offset” of any CPP disability benefits you receive. This means your insurance company gets to deduct the amount of the CPP benefit you receive from your monthly LTD payments. Many LTD policies require you to apply for CPP disability benefits, and some even require you to appeal if your claim is initially denied. If your insurance company is telling you to do something then make sure the LTD policy speaks to this. Ask the insurance company representative to point where in the policy does it outline your requirements.

Qualifying for Long Term Disability

14. LTD benefits and subrogated rights in civil lawsuits (tort claims)

If you are receiving long term disability benefit payments because you were injured in an accident (e.g. from a car accident, incident at work, or slip and fall) you may have also started a lawsuit against the at fault party who caused your injury.

Almost all long term disability insurance policies require you to reimburse the insurance company for any amount they paid you, from any money you receive in a settlement or court judgment in your lawsuit. This is called the insurance company’s right of subrogation.

This is meant to prevent what is known as “double dipping”. The insurance company wants to avoid paying you long term disability benefits if you also receive compensation for the same disability from another party in a lawsuit.

For this reason, if you are in a lawsuit, it is extremely important you advise your lawyer if you start receiving long term disability payments.

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