Good health is something we all take for granted. At some point, we have all been man-down with a cold or stomach flu and we usually find ourselves appreciating our health once we recover and resume a normal life.
But, what happens when you fall severely ill and recovery is only possible after a long road of expensive treatments?
In this case, you may not be able to continue with work as you once did. As a result, this will negatively affect your income. So, many people take out what is known as long-term disability insurance policies to protect themselves and their families in the event of long-term disability.
But is it worth it? In this comprehensive guide to long-term disability in Ontario, we take a look at all there is to know about these insurance policies. We cover everything from the different types of long-term disability to qualifying conditions and how to file a claim.
What Is Long-term Disability In Ontario?
Long-term disability is a form of insurance policy. Its primary aim is to provide a form of income replacement if, because of some form of physical or mental disability, you find yourself unable to work for a period of three months or longer.
Long-term disability insurance policies usually pay out on a monthly basis. In other words, you receive your payout as you would your monthly salary. But, the amount payable and payment period does not continue indefinitely. Most insurance policies will provide monthly disability benefits up to the age of 65.
The terms and conditions of your chosen policy will set out the monthly payment amount and how long you can expect to receive benefits.
The terms of the disability benefits will differ depending on:
- the insurance company you use
- the long-term disability coverage you take out
- your premium payable
Most long-term disability policies will pay out between 60% to 85% of your salary.
Long-term disability insurance claims differ significantly from short-term claims. As the name suggests, short-term disability benefits assist you in the event that you are temporarily unable to work.
An example of a short-term disability benefit is EI sickness benefits (employment insurance sickness benefits). This usually applies when an employee has no more sick leave.
Conditions That Qualify For Long-term Disability In Ontario
How do you know if you qualify for long-term disability benefits? Let’s take a look at some of the conditions that qualify you for a disability claim.
If you are in doubt as to whether your illness or disability qualifies, it’s always best to reach out to a disability lawyer.
There are no specific conditions that trigger long-term disability (LTD) benefits. Your long-term disability insurance provider will consider a range of factors when it comes to whether your condition receives coverage.
Common Conditions Covered By LTD Benefits
- Spinal cord injuries
- Multiple sclerosis
- Prostate cancer
- Breast cancer
- Bipolar disorder
- Mental illness
- Chronic pain
- Musculoskeletal disabilities
- Autoimmune diseases
- Lung and respiratory disease
- Digestive system disabilities
- Post-surgery complications
- Serious orthopedic injuries
- Speech disorders
- Huntington’s disease
- Neurological disorders
- Endocrine disabilities
There are many other conditions not included that disability lawyers are in a position to advise on for your long-term disability claim.
Factors Insurance Companies Consider For LTD Benefits
One of the first factors an insurance company will look at is your medical condition in relation to their own definition of total disability in terms of your policy.
Most insurance companies will only pay benefits if you are ‘totally disabled’. For example, you may have an illness as severe as multiple sclerosis but not be immediately considered totally disabled and receive no long-term disability benefits as a result.
This may be because you are able to still earn an income or carry out some of your duties at your place of employment. You may, however, qualify at a later stage.
That being said, there are insurance companies that will approve a disability claim regardless of whether you can still perform some tasks at your place of employment. In other words, by virtue of not being able to earn the same income as you did prior to your disability, you will receive long-term disability coverage.
The main focus, however, is your medical condition and how and to what extent it renders you disabled. As a result, when determining whether to pay disability benefits, an insurance company will closely examine your medical records.
While this is the main focus, it is not the only one. Disability insurance companies will also consider your treatment plan which is very important when determining payouts. In the event that your insurance company does not agree with your treatment plan, they may deny or terminate your payments.
How Long Does Long-term Disability Last?
The benefit of taking out a long-term disability insurance policy over a short-term disability coverage is the duration of the payout. Short-term disability benefits are usually only for a maximum period of 6 months.
Long-term disability payments, however, continue until the injured party is well enough to start working again or until the coverage period terminates, which is usually at the age of 65 (whichever comes first). As a result, long-term disability financial benefits could pay out for decades.
That being said, insurance companies usually provide LTD benefits for the first two years. This is usually the time period in which the individual cannot work in their own occupation. Thereafter, insurance companies will only continue to pay the disability benefit if the insured party cannot return to any occupation.
If you are unable to perform essential duties in your chosen or usual employment field then it is said that you cannot work in your own occupation. In this case, you will be entitled to disability benefits.
If, however, after two years you are able to perform work in another occupation, other than your chosen field, then you may no longer receive benefits because you do not qualify under any occupation policy.
Usually after two years or the ‘own occupation period’, an insured party will need to reapply to the insurance company for LTD coverage. The insurance company will then reassess whether you are able to perform job duties in any other occupation.
What Is The Elimination Period?
All long-term disability benefit policies have what is known as an elimination period. This is essentially the period between the start of your disability and the payout of your long-term disability benefits. It is also referred to as the qualifying period or waiting period.
This waiting period or elimination period varies depending on the insurance company’s terms and conditions. But, usually, the period varies between 90 and 120 days. In the event of a longer elimination period, the insurance premiums are lower.
In the event that you require financial assistance during the waiting period, you can apply for short-term disability insurance until the qualifying period expires.
How Much Does Long-term Disability Pay In Ontario?
Very few long-term disability insurance companies will contribute 100% of your pre-disability income. Usually, the insurer will only pay a portion of your salary.
This ranges between 70%-80% of your own job salary depending on the LTD benefits in your insurance policy. This amount is also limited to a specific amount of your annual salary.
So, this means that someone who earns a high monthly salary may only receive a fraction of this amount due to the limitation imposed on annual salary amounts.
As a result, if you are a high earner looking to take out long-term disability benefits, it may be wise to consider an executive long-term disability plan that provides for adjustable income caps.
Types Of Long-term Disability Benefits
When it comes to long-term disability benefits in Ontario, there are three main sources. These are the following:
- Disability insurance companies in the private sector.
- Provincial long-term disability benefits from the Province of Ontario.
- Federal long-term disability benefits (Government of Canada).
These three sources then go on to provide several types of disability benefits.
Long-term Disability Insurance (Employer Group Plans, Private/Individual LTDI Policies)
The first type of long-term disability insurance policy stems from the private sector. There are three kinds of plans here:
- the Individual plan
- employer group plans
- special purpose insurance
When it comes to the individual plan, you purchase this straight from the insurer and pay a monthly premium. This type of plan usually appeals to higher-income earners, business owners, executives, and professional service providers.
The individual plan is the most common form of long-term disability benefit. It is usually based on income loss rather than the inability to carry out your employment. The benefits usually last between 2-5 years or alternatively to 65 years of age (retirement age).
The group insurance plan is usually utilized by employers. It is a great plan to offer employees an income replacement benefit should they no longer be able to work. These can be in the form of both short and long-term disability benefits. The buyer is usually an employer, union, or professional association. In the case of a group plan, the employer pays a portion of the total cost of the premium.
The last kind of long-term disability benefit under the private sector is special purpose insurance plans. These are plans designed to insure specific life events. Some of them include:
- Creditor’s insurance plans
- Critical illness insurance
- Dismemberment insurance
- Life insurance
- Travel insurance
Workers Compensation (WSIB)
Workers’ compensation insurance, which is managed by the Workplace Safety and Insurance Board or WSIB, is a form of provincial long-term disability benefit. This insurance only applies when you are injured during the course and scope of your employment. Further, you must be employed by an Ontario employer who is a part of the WSIB.
For example, let’s say you work as a delivery driver for a supermarket in Ontario that is covered by the WSIB. During one of your deliveries in the company vehicle, you are involved in a terrible car accident and sustain severe injuries that lead to total disability. You would then likely qualify for long-term disability benefits under the WSIB.
If however, you were involved in the accident while using the company vehicle but not for work purposes and sustained the same injuries, you may would not qualify for long-term disability benefits. This is because you were not injured during the course and scope of your employment.
Many employers in Ontario are covered by WSIB. However, if you are unsure whether your employer has this cover you can contact the board to get confirmation.
A great benefit of this insurance is that it pays out for both income loss and medical costs.
Ontario Disability Support Program (ODSP)
Another form of provincial long-term disability insurance is covered under the Ontario Disability Support Program or ODSP. This insurance program applies to all Ontario residents provided they meet the financial and disability requirements.
The disability requirements for this cover are set out in the Ontario Disability Support Program Act. You must also be financially needy to receive coverage under this benefit. This forms a part of the two-step inquiry process.
The ODSP will first assess whether you are in financial assistance and whether you meet the threshold. Thereafter, they will move on to the second leg of the inquiry which assesses your disability.
Canada Pension Plan Disability (CPPD)
One of the long-term disability benefits provided by the federal government is the Canada Pension Plan Disability or CPPD. This benefit, however, is available to a smaller pool of people. Only if you have worked and paid towards the Canada pension are you eligible to apply for cover.
Similar to the benefits offered by private insurance companies, the CPPD only applies in the event that you a have physical or mental disability that prevents you from continuing your current employment or finding new employment. In this case, payments are made to the insured person monthly and continue until the person reaches the age of 65.
Disability Tax Credit
The last type of long-term disability benefit, which is also provided by the federal government of Canada, is Disability Tax Credit>.
Again, like the CPPD, almost anyone who is a resident and pays taxes in Canada can qualify for this disability benefit.
However, this benefit differs from all the others in that it does not pay out monthly. Instead, it provides a refund of federal taxes already paid.
In the event that you are not a taxpayer but suffer from a disability, you may still claim this benefit provided that you are a dependent of someone who does pay taxes.
For example, if you have a child who suffers from a disability you may claim in terms of the child benefit. This benefit pays out a monthly sum.
Why Are Long-term Disability Benefits Important?
We all rely on our monthly income to survive and provide for our families. We don’t always envision falling ill and not being well enough to perform basic daily tasks. Months of medical expenses and post-hospital treatment plans are enough to send you into bankruptcy. Couple that with earning little to no income as you are unable to perform the usual tasks at work.
While you have the choice of claiming EI benefits from the government, this is often only for a period of 15 weeks. Thereafter, your benefits terminate. Other options like claiming from the CCP are possible but can take over a year to materialize.
By thinking ahead and taking out a long-term disability benefits policy you will be putting yourself and your family in safe hands should you become totally disabled. When your disability claim is accepted, you will receive a monthly payout relative to your salary once earned.
That means you can focus on recovering rather than on where your next meal will come from.
How To File A Claim For Long-term Disability Benefits
When it comes to filing a claim in terms of your disability policy, there are important steps to follow to receive your LTD benefits. Disability insurance lawyers are well-versed in all these processes and procedures and are always happy to assist.
First things first, you must have coverage for long-term disability benefits. This plan can be through an employer or an independent insurance broker. You must also have been off of work for a long period due to your disability.
Once you have all the basics, follow the below 7 steps to file a claim.
Determine The Waiting Period Of Your Policy
All long-term disability policies have a waiting period. Whether it’s 90 days or 120 days, it’s important to know this before you start the application process. This is because it has an obvious effect on whether you will receive your LTD benefits.
Some insurance companies allow claim applications during the waiting period. Then, once the waiting period expires you will immediately receive your LTD benefits. However, this is not the case with all insurance companies.
A waiting period differs from policy to policy. So be sure to check your schedule to ascertain timelines for your claim application.
Understand Your Medical Condition and Consolidate All Your Medical Records
This is the most important part of your claim process. Start by chatting with your doctor to find out whether they are in agreement with your long-term disability claim. It’s unlikely that your claim will be successful if your doctor is not on board with your application.
It’s also important to obtain any and all necessary medical records that clearly set out your medical condition. These records should also set out a treatment you may need, like a rehabilitation program. This all has an effect on the success of your disability benefits claim.
At the end of the day, it is important to keep in mind that your long-term disability insurance company will assess whether your medical condition renders you totally disabled or not.
Inform Your Insurance Company That You Intend On Applying
Once you’ve gotten the go-ahead from your doctor and collected all your medical records, you must inform your long-term disability insurance company that you attend on applying for benefits.
This gives them the opportunity to send through an application package and clear instructions on how to apply.
long-term disability claims can be a long and complicated process. So, by taking this small step, you can ensure you attend to all the necessary and avoid unnecessary delays.
Complete The LTD Application Package
After informing your insurance company that you intend to make an application for disability benefits, you will need to complete the LTD application package. You can obtain this application bundle from your HR representative, your employer, your union rep, your insurance broker, or the insurance company itself.
You will need to follow all the instructions carefully and complete each form with as much detail as possible. Attach all necessary supporting documentation and make sure it is all clearly and correctly marked so that referring to annexures is a simple task.
In each form, you will need to set out your personal information and information relating to your accident, illness, or medical condition.
The purpose of the application package is to have one set bundle of documents that clearly outline that you are totally disabled and entitled to LTD benefits.
Most application packages include three main forms which require completion:
- Notice of claim, which the claimant (person requiring ltd benefits) must complete.
- Employers report, which the employer must complete. This document sets out the claimant’s duties at work and their time off since disability.
- A medical report is completed by the medical practitioner dealing with your disability.
Submit The Application Package With Supporting Documents
Once you have completed all the documentation and had all forms signed by the relevant parties you can submit the application with all supporting documents directly to your long-term disability insurance provider.
To save time and ensure that your application is considered in its totality, you should send all application documents and supporting documentation in one package. Make sure that it includes all of the following:
- Your completed and signed application form.
- An additional sheet that sets out all the supporting documents attached, their titles, and page numbers.
- The medical form that has been completed and signed by your medical practitioner.
- Your employment form (completed and signed by your employer).
- A cover letter setting out all attached documentation.
Cooperate With Reasonable Requests From Your Insurance Company
After submitting your application and all your supporting documentation, you will need to wait until your insurance company contacts you. More often than not, they will have questions or require more information. It’s important that you cooperate and respond to all reasonable requests for information as soon as possible.
This ensures that there are no unnecessary delays in having your long-term disability benefits paid out.
Some of the more common requests you can expect to receive include the following:
- Confirmation via telephone call of any outstanding information.
- Provide the long-term disability insurance company with any medical records not included in the application package.
- Require further information from your medical practitioner.
Wait For Your Insurance Company’s Decision
Once you have gone through all the above steps, the only thing left to do is wait for the decision. Generally, the insurance company should get back to you between 30-60 days. This is in the event that there were no delays in getting any other information or supporting documentation to the insurance company when requested.
You may receive the decision via a telephone call, a letter through the mail, or an email directly from the insurance provider.
If you receive approval for your LTD benefits claim, you must take the time to read through the approval letter to understand all the terms and conditions. It is often in the approval letter that the insurer will inform you to reapply for LTD benefits after year two of receiving payments.
If, however, your claim is denied, you are within your rights to request reasons for the denial and ask that the insurer reconsider your application. This process is called an appeal.
How To Appeal A Denial Of Benefits
In some very unfortunate instances, your long-term disability claim may be denied. When this happens, you may feel overwhelmed and panicked but you need to remain calm and remember that you have a right to appeal the decision.
Luckily, most disability plans in Ontario follow the same appeal process. Below, we take a look at the steps.
Get The Decision In Writing
First things first, get the decision in writing. You need to have written proof that your claim was in fact denied and on what basis. You will then be in a better position to decide whether you want to appeal the decision or if the denial of benefits is a fair one.
Determine The Deadline For Your Appeal
Next, you need to make sure that if you are going to appeal the decision, you do so within the necessary time limits. Depending on the type of plan, there may be different time limits. For example, if you are appealing the decision of a Disability Insurance Policy, you have between 30 and 90 days to do so.
For CPP disability benefits, you have 90 days to appeal a decision. With WSIB, you have between 30 days and 6 months whereas ODSP only provides 30 days within which to lodge an appeal.
Failing to file an appeal in the stipulated time period means you risk losing the opportunity to appeal altogether.
Identify The Reasons For The Denial
When you ask for the denial of the long-term disability claim in writing, the letter or mail should set out the reasons for the denial. Without this, the denial would be unfair.
The reason for denial is an important part of the appeal as you need to go through each one and state why it is wrong.
Some of the reasons for denial you may need to respond to include the following:
- late filing of an application
- information or documentation missing
- change of disability definition
- failure to communicate with the insurance provider
- not following medical advice
- discrepancies in your story
- pre-existing medical conditions
Collect Evidence To Build Your Case
Once you have identified the reasons for the denial you need to gather all your evidence to show why the reasoning is wrong. For example, if a reason for denial is not submitting a specific document, you may want to produce evidence that shows that the document was emailed or posted.
Write An Appeal Letter
Then, take all the reasons and your evidence and formulate an appeal letter that sets all this out coherently. This is essentially your appeal and it needs to be done correctly and professionally.
Some items to include in your letter include:
- That you intend to appeal
- The new evidence attached and how it relates to the appeal
- A short paragraph stating why each reason for denial is wrong
Cooperate And Wait For The Decision
Once you have attended to all the above steps there is nothing left to do but cooperate and wait for the decision.
Long-term disability benefits are life-saving insurance policies. We don’t know what the future holds and so it’s always better to be prepared for the worst. By taking out a long-term disability policy you can rest assured that you and your loved one will be financially stable should your health take a turn.
With the variety of policies and different kinds of insurance on the market, it is important that you stay informed and up to date. If you have any further questions, be sure to reach out to us at Fosters Law. Our personal injury lawyers have years of experience in disability claims and can guide you through the whole process.