A long-term illness can cause financial strain to an individual, especially when he or she is forced to stay out of work. Statistics show that 30% of the working class from ages 25 and above are prone to accidents or illnesses that may result in long-term leave from work. Most of these occurrences are outside the office; the employee may be considered fully liable. It is during such instances that an employee should get long term disability insurance. Long-term disability (LTD) insurance coverage can cover the loss of income caused by an employee being away from their job to pay for bills and medical expenses.
Most employees emphasize the need for common medical benefits, but it is also important to get LTD coverage. Long-term lack of income can bring serious financial disadvantage.
What is LTD Insurance?
In simple terms, LTD coverage is a policy in which the provider covers a percentage of an individual’s monthly income in exchange for fixed monthly premiums. This is provided so that the policy holder’s reason for lack of income is within the defined conditions of the policy. Also, financial support will continue until you get back to work or until the period stipulated in the policy ends.
Who Pays for LTD Coverage?
There are generally three types of plans:
- Company Plans paid by employers
- Individual Plans paid by employees
- Shared Cost Plan paid by both employees and employers
In previous years, long term disability employer responsibility lies with the employer, not the employee; Company Plans were traditional. However, due to shifting economic conditions and other related factors, more options have been made for Shared Cost and Individual Plans. Each type of plan has its own cost and tax implications.
How to Get Long Term Disability from Work
Companies or the employers typically provide corporate Short Term Disability and LTD coverage to their employees. However, the maximum benefit for these policies are standardized regardless of how much income the employee has. In order to be fair, most companies base the capping amount on the average salary, putting higher ranking employees at a considerable disadvantage. This equally means that managers and executives need to purchase individual long term disability insurance coverage if they want to replace 100% of their lost income, in the event of an illness or permanent disability.
What to Look for in a Long Term Disability Policy
You need to be very specific in what you need from the variety of long term disability benefits in Ontario. You have several options to consider and you need to be aware of these in order to get the most robust policy possible. The following are some features you might want.
- Non-cancelable policies. This prevents the insurance company from cancelling the policy under unreasonable conditions. The premiums should also be fixed and unchangeable as long as you pay the premiums regularly and on time. In general, all contents in the policy should remain unchanged no matter the circumstances from the date it has been purchased until the time you submit a claim.
- Untaxed claims is also very important. Most LTD insurance cover around 60 to 70 percent of their salaries. This is enough to replace the lost funds an employee approximately gets from one payout after all deductions. If tax is taken from this, the amount will be insufficient.
- Own occupation coverage allows you to continue receiving claims even if you are technically back to work, only with a different occupation. There are times when the illness deems you incapable of going back to your original work and forces you to work at another place, only with lower salary. In such cases, you can continue to receive assistance as long as the job does not belong to the same nature of work of your previous job. Moreover, the salary should also be lower than your previous rate.
- Residual benefits are also something you might want to look into when getting a policy. Long Term Disability employer obligations states that companies need to provide financial assistance to disabled employees. However, this amount is only part and is not enough for an employee to maintain his quality of life. Also, it doesn’t apply when you are deemed capable of working even just for part-time. A lot of employees suffer from partial disabilities and residual benefits help cover the difference in income. Just make sure that the policy does not require you to qualify for a total disability coverage first before getting the residual benefits.
How to Prove Disability
The first step is to review your LTD policy and see which conditions support your claim. The second is to secure documentary proof. The only way to prove a disability is to provide medical proof. If your injury or condition prevents you from going to work, your human resources officer can suggest total disability. Make sure to coordinate with your attending physician about the requirements so that you can process your claim as soon as possible.
The doctor’s opinion weighs the most in your medical records. If he clearly specifies that you are not able to work, your Long Term Disability employer will have no choice but to grant you leave and release the benefits you are entitled to. Depending on the insurance provider, the doctor might need to fill out additional forms from the insurance company as part of the supporting documents. Aside from this, expect to submit MRIs, X-rays, surgical reports, lab results and medical findings.
How to Handle a Denied Claim
If your insurance provider denies your claim, make sure that you have provided all the necessary documents before seeking help from a disability lawyer for work. If you have exhausted all your efforts in negotiating with the provider, you can ask for third-party intervention from several Canadian governing bodies such as the Canadian Insurance Services Regulatory Organizations, Financial Consumer Agency of Canada, and Assuris.
In all processes that involve legal action, it is essential to have sufficient documents. Make sure to record all the steps you have taken and have a written or recorded proof. This will serve as the foundation of your claim and all the processes that will result to that in the future.
