How Much Does Long Term Disability Pay?
What is Long Term Disability?
Long Term Disability (“LTD”) is an income replacement benefit usually available by virtue of a group insurance policy. The benefit is intended to provide monthly income if you become unable to work due to a medical condition. The LTD coverage and particulars can be found inside your group benefits booklet.
How much does long term disability pay?
The LTD benefit could be a percentage of your income or a flat amount.
For example, if your LTD benefit is 50% of your gross monthly income and you earn $5,000.00 per month, the benefit would be $2,500.00.
In other instances, if your salary is more complicated (i.e.: strict commission structure or base salary with a commission element), the benefit calculation could be tricky. Sometimes insurers may improperly calculate the benefit because commissions or a bonus were not taken into account. If you feel there is an issue with your benefit amount, it’s important to seek legal advice to determine if there’s an underpayment issue.
Does other income impact the LTD benefit?
The short answer is – yes. LTD benefits are subject to offsets. These offsets are defined within the policy.
An offset is essentially characterized as other money (or income) that you receive that impacts the LTD benefit.
Common offsets include employment income, Canada Pension Plan Disability benefit or loss of earnings received under a WSIB claim. Offsets may even stretch to rental or business income.
When do LTD benefits begin?
If you qualify for LTD benefits, you’ll need to submit an application to the insurer. An application requires a Plan Member Statement, Plan Sponsor Statement and Attending Physician Statement.
Once a completed application is submitted, the ball is now in the insurers court to make a decision. Remember, the insurer can approve, deny or pend your claim. Insurance companies say they try to have a decision on a claim within a “reasonable time”, but what exactly does that mean?
- It could mean the insurer makes a decision within 6-8 weeks from submission of a completed application.
- It could mean your claim has been pended because further medical records are required.
If your claim is approved, the insurance company should pay you without delay. LTD payments are usually released at the end of the month, but this may differ depending on the insurer.
If, for example, it took the insurance company 3 months to approve your claim, they should provide you with a total arrears payment reflective of 3 months of benefits.
The monthly payment should continue so long as the insurer has approved your claim.
The Insurance Company has Approved my Claim until Date “X”
Sometimes the insurance company approves a claim for a set amount of time. This could be for three or six months into the future.
The insurer then pays you for that period but does not agree to pay beyond. This counts as a denial of benefits. It’s important to call a lawyer who can explain your options going forward.
When to Call a Disability Lawyer
For those faced with applying for LTD, the biggest issue can be ensuring they are getting the benefits they deserve and whether the insurance company is treating them fairly.
You should speak to a disability lawyer if:
- Your disability insurance claimwas denied, or pending and you don’t know what to do next.
- The insurance company is pressuring you to return before you are medically ready.
- You were terminated while on long-term disability leave.
If you’re struggling with a denied claim, insurance pressure, or workplace retaliation, the disability lawyer at Whitten & Lublin is in your corner. Call 416 640 -2667 or contact us online to schedule your free disability consultation.
Author – Aman Chaggar