Long-Term Disability Insurance: What You Need To Know

Long-term disability (LTD) insurance is a form of insurance coverage that protects an employee from loss of income security in the event that the individual is unable to work due to a specific health condition/illness, injury or accident for an extensive period of time. However, every long-term disability insurance policy is different and has certain aspects that you should research and be aware of.

In this article, we’ll reflect on the specifics of long-term disability insurance and what you need to deeply consider before deciding if it is worth it for you.

What Is Long-Term Disability Insurance?

Long-term disability insurance is a relatively straightforward insurance premium product, which is designed to protect employees during a long period of time while disabled and unable to work. The insurance will pay the individual a monthly income as replacement income while they are out of work and meet the test of disability contained in the policy. With a good LTD policy, the amount you receive will come quite close to your regular take-home income after taxes. Here are a few examples of some important LTD terminology to keep in mind:

  • Elimination Period: This is the period of how long you must be disabled prior to receiving benefits. LTD insurance is based on the assumption that if you are disabled short-term, you’ll have to rely on your personal savings or opt for a short-term disability policy instead.
  • Benefit Period: Refers to the duration you could be receiving monthly replacement income payments. Certain LTD policies have shorter benefit periods of a few years, whereas others can reach retirement age.
  • Benefit Amount: The amount you will be paid monthly and is commonly 66.6% of your monthly salary before taxes.
  • Exclusion: Refers to a certain condition in which the disability will not be provided. This is often based on a pre-existing condition or if the individual is involved in dangerous activities. 

Are There Any Uncertainties Associated With LTD Insurance?

  • Less Comprehensive Coverage: The older an individual is, the less comprehensive a new long-term disability insurance policy will be and likely the more expensive. The sooner into your career you purchase an LTD policy, the more comprehensive coverage you can get in terms of cost and coverage.
  • Not Full Coverage: LTD insurance policies do not cover everything and each is different. The coverage amount is often based on the individual’s health, profession, age and income.

An Edwards Pollard LLP long term disability lawyer will help you fight if you have been unfairly denied your proper LTD benefits. If you cannot work and have been denied LTD benefits from your insurance company, we can help you. Contact us to get in touch today at https://edwardspollard.ca/ltd-denials/.