Short Term Disability insurance is meant to cover temporary absences from work whereas Long Term Disability insurance is used when you will be unable to return to work for a significant amount of time. If you have Short Term Disability insurance, Long Term Disability benefits will not commence until after you have exhausted the your Short Term Disability benefits.

Before you are entitled to Long Term Disability benefits, the waiting period, elimination period, or qualifying period must have passed. If you do not have Short Term Disability coverage, an employee will typically qualify for Employment Insurance (EI) sickness benefits with the Government of Canada or the equivalent in Quebec, which will provide an employee with financial assistance during the waiting period before obtaining LTD benefits.

The definition of a disability to access benefits can vary between insurance companies and even between different plans from the same company. Some conditions that may qualify as a disability for the purposes of Long Term Disability benefits include chronic illnesses, chronic pain, neurological impairments, and psychiatric illnesses. In order to qualify for benefits, some policies may require the applicant to be ‘totally disabled.’ It is important to consult your policy to determine whether or not your disability, limitations and restrictions will qualify you for benefits. 

While the definition of total disability can vary, typically an employee is considered “totally disabled” if they are unable to perform their “own occupation” for the first two years of disability. After two years, the definition of total disability changes; the employee must demonstrate that they are unable to do “any occupation.” In other words, the employee must be unable to work because of illness or injury in any job suitable for them based on education, experience, and qualifications.

You should obtain a copy of the LTD benefits application form from your HR department or directly from the insurance company. Carefully read over your benefits policy to determine what responsibilities you may have under the policy and whether there are any elimination, qualifying, or waiting periods. An elimination period refers to the amount of time that you must be disabled prior to applying for benefits. During this time, gather as much supporting documentation as possible regarding your disability so that you will be prepared to file a complete disability claim.

The application document usually contains three forms to be completed – one for the employee, one for the employer, and one for the physician. Your personal statement should be as detailed as possible and provide information regarding any symptoms, limitations, or restrictions that may prevent you from working in your occupation. These limitations and restrictions can be mental, physical, or both. 

The purpose of the employer’s statement is to provide documentation regarding your duties and roles within their organization and to state whether they could alter your role to accommodate your disability. 

Finally, the purpose of the medical practitioner statement is to provide the insurance company with details regarding your diagnosis, symptoms, treatment, limitations, restrictions and prognosis. This statement generally comes from a doctor and should be as detailed as possible as insurance companies often scrutinize medical evidence.

The amount you will receive from insurance benefits will vary depending on the type of disability plan. Most LTD plans will replace 60% to 70% of your income up to a certain amount, depending on your policy.

Benefits may be taxable depending on the type of benefits that you receive. 

Whether or not Short Term and Long Term Disability benefits are taxable will depend on who is paying the premiums. If all the premiums are paid by you, the benefits received are generally non-taxable. However, if any portion of the premiums is paid by the employer, then the benefits received are generally considered to be taxable benefits.

In the “own occupation” period - usually the first two years - benefits are paid if you are unable to return to the job you had before becoming disabled.      

In the “any occupation” period - usually after the first two years of disability - benefits are paid if you are unable to work any job and can be paid out until you are 65 years old. It is important to note that insurance companies routinely terminate benefits after two years unless you can prove that you are unable to work in any occupation. 

Having a disability lawyer assist you in the application process can ensure that your application has the necessary documentation and help minimize any gaps in coverage.

Long Term Disability claims are frequently denied, which is why obtaining the services of a disability lawyer can be useful at the outset of the claims process. A lawyer can help you navigate the claims process and avoid some of the common reasons why an insurance company denies your claim in the first place. 

Some of the most common reasons why an LTD claim is denied include: insufficient medical evidence, not meeting the policy’s definition of total disability, having the ability to work in another occupation, having a pre-existing or excluded medical condition, or failing to meet insurance company deadlines.

Although most insurance companies have an internal appeal mechanism, this option is generally most effective when you have additional medical evidence to provide, as insurance companies are often unwilling to reverse their own decisions unless there is new medical evidence for them to consider. A lawyer experienced in LTD benefits can assist you in the appeal process and advocate to the insurance company on your behalf and can discuss the different options, including taking legal action against the insurance company.

If your benefits have been terminated, you should begin by reviewing the reasons provided by the insurance company. If your benefits have been terminated due to a lack of documentation, you may be able to rectify this by contacting the insurance company and providing them with the necessary information. If your benefits have been terminated due a disputing the existence of your disability or need for benefits, you should consult a lawyer to determine your next steps.

If you are considering suing an insurance company regarding Long Term Disability benefits, it is important to note that you usually only have two years from the initial denial of your claim to do so. If you decide to pursue an internal appeal first, this may not provide you with additional time to file a lawsuit.

Suing an insurance company generally begins by filing a statement of claim. Once the statement of claim is filed, the insurance company will file a statement of defence, and the parties will then exchange documents and information. In Ontario, the parties will proceed to mandatory meditation to encourage settlement of the dispute before going to trial. Most cases will settle at this stage of the process.