How Does Disability Insurance Work in Canada?

A disability coverage contract is a covenant between you and a large insurance company that pools funds and offers promises of financial protection in the event that you become disabled.

Your end of the deal is simple: pay your premiums. Their end of the deal is fairly straightforward as well: carefully invest those pooled funds and when people can’t work, pay them the disability benefits they were promised.

The premise of LTD insurance and LTD benefits is simple

Out of many thousands of people, a small percentage are likely to become disabled sometime in the future. The insurance companies want to make sure that there is plenty of money left over after all valid disability claims have been satisfied. That’s called profit - there is nothing wrong with it as long as the company is playing fair with its policyholders who make a disability claim.

Your long term disability coverage & why you should go off work if you’re struggling

If your employer does not offer disability insurance coverage, you may have acquired your own private disability coverage directly from an insurance company. Many doctors, accountants and self-employed individuals purchase a private disability insurance policy.

Taking a medical leave from work is not an easy decision to make. Concerns about providing for yourself and your family and keeping your job may cause you to want to push through your pain, but this won’t make your problems go away. Stopping work is often the smartest decision for your long term health and well-being, and your long term disability benefits are there to provide you with financial support until you can return to work.

Our disability lawyers outline 4 main reasons why you should stop working to apply for disability benefits if you are struggling:

Your health comes first: If working with your disability has become so difficult that you are considering applying for short term disability or long term disability claim, you shouldn’t second guess yourself. Your health should be your number one priority. If you are suffering and unable to work, you need to stop. There are many advantages to taking the time off that you need – from healing an injury, to being free to seek proper medical care, to stress reduction. Adding strain to a bad situation can be very detrimental to your health and make your condition worse. Our disability lawyers have seen it happen.

If you go part-time, your disability claim eligibility could be reduced: Many people don’t realize that reducing their working hours can result in a reduction in the benefits they are eligible for. Your insurance company will look at the average hours you worked over a period of time to determine the number of hours you are eligible to claim for your short term disability and long term disability claim. If you choose to reduce your hours, you may only be able to claim benefits for the part-time hours you are currently working instead of the full-time hours you formerly worked. This is very risky. The reduced benefit entitlement may not be sufficient to cover your cost of living, medications, and treatments when you need them the most.

If you go part-time, you may lose your disability claim eligibility altogether: Before you take the plunge and reduce your working hours due to a disability, you should read your insurance policy carefully. Some group disability benefit plans may exclude you once you reduce your hours below a certain number per week. This means that if you find yourself unable to perform your reduced workload in the future you may no longer be eligible to receive any benefits at all.

If you stay at work, you risk being fired: Even if you push yourself to the limits in order to stay at work you may not be doing yourself or your company any favours. You may risk delaying your recovery or injuring yourself further. If you ask yourself honestly whether you are doing your job to the best of your ability, you will probably say no. This opens up the possibility that your employer has noticed that you are not doing your best work and that you are not contributing to the company like you were before. The employer may choose to terminate your employment for cause (which means you cannot sue for wrongful dismissal) if you are not doing your job properly.

Most group disability insurance plans come with a Benefits Booklet, or your employer may provide online access to a summary of your group benefits. Depending on how long you have been insured, you may or may not be able to locate your copy or you may not recall how to access this information online. If you have the information, make sure you read it carefully. But always keep in mind that the booklet is not the contract.

When reading the handbook, you will feel confident that you will be covered in the event that you become disabled. Reading the contract, after dealing with a disabling medical condition, you will see that the field is littered with landmines.

The disability insurance companies have designed the process so that they will have innumerable “outs” that justify them turning down your disability claim. If you purchased a private disability insurance policy you should have a copy of the contract or policy. It is important to read it carefully so that you know your full entitlement.

Your long term disability claim application

You have made the tough decision to stop working and apply for your short term disability or long term disability insurance claim. You have told your employer and you’re collecting the necessary documents in order to make your disability claim. Now what? You may feel overwhelmed by the process and have questions that your employer and your insurance company are not able or willing to answer. You’re not alone. Our disability law firm can help.

When a policyholder like yourself becomes temporarily or permanently disabled, they apply for LTD benefits promised in the contract. Depending on the wording in your contract and the nature of your medical condition, the disability insurer will come to a decision. If the decision is positive, then you’re okay for now.

If your long term disability claim is denied, then securing your disability benefits will take more work. That’s often when people contact the disability lawyers at a firm like Share Lawyers. We understand that things have not been easy for you over the last little while. Your health has been suffering, you are unable to work, and now your insurance company, who was supposed to be there in your time of need, has decided they will not pay your disability benefits. These benefits exist to provide you with the financial support you need so that you can focus on your health and rebuilding your life. It is unfortunate that your insurance company has not lived up to its promise. If your claim has been denied, we will fight to get you the benefits you are entitled to. We have over 35 years of experience helping those denied their disability claims and have helped over 7,500 Canadians. We can help you too.

In this video, Long Term Disability Lawyer and Assisting Managing Director Samantha Share outlines what you can do if your disability insurance claim is denied.

If you are considering stopping work to apply for employee or privately purchased disability benefits, but you’re not ready to talk to anyone yet, you can read through the Stopping Work page on our website.

Denied your LTD benefits?

If you have had your claim for long term disability denied, contact the long term disability law firm, Share Lawyers. Our 35+ years of experience in long term disability (LTD) law can help you win your case against Canada Life, Desjardins, Manulife, RBC Insurance, Sun Life, and other insurance companies. We offer free consultations and there are no fees unless you win your case. Join us on Facebook and become a Top Fan for a chance to win each month.

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