Disability Insurance Information

How Much Does Long Term Disability Pay?

How much long term disability pays will depend on how much you earned before you stopped being able to work. Typically, insurance companies will pay between 60%-75% of your pre-disability earnings, although this varies from policy to policy. Some policies outline a specific monthly amount you are eligible for. Many private insurance policies will specify the monthly payment as long as you meet the requirements laid out in the policy.

Long term disability benefits are an essential way to keep income coming in when you are unable to work due to a disability. If you are managing a serious health condition and have been paying into long term disability insurance, you might wonder how much you can expect to receive from your disability insurance provider. Here’s a broad answer to the question, “How much does long term disability pay?”

How much does long term disability pay?

How much long term disability pays depends on your insurance policy and pre-injury wages. While some policies will set a flat amount that you will receive monthly, many others replace a percentage of your pre-injury earnings, typically between 60%-75%.

Your pre-injury earnings aren’t always straightforward. The annual salary stated will apply if you’re working under an employment contract. However, if your pay fluctuates, the insurer will likely complete a calculation to get an average.

Salary payment example:

Salary payment example

Hourly payment example:

Hourly payment example

Insurance companies offer different policies, so it is essential to understand the coverage and terms that are available through your group policy from your employer or the private policy you have purchased. Disability can be stressful and overwhelming, but with the knowledge of benefits and coverage, you can focus on your recovery with less stress about your finances.

When do you receive your long term disability payments?

Typically, long term disability payments do not kick in immediately. Instead, most plans require that you remain continuously unable to work for three to six months before you can receive payments. This period is known as the waiting or elimination period. During this time, it is possible to obtain short term disability benefits from either a group insurance plan or the federal government's employment insurance (EI) sickness program.

Disability payments: process & timelines

Here is a fairly typical process of applying for and receiving disability benefits.

  1. Suppose you are currently employed and have long term disability coverage through your employer's group insurance plan or you have purchased an LTD policy directly from the insurance company.

  2. You develop a chronic illness that impairs your ability to work. After struggling to keep up with the demands of your job for several months, you become unable to perform your usual work duties.

  3. You see your doctor, who provides you with a medical note and recommends you take sick leave.

  4. While on sick leave, you receive short term disability benefits through your group insurance plan or from Government Employment Insurance (EI)

  5. Once approximately three - six months have passed, your short term disability benefits end, and you begin receiving long term disability benefits instead.

  6. After two years, the definition of disability changes to require that you are unable to perform "any" occupation. Your doctor confirms that you are unable to carry out any kind of work.

  7. You continue to receive monthly long term disability payments until you can return to work or reach the age of 65.

How much long term disability pays is not always straightforward. It depends on the language of your policy, and it also assumes that you won’t face any denials or delays along the way. It’s best to work with an experienced disability lawyer to ensure you’re getting the maximum benefit from your policy.

Denied your long term disability claim?

Contact a disability lawyer at Share Lawyers today and put our experience to work for you. Our 35+ years of experience can help you win your case against Canada Life, Desjardins, Manulife, RBC Insurance, Sun Life, and other insurance companies. Our legal team offers a free consultation with 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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