Most of the people who receive long-term disability (LTD) benefits receive it from their employment collateral insurance. LTD is offered as a form of engaging, retaining and supporting the employees. It is a contract between the insurance company and the employer. All LTD policies are not the same, though there are several elements which remain unchanged. If you are due to receive LTD benefits, then get in touch with a Disability Lawyer in Toronto as they will guide you through the process. The following reviews how the contract provisions typically.

1. Elimination Period:
   Each LTD policy specifies how many days an employee must take off from work with an illness or injury before the LTD benefits can start. This period is known as the “elimination period”. Some employees might have to exhaust their sick days, Short-term disability benefits, employment insurance sick benefits or even all of them. It is only after the elimination period that the benefits of LTD would begin.
2. Previous occupation:
   In Previous occupation period, once the person starts with LTD benefits, they are assessed for their ability or inability to perform their previous occupation. After usually two years, the definition of disability would change and then the employee is evaluated for their ability to perform any occupation that they are reasonably qualified to do. During this period, the employee’s medical health is closely assessed.
3. Amount that LTD pays:
   The amount that your LTD will pay is negotiated in the contract, but at times the employees are also offered an opportunity to pay a higher premium before their disability to get a higher payment. Some LTD policies pay as low as 30% of the previous income and some might pay as high as 70-100%. It is crucial to remember that the LTD contract will have a provision regarding the money that you receive from other sources like the Worker’s Compensation Benefits. This benefit will be deducted dollar for dollar from the LTD benefits. Hence, you will be getting the same total amount just from two different sources.

The LTD payment that you would receive could either be taxable or tax-free. The benefits information would state that. It is usually determined, based on the fact whether the employee is paying either a tax or full premium amount for the benefits, then the income would be tax-free, or else it is taxable.

4. Recurrence Clause:
   Recurrence Clause is for the employees that return to work after being on LTD benefits but become sick or injured again. The clause states that if the employee becomes sick within six months of returning to work from LTD, then they will go back directly to the LTD benefits. However, if the employee returns to work after the timeframe stated in the contract, then the employee will have to start the process again.
5. End Date:
   LTD benefits usually stop once the employee turns 65, they pass away, return to work or the insurance company suspends their payment.

Jennifer Sesco