What Does Long Term Disability Actually Mean?
When you think about a disability, you may think of someone who is unable to work due to an accident. When this happens, the question on how they may be able to continue to support themselves and their family probably most likely comes to mind. This is where long term disability coverage comes into play.
In this article, we will explain what long term disability is, why employers should include it in benefits, requirements and what medical conditions may qualify for long term disability insurance.
What is long term disability?
Long term disability (LTD) coverage provides financial assistance when a covered plan member is unable to work due to an illness, injury or accident that stops them from completing the job’s duty.
Depending on the disability, this insurance benefit can provide income replacement up until the person is 65.
The monthly payments are typically 67% of your pre-disability earnings and can be received tax free if designed that way.
Should employers offer LTD insurance?
If you’re an employer, take a second to consider your employees. If one of them got into an accident or became medically unwell, would they still be able to support their family if they were unable to work? Would they be able to pay their mortgage on time? What about their heating bills? These are very hard questions to consider, but it’s important to think about these answers when it comes to considering whether or not to add this insurance option to your benefits.
Having LTD coverage provides employees the ability to know that accidents can happen and they will be okay if something occurred.
LTD coverage provides an employee and an employer many things.
- Income replacement due to accidents or illness.
Did you know that a typical 30-year-old has a four times greater chance of becoming disabled than they do of dying before age 65? And, one in six Canadians will be disabled for three months or more before the age of 50?
That is a lot of your workforce.
Accidents happen and when they do, it’s no one’s fault. But, because of an accident, someone may not be able to work anymore. Long term disability coverage provides the person who was in the accident a safety net.
Because of their LTD coverage, they can breathe easy knowing they will be covered and able to continue paying their bills while they’re unable to work.
- LTD coverage attracts skilled employees.
Did you know that more and more people are looking at an employer’s benefits package than they used to? Long term disability coverage is a very sought after benefit. It’s one that no one wants to need, but having it there provides a sense of safety during day to day life.
For many people, LTD coverage is on the top priority list for a benefits package. If you’re looking to attract skilled employees who will stay within your company for a long time, ensure that your benefits package is what they’re looking for.
Why is this coverage important?
Long term disability coverage is incredibly important because of the number of Canadians who will need it.
A 2019 insurance industry study found that 53,000 Canadians per year get approved for group long term disability coverage.
It provides people income replacement and provides the ability to continue living while they spend the needed time resting and recovering.
What qualifies for long term disability?
There are many things that will qualify for LTD. It’s important to do your own research and speak to your benefits advisor to ensure that you will be covered, if you’re considering applying for long term disability coverage.
Some of the reasons for disability include lupus, cancer, mental illness (depression, anxiety), chronic medical conditions (chronic pain, fibromyalgia, ME / CFS, back pain, etc.) and injuries (car accidents, falls).
LTD requirements.
If you’re experiencing any of the illnesses or medical conditions mentioned above, and your group benefits plan includes long term disability coverage, you may qualify for long term disability benefits.
How does long-term disability work?
You’ll be required to:
- satisfy the elimination period (each plan may be different, but a common elimination period is 119 days)
- apply by submitting an employee statement and having your physician complete and submit an attending physician’s statement to the insurance carrier.
- communicate with the insurance carrier and your employer during your leave of absence from the workplace to maintain your long term disability payments, and return to work planning (if applicable).
Plan Administrators: are you ready to add LTD benefits to your plan?
Are you ready to add long term disability coverage to your benefits plan? Please reach out to Navy & Sage benefits today. We’d be happy to go through options with you to ensure that your plan includes everything that you and your employees will need to feel covered.
