Fast Facts: Group Long Term Disability Coverage

Some plans offer back-to-work assistance to help you integrate back into the workplace following your illness or injury.

If you have a group Long Term Disability (LTD) plan, you have a valuable financial safety net that replaces a portion of your salary if you become injured or ill.

To avoid surprises during a difficult time, it's important to understand what you're covered for, how disability payments are calculated, and what factors could affect your level of coverage.

Here are seven points to keep in mind:

  1. Full coverage is not always automatic When you join a group Long Term Disability plan, you may or may not be eligible for full coverage automatically, depending on the plan. In many cases though, you can get base coverage without providing any medical information. In order to get the full coverage amount, you will need to provide medical evidence and be approved for coverage by the medical underwriting staff.
  2. Other disability income will affect your payments For example, if you receive Canada Pension Plan (CPP) disability payments or payments from your auto insurer in the case of a car accident, these sources of disability income (also known as "offsets") will reduce the amount of LTD benefits you're eligible for under your plan.
  3. Your payments may or may not be taxed In most cases the disability monthly benefit can either be a pre-tax or after-tax payment. If you pay for the entire premium under your plan, your payment will be paid to you tax-free. If your employer pays any portion of it, the monthly benefit is taxable.
  4. Some plans will adjust for cost of living Some group plans may include a Cost of Living Adjustment (COLA). This means your disability payment may keep pace with inflation.
  5. A waiting period may apply Some plans have a waiting period (also known as an "elimination period") before you're eligible to receive benefits. If you become ill or injured, you must first submit your claim for approval. If approved, you will be eligible to receive disability benefit payments once the waiting period is over.
  6. You can get help returning to work Some plans offer back-to-work assistance. For example, you may be eligible to participate in rehabilitation and return-to-work programs that will help you integrate back into the workplace following your illness or injury.
  7. Back-to-back coverage may be possible If your illness or injury recurs you may be eligible for additional benefits, and you may not need to restart the waiting/elimination period. In some cases, you may be able to restart your benefits without delay.

Want to learn more?

Contact your Group Benefit Advisor or call 1-855-264-2174.