Disability Insurance

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Disability Insurance

Aside from providing a positive workplace, a great way to create employee loyalty is to offer a comprehensive group benefits plan that includes Disability Insurance.  

What is Disability Insurance?

Disability Insurance is designed to provide a financial safety net for your employees in case a disability prevents them from working. As part of your group benefits plan, Disability Insurance offers your employees the security of knowing that their income won’t disappear if they can’t work.  

How Does Disability Insurance Work?

Insurance products normally protect against material loss, such as the loss of property, but Disability Insurance protects against the loss of income. If a policyholder becomes disabled, their disability benefits may qualify them to receive a portion of their lost income. Benefits providers often offer different plans, with premiums based on how generous the potential coverage is and what the terms of the policy are.  

A few factors that can influence the premiums are: 

  • The length of the benefit period. This is the period during which the policyholder can expect to receive benefits. 
  • The amount of the disability benefit. There are options for plans with higher allowable coverage amounts. 
  • The amount of benefit without Medical Evidence. All plans cover some, if not all, of the allowable benefits without medical evidence.  
  • The length of Own occupation coverage. How long you can claim benefits from not being able to do your own occupation, and without a wider job search. 
 

Typically, this type of insurance covers both short-term and long-term disability. 

Short Term Disability

Short Term disability can start as early as day 1 of an injury or illness, replacing your Employment Insurance (EI) disability benefits. Short Term Disability can cover a higher amount of lost income than EI. Benefits generally terminate after 112 to 126 days. At which point, if you have the coverage, Long Term Disability would take over. 

Long Term Disability

A long-term disability claim is one that can last years, rather than months. This type of disability insurance covers ailments that profoundly impact the claimant, making it impossible for them to continue working after the waiting period has been satisfied. 

Waiting periods usually fall in line with Employment Insurance benefits, or with Short Term Disability if you have it. Short and Long Term Disability can be purchased separately, one is not needed for the other.  

Some qualifying disabilities for Short and Long Term claims include: 

  • Chronic depression 
  • Fibromyalgia 
  • Multiple Sclerosis 
  • Lupus 
  • Heart disease 
  • Lyme disease 
  • Psoriatic arthritis 
  • Chronic sleep disorders 
  • Crohn’s disease 
  • Accidents that prevent you from working 
  • Mental Health issues 
  • Heart Attacks 
  • Stroke  
  • Cancer 
  • Any Injury or illness that prevents you from performing your duties 

Why Choose Lifetime Benefits for Disability Insurance?

Taking care of your employees is a key part of fostering company loyalty. While you’re taking care of your employees, let us take care of you. As your benefits provider, we’ll work with you to create a group benefits plan – including disability insurance – that offers the best possible care to your valued employees. As your plan administrator, we’ll handle the minutiae of onboarding employees and processing claims, leaving you free to look after your business. Ask for a free quote today. 

Get a free no-obligation online quote for employee benefits by following the link:

Disability Insurance FAQ

No they are separate options and not required.

That depends on your specific needs. Short term disability does pay more than employment insurance but knowing there is comprehensive coverage could lead to more absences.

Employment insurance offers a rebate if you submit the proper paperwork to them on a regular basis. To offset the costs of short term disability, please click here to learn more **Add as hyper link to “click Here” https://www.canada.ca/en/employment-social-development/programs/ei/ei-list/ei-employers/premium-reduction-program.html

That depends on your specific needs. Short term disability does pay more than employment insurance but knowing there is comprehensive coverage could lead to more absences.

When employees start on a long term disability plan, they are considered outside the group plan and would continue on with the LTD benefits regardless of if the company is still active, has cancelled their benefits or moved to another carrier.

The employees collecting disability benefits would stay with the old company to collect their monthly benefit. Employees would not transfer automatically but would be subject to grandfathering rules which may allow them to transfer some or all benefits without medical evidence.

NEM is the amount of an insurance (usually short/long term disability, critical illness and life insurance) that is automatically allowed without any medical evidence from an employee. For example, an employee may be entitled to up to $100,000 in life insurance. However, there is an non evidence maximum of $50,000. In order for the employee to get the full benefit of $100,000 they would have to provide medical evidence of insurability and qualify for the remainder.

An all source maximum is the most an insurance company will allow you to collect for disability insurance from multiple sources – the most common is 85%. Since disability insurance usually pays 66.67% of your gross income, as a monthly benefit they will allow you to have an additional ~18% of your gross income come from other sources such as ICBC or a second disability plan.

All source maximums are in place so that a person would not make more money while off injured or ill than if they were at work. It hinders an employees safe recovery back to work.

Yes, as long as your total amount does not exceed the all source maximum of the policy.

If an employee pays ALL of the premium for long term disability from their paycheck, or is taxed as a taxable benefit on their paycheck for it, they will receive the benefits tax-free. The long term disability premium itself is taxable.

If an employee pays ALL of the premium for short term disability from their paycheck, or is taxed as a taxable benefit on their paycheck for it, they will receive the benefits tax-free. The long term disability premium itself is taxable.

Unfortunately, a disability can be permanent and a person may suffer throughout the remainder of their life. Benefit plans can cover you until age 65 and some personal disability policies can cover you until age 70.

Yes and no. Some policies will allow you to return to work partially and still collect partial benefits. In specific cases for highly specialized industries, with the right policy you can collect full payment and work else where. But for most cases you cannot get another job while on disability without it affecting benefits.

According to the World Health Organization, the most common disability under the age of 60 is depression.

In 2022 the average payment is $1,053.20 which shows the need to have your own plan outside of the government.

No, at age 65 your CPP Disability is converted to CPP Retirement.

The insurance company has unique forms which they ask your doctor to fill out and return to them.

It can be, the definition for most disability plans are paraphrased as saying “you are disabled if you cannot perform the duties of your job due to injury or illness” – severe anxiety could qualify.

It can be, the definition for most disability plans are paraphrased as saying you are disabled if “you cannot perform the duties of your job due to injury or illness” – severe anxiety could qualify.

It can be, the definition for most disability plans are paraphrased as saying you are disabled if “you cannot perform the duties of your job due to injury or illness” – severe depression could qualify.

Long term disability is a private insurance. It can be paid through a group benefits program at your work, or by you personally.

When you turn 65 you are no long eligible for the plan (some exceptions apply). At which point you would be eligible for CPP and depending on other income such as investment income, you may also be eligible for Old Age Security (OAS) and Guaranteed Income Supplement (GIS). You many even have a pension from your job or past employment.

You may qualify for Short or Long Term disability should your illness prevent you from performing the duties of your job. Mental health claims make up approximately 1/3rd of all claims.

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Disability Insurance with Lifetime Benefits