Short & Long-Term Disability Benefits FAQ

Question Summary

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  1. What evidence will you have to gather in order to prove that I am entitled to disability benefits?
  2. Will I have to pay taxes on any settlement or judgment?
  3. Why is it important to know whether or not my long-term disability is taxable or non taxable?
  4. Is there anything else I should try to find out regarding my long-term disability benefits from my employer?
  5. What is a short term disability insurance policy?
  6. What is a long term disability insurance policy?
  7. What should I do if I am unable to work due to a disability?
  8. What do I need to do in order to apply for short term or long term disability benefits?
  9. Do I need a lawyer to assist me with completing the various forms in order to receive short term or long term disability benefits?
  10. Do I need to communicate with my insurance company when applying for short term or long term disability benefits?
  11. What does “totally disabled” mean?
  12. What if my doctors can’t give me a diagnosis for my disability?
  13. What if my disability is psychological as opposed to physical?
  14. My disability insurance company is telling me to apply for Canada Pension Plan disability benefits. What should I do?
  15. I am disabled from working. How do I apply for Long-Term Disability benefits?

What evidence will you have to gather in order to prove that I am entitled to disability benefits?

Often, the assistance of experts is required in order to prove that you are unable to do your own job and/or any job.

The expert or experts secured to assist in your case will depend on the nature of your injuries. There could be a combination of experts including psychologists, psychiatrists, physiatrists and occupational therapists who will assist in assessing whether or not your injuries/disability is such that your condition meets the definition of “disability” under the policy.

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Will I have to pay taxes on any settlement or judgment?

Whether your disability benefits are taxable or non-taxable is an important consideration. Generally speaking, if through your employment you have paid the premium associated with having disability benefits, the benefits will usually be non-taxable in your hands. If your employer has paid a portion of the long-term disability premium or the entire long-term disability premium then the disability benefit will likely be taxable in your hands. Whether your benefit is taxable or non-taxable has a significant impact on the income stream you can expect through your policy should you become disabled. This is why it is important to contact your employer to find out the answer to this question should you become disabled.

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Why is it important to know whether or not my long-term disability is taxable or non taxable?

It is important to know whether your long-term disability benefit is taxable or non taxable because it makes a significant difference with respect to the amount of your benefit. For example, if you earned $40,000 per year (or $3,333 per month) your yearly take home pay will be in or around $31,600. This means that in ordinary circumstances you are living on $2,633.33 per month. Let’s also assume that your disability benefit is equal to 66.67% of your gross monthly salary. Thus, if your benefit is non-taxable the monthly benefit would be $2,223 per month (that is 66.67% of $3,333). If your benefit is taxable, your monthly benefit will be approximately $1,820. That is a big difference in income, and you will need to plan for the decrease in income by re-adjusting some of your expenses.

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Is there anything else I should try to find out regarding my long-term disability benefits from my employer?

Yes. You need to know whether the benefits are indexed so that you know when to expect an increase in the amount of the benefit, if any.

You also need to know whether the insurer will pay for any rehabilitation and/or treatment under the policy. Every policy is different and therefore sometimes a long-term disability policy simply pays a monthly benefit and sometimes there are a host of collateral benefits that accompany a long-term disability policy. Understanding what benefits are included is critical.

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What is a short term disability insurance policy?

A short term disability policy is a type of insurance policy that covers a worker for income replacement if he or she is unable able to work due to a disability for a short period of time. The length of time that a short term disability policy covers a worker’s lost income varies from a few weeks to several months, depending on the wording of the policy. In some cases, if a worker continues to be disabled following the end of the short term, he or she may be eligible to apply for long term disability benefits, if they are also offered by the employer.

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What is a long term disability insurance policy?

A long term disability policy is a type of insurance policy that covers a worker for income replacement if he or she is unable to work due to a disability for a longer period of time. In many cases, a worker may apply for long term disability benefits following receipt of short term disability benefits (if they are offered by the employer) or following a waiting period subsequent to the onset of a disability.

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What should I do if I am unable to work due to a disability?

You should consult with your doctor or other medical specialist in order to start or continue with the appropriate medical treatment. In addition, you should keep a chronological diary of major events surrounding your illness and disability as they occur. If you have not already done so, use your memory in order to recreate as accurately as possible a diary of such events and then note when you continue with diarizing events as they occur. The type of information which you should include in your diary includes:

  • What caused you to stop working and the date on which the injury or illness occurred;
  • Changes in your health and your ability to function;
  • When you were first treated for the medical condition which caused you to stop working;
  • Dates and particulars of all doctor and specialist appointments;
  • Dates and particulars of all hospital visits;
  • Dates and particulars of all diagnostic testing (for example, x-rays, MRI’s, CAT scans, PET scans, blood work, etc.);
  • Dates and particulars of all other health and medical appointments (for example, physiotherapy, chiropractic treatments, naturopathic appointments, etc.);
  • Particulars of telephone calls or meetings with your employer regarding your ability to work and any modifications to your job as a result of your disability;
  • Particulars of any telephone calls or meetings with your insurance carrier;
  • Particulars of any telephone calls or meeting with rehabilitation or occupational therapy specialists;
  • When you applied for disability benefits or any other types of benefits such as motor vehicle accident insurance benefits, CPP disability benefits, EI benefits, etc.

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What do I need to do in order to apply for short term or long term disability benefits?

You will need to complete a number of documents in order to apply for and receive short term and long term disability benefits. These documents may vary between various insurance companies. However, generally speaking, you will need to complete (1) a general short term or long term disability application form, (2) have your doctor complete a separate medical form describing the nature of your disability along with a descriptions of your restrictions and limitations, and (3) have your employer fill out a separate form describing your job and the physical and mental requirements of your job.

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Do I need a lawyer to assist me with completing the various forms in order to receive short term or long term disability benefits?

No. You do not need a lawyer to complete the various forms required to receive short or long term disability benefits. However, a lawyer may be of assistance in helping you to complete the forms and more accurately describe your physical and psychological restrictions and limitations. In most cases, an insurance company has only these forms available to it when deciding on whether or not to pay you disability benefits. If the forms are not completed properly, your benefits may be delayed or even denied.

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Do I need to communicate with my insurance company when applying for short term or long term disability benefits?

Yes. The insurance policy gives the insurance company the right to ask you for information. If you refuse to or fail to communicate with your insurance company, your application may not be approved and you might not receive your benefits, regardless of the severity of your disability. If you believe that the insurance company is being unreasonable in its requests and questions, you may ask a lawyer for assistance. You must answer all questions honestly.

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What does “totally disabled” mean?

You may have seen or heard of the phrase “totally disabled”. This is a term found in most long term disability policies. In short, “total disability” is a carefully defined legal term which is used in various insurance policies in order to determine whether or not a person is eligible for benefits. The definition of “totally disabled” varies from policy to policy. The criteria used to determine whether a person is “totally disabled” or not often includes the following:

  • Totally disabled from your own occupation in the short term
  • Totally disabled from your own occupation in the long term
  • Totally disabled from any occupation
  • Totally disabled from any occupation which would provide substantial remuneration
  • Totally and permanently disabled from any work or pay or profit.

Again, a lawyer may assist you in determining whether or not you meet the criteria for “totally disabled” under the terms and conditions of your own short or long term disability policy. If you meet the criteria for “totally disabled”, you should be eligible for benefits.

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What if my doctors can’t give me a diagnosis for my disability?

Generally speaking, most disability insurance policies do not require that a diagnosis be given before a person is found to be “totally disabled”. What is considered are the person’s restrictions and limitations that prevent him or her from working in his or her own occupation or any occupation. A person can have restrictions and limitations without having a clear diagnosis.

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What if my disability is psychological as opposed to physical?

A person can be “totally disabled” as a result of a psychological problem. Restrictions and limitations can be physical or psychological or a combination of both. Often times, psychological problems such as anxiety and depression prevent people from being able to work.

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My disability insurance company is telling me to apply for Canada Pension Plan disability benefits. What should I do?

In many group benefits insurance policies, Canada Pension Plan disability benefits are offset from any amounts that the insurance company may owe to you for Long Term Disability benefits. Thus, insurance companies will often request that you apply for Canada Pension Plan disability benefits. You can apply for Canada Pension Plan disability benefits if requested to do so by your insurance company. In fact, some insurance policies may even require you to apply for Canada Pension Plan disability benefits. If you are denied Canada Pension Plan disability benefits, you are entitled to apply for Long Term Disability benefits. In fact, being denied Canada Pension Plan disability benefits does not prevent you applying for and receiving Long Term Disability benefits (unless the insurance policy states otherwise). If you have any questions about the application process for either, you may contact a lawyer for assistance.

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I am disabled from working. How do I apply for Long-Term Disability benefits?

If you have Long-Term Disability benefits, you need to contact the human resources department at your place of employment.

If your office is too small to have a human resources department, there is usually someone who is in charge of employee issues. There may be someone specifically designated at your office, such as an office manager or it may be your employer directly.

You need a Long-Term Disability package. There are a number of forms that need to be completed: usually one by your physician, one by your employer and one by you. Your place of employment may not have the forms on hand, but will have the contact information for the disability carrier that you can call to obtain a package. These days many of the forms you will need to have completed are online.

A representative from the insurance company may call you to obtain further information. Once your package is completed and any further medical information needed to adjudicate your claim is submitted, you should receive a response in writing from the insurer indicating whether your claim is approved.

If your claim is denied, you need to contact a disability lawyer right away because Long-Term Disability Benefits are your financial lifeline and therefore you need to act swiftly.

At Patricia Santucci Personal Injury Law, we fight those claims everyday and we can help.

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