Accidents are an unfortunate part of life, which is why it makes sense to have insurance to protect your financial well-being.
Long-term disability (LTD) insurance provides financial assistance if you are unable to complete your assigned work duties due to an illness or injury. While many people are familiar with concept of an LTD policy, there are many moving parts. That is why having some understanding of this type of insurance can be beneficial.
At Gluckstein Lawyers, we can explain your basic rights and obligations when it comes to an long-term disability claim. Claim denials or a termination of benefits are not uncommon, but that doesn’t mean you should accept the insurance company’s position when they say “no”. We will examine the available remedies and decide on the most appropriate course of action.
How Does LTD Work?
Long-term disability is a benefit that your employer may offer, either paying all of the premiums or sharing the cost with you through regular payroll deductions. You can also purchase long-term disability coverage privately. It should be noted that if your employer’s plan includes group disability coverage, these policies tend to have lower benefit amounts. You may therefore want to consider buying additional coverage to further protect yourself. It is also prudent to review what your coverage includes and the limitations and restrictions of the policy.
Who pays for the policy is usually important because there may be quite different tax implications. If you paid and you make a claim because you are unable to work, the money you receive is not taxed. However, if your employer pays the full amount of the policy and you make a claim, that would be considered a taxable benefit, just as a car allowance would be taxed.
It is not at unusual for an employer to also offer what is known as short-term disability insurance. This comes into play when an employee is unable to work due to an injury or an illness that typically lasts three to six months. The assumption with short-term disability is that you will be back on the job within a few months. Anything longer than that and the worker may be eligible for LTD, which could conceivably continue until age 65
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