Understanding Long Term Disability (LTD) Insurance: What Happens if You’re Off Work Due to Injury or Illness?

If you’ve ever experienced an injury or illness that left you unable to work, you may have heard about Long Term Disability (LTD) Insurance. But if you’re like most people, you probably don’t know exactly how it works or when it kicks in. In fact, many employees have LTD coverage as part of their Employee Group Benefits plan but haven’t taken the time to fully understand it.

This article will explain how LTD Insurance for employee group benefits plans works, particularly if you need to transition from Medical Employment Insurance (EI) to LTD after an injury or illness keeps you off work for a long period.

What is Long Term Disability (LTD) Insurance?

LTD Insurance is designed to provide you with a portion of your income if you become unable to work due to a serious illness or injury that lasts for an extended period. It's a financial safety net to help you manage your living expenses while you're recovering.

How Long Before LTD Benefits Start?

If you get injured, such as suffering a fracture or serious illness, you might initially apply for Medical EI (Employment Insurance) benefits, which typically cover a portion of your income for up to 15 weeks. However, what happens if your recovery takes longer?

This is where LTD comes in. Most Employee Group Benefits plans include a waiting period before LTD benefits kick in, which is often around 119 calendar days of continuous disability. That’s about four months. If you are still unable to work after this waiting period, your LTD benefits should begin.

Should You Start the LTD Process Early?

Yes! If your doctor confirms that your injury or illness is likely to keep you off work for more than 119 days, it’s a good idea to start the LTD claim process as early as possible. This will ensure that there is no gap between the end of your Medical EI benefits and the start of your LTD payments. Your employer or HR department can help you with the paperwork, or you can contact your insurance provider directly.

What Happens to Your Premiums While You’re on LTD?

Once you’re approved for LTD benefits, your insurance company will often waive your LTD premium, meaning you won’t have to pay anything for this coverage while you’re receiving benefits. After about six months, your insurance company might also waive the premiums for other coverages like life insurance and accidental death and dismemberment (AD&D), depending on your eligibility.

Will LTD Cover You Forever?

LTD benefits typically continue for as long as you remain disabled and meet the insurance company’s definition of disability. However, LTD is not necessarily a “lifetime” benefit. The length of time you receive benefits can depend on factors like the severity of your condition and the terms of your specific policy.

For most plans, LTD benefits continue until:

• You recover and can return to work, or
• You reach the maximum benefit period, which could be age 65 or earlier, depending on your plan.

Summary

In short, LTD Insurance is there to protect you if a long-term illness or injury prevents you from working for an extended period. If you’re facing an injury or illness, the key things to remember are:

• LTD benefits typically begin after 119 days of continuous disability.
• It’s a good idea to start the LTD claim process early to avoid gaps between benefits.
• Your insurance company will often waive your premiums once you’re approved for LTD.
• Benefits will continue as long as you remain disabled or until you reach your plan’s maximum coverage period.

If you’re unsure about the details of your LTD coverage, don’t hesitate to reach out to your HR department or your insurance provider.