KINDS OF DISABILITY INSURANCE
GROUP DISABILITY POLICY
The majority of working people who have any kind of disability insurance have group coverage. With this kind of policy, the insurance provider first looks at the size of the entire group that is being underwritten. There are no additional features in group disability insurance policies and no individual assessments. The insurance provider determines the premium rates by looking at the type of work done by the group that is applying for coverage, and charges rates to the employer or employee based on the risks associated with that industry. The type of coverage, such as short term and long term benefits, waiting periods, and benefit periods, are negotiated between the employer and the insurance provider. Some employers provide short and long term disability insurance; others provide only long term disability insurance (LTD). Employers usually re-negotiate group coverage annually. Disability group rates may increase if there have been high numbers of claims during the previous year.
In most group long term disability policies, there is usually a clause that covers you for the first two years you can’t work in your own occupational classification. This is called “own” occupation. After the first two years, however, the definition of disability usually changes to mean that you can’t work in “any” occupation. Continuing benefits are then dependent on a number of factors, including whether or not you remain disabled according to the definition of the insurance provider. This definition is often a combination of medical factors, a percentage of pre-disability income, and suitable employment possibilities associated with your education. Some insurance providers offer retraining as part of their benefits package for people receiving long term disability benefits.
Some long term disability plans will require that you apply for Canada Pension Plan (CPP) Disability Benefits as soon as you move from short term to long term disability. Most plans deduct CPP from the amount payable by LTD plan.
Volunteer Legal Advocacy Program MS Society of Canada, BC Division