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Does Long-Term Disability Run Out?
Long-term disability benefits payments do not last indefinitely.
If you’ve been diagnosed with a serious medical condition that prohibits you from performing the duties of your job for an extended period of time, you may be eligible to receive financial relief in the form of long-term disability benefits. But, depending on the terms of your policy, various factors could determine the length of time you may be able to collect these payments.
Different insurance plans stipulate different durations for long-term disability benefits. Some disability plans may continue to send you monthly compensation until you reach a certain age, or for a predetermined length of time.
In many cases, if your medical condition prevents you from performing the duties of your current job, and you have paid sufficiently into a disability plan, you could receive disability payments for up to two years. After two years, the eligibility requirements for your benefits may be altered, and you may only be able to continue receiving benefits if your medical condition prevents you from performing the duties of any job, even if it’s unrelated to your current position.
What You Should Know About Waiting Periods
Eligible policyholders submitting claims for long-term disability benefits may be required to wait through an elimination period before their insurance provider will begin issuing benefits payments. In order to qualify for long-term disability, recipients may be required to exhaust any other compensatory options available to them, such as paid sick leave, vacation time, and short-term disability benefits.
Different insurance plans provide different options regarding the length of mandatory elimination periods. Plans with lower monthly premium costs may require policyholders to endure longer elimination periods, should they eventually need to claim long-term disability benefits.
Caps in Your Policy May Decrease the Percentage of Income You Replace
Many long-term disability plans impose some type of cap on the amount of monthly benefits payments eligible policyholders receive. In Canada, most long-term disability plans replace 60-70% of a recipient’s normal income.
However, if your insurance policy caps monthly benefits payments at a certain amount, some employees may not be able to receive the full 60-70% of their monthly wages. If an insurance policy’s payment cap is lower than 60-70% of a benefits recipient’s regular salary, they may simply be issued the highest monthly payment amount offered by their insurance company.
Paying Taxes for Long-Term Disability Benefits Payments
Many large companies offer some sort of disability insurance through their group insurance plan. In some cases, employers may even pay all or part of the policy’s monthly premiums.
If that is the case, employees who collect long-term disability benefits payments will most likely be required to pay taxes for any benefits they receive.
On the other hand, a self-employed individual with a private insurance plan, or an employee who pays their own insurance premiums will not be required to report any benefits they receive as taxable income.
Contact Preszler Injury Lawyers Today
If you need assistance filing a claim for long-term disability benefits, or a claim you filed has been denied, Preszler Injury Lawyers may be able to review the terms of your policy and explain any options that may be available to you. Call Preszler Injury Lawyers today at 1-800-JUSTICE for a free, initial consultation.
