Are you employed? (Not self-employed, and not contract based?)
If your employer offered you a hiring package that included group health benefits, with a life insurance policy, and some accidental death and dismemberment coverage, you might feel like you’re in a pretty good spot. Ideally, this hiring package also holds a long-term disability policy (LTD for short). But while this can be better than having no kind of benefits at all, there are a lot of ways things can go wrong, and you don’t deserve to be working under a false sense of security.
Let's answer these questions to learn if your employer’s long-term disability policy is good enough for you. Don’t worry if you realize your existing LTD policy falls short of your expectations, as I’ll link you the solution below. Let’s begin:
- If you injured yourself at work, would WSIB cover you?
- If you were to contract an irreversible health condition, like MS perhaps, would your LTD policy cover you?
- If you were in a car accident and sustained a severe injury in the crash, would your LTD policy cover you?
- What if you were injured while on vacation?
- What if you broke your leg at home because you fell in your backyard?
- What if you had a heart attack, stroke, or diabetic incident?
- Here’s a complicated one: what if your heart attack, stroke or diabetic incident caused cognitive damage, and you were unable to perform specific duties within the scope of your employment?
Now, hands up if you have no idea. Hands up if you would have to rifle through your papers to know for sure. But, it’s probably the case that your long-term disability policy should cover all of this... right?
The short answer is: Maybe.
The long answer is: What does the contract say?
The above questions were just to get you prepared. The real checklist is here, and it may be uncomfortable to read. Let’s ask yourself:
- Did you write your contract?
- Did you secure it, or did another individual or entity do that?
- Did you sit in on the meeting with the insurance company and your employer?
- Were you part of the decision making process?
- Do you pay all of the premiums, or just your portion?
- Who is the owner of the policy?
- Are there cost-of-living increases if you were to go on a claim?
- If you are unable to perform your employment duties, are you going to lose your job?
- Would you lose your benefits if you couldn’t perform your employment duties?
If you’re unsure about any of the above, let’s review the facts about your long-term disability policy below. The facts are not pretty. But at least you're finally getting the truth.
- You do not hold ownership to any part of your LTD policy.
- Your employer or the insurance company can cancel the LTD policy at any time.
- The group benefits provider can absolutely change - there is no guarantee that they will take on the current risk because of the claims experience seen within the organisation.
- The cost is subject to change, and you have no control over the pricing as an employee.
- You do not hold control over the income maximums that are assigned.
- There is no guarantee that your income, when on a claim, will increase. Your wages in 2030 may be at a 2018 level.
- After 24 months, it is possible for termination of your employment to take place if you are deemed disabled and unable to perform your employment duties.
Bottom line: it’s not a great outlook.
...So knowing this, what can you do? What control do you have?
If you’d like your long-term disability policy to work for you instead of your employer, speak to your life insurance broker and look into a standalone long-term personal disability insurance policy.
With a standalone personal disability insurance policy, here's what you can control:
- Your price will not change at any time after the policy comes into effect. You can keep it in place until you are 65 years of age and not see a premium increase - even if you make a claim.
- You hold complete ownership of the policy.
- Without your express consent, the contract cannot be cancelled.
- If you so choose, because you control what additions are combined with your agreement, you can cover cost of living increases.
- Again, because you manage what additions are made to your policy, your profession will be protected, and your benefits will not cease after 24 months just because you can work in another job.
- How much income you receive is decided by YOU at the time of application.
If you’d like to have a chat about your options, let me know your situation here and we’ll start a conversation.
If you’d like to look at your own LTD first, to see if it's really all that bad, I definitely encourage you to do so. Just bookmark this page first for when you finish. ;)