When agreeing to a long-term disability (LTD) policy with your employer in Ontario, understanding the intricacies of the documents involved is crucial. Agreeing to a policy without fully comprehending the terms can have significant implications for your financial security in the event of an illness or injury.
Long-term disability policies are designed to provide income replacement if you are unable to work due to a serious illness or injury. These policies, which often form part of an employee’s benefits package, can vary widely in their coverage, terms, and conditions. Knowing what to look for and what to avoid can help ensure that you are adequately supported by your insurance provider when you need them most.
WHAT TO SIGN
- The LTD Policy Agreement: This is the primary document that outlines the coverage details. There are several components that you want to read over, including the definition of disability, the benefit amount, the waiting period before the benefits commence, and the duration of benefits. Ensure you understand how the policy defines “disability” and whether it covers your specific condition or potential conditions. Confirm the percentage of your salary that will be replaced and any caps on the benefit amount. Note the length of time you must be disabled before benefits begin. Understand how long you will receive benefits if you remain disabled.
- Beneficiary Designation Form: This form specifies who will receive benefits in the event of your death. It’s crucial to complete this to ensure your loved ones are protected. Ensure all details are correct to avoid disputes or delays in benefit distribution.
- Consent to Access Medical Information: Insurers typically require access to your medical records to verify your disability claim. Signing this consent is usually necessary for your claim to be processed. Ensure the scope of the consent form limits access to relevant medical information only related to your disability claim.
WHAT NOT TO SIGN
- Waivers or Exclusions: Sometimes, policies include waivers or exclusions that limit coverage for specific conditions or situations. Signing these without understanding their implications can leave you unprotected. Avoid signing exclusions that broadly limit coverage without specific reasons or conditions clearly defined. Also be cautious of exclusions for pre-existing conditions that are not clearly defined or unfairly limit your coverage.
- Third-Party Claims: The disability for which you are receiving LTD benefits may have been the result of an incident which is subject to litigation.Sometimes, policies will include provisions that obligate you to relinquish a percentage of any settlement or award you receive from this litigation so that the insurer can be paid back for LTD benefits already paid out. While long-term disability insurers may have a common-law right to seek reimbursement of benefits paid if comparable damages are awarded (i.e. any special damages awarded for economic loss), ensure that you do not sign any documents that ask you to relinquish a percentage of the entirety of your litigation compensation.
- Agreement to Terminate or Amend Coverage Without Proper Consideration: Avoid signing any amendments that reduce your benefit amount or duration without a clear understanding and agreement. Do not sign any termination agreements unless you have secured alternative coverage that meets your needs.
If you are uncertain about any aspects of your long-term disability policy, are being asked to sign a document you do not understand, or are denied your claim for benefits, please reach out to the lawyers at JEWELL RADIMISIS JOGRE LL.P for a free consultation.