Disability News

What’s the Difference Between Short and Long-Term Disability Insurance?

There are a host of conditions, illnesses, injuries, and more that may require you to stop working. Sometimes, this will only last a few weeks or months; other times, it’s a long-term situation. Either way, you’ll likely require some sort of financial support during this time, which is where disability insurance comes in.

Understanding the differences between short-term and long-term disability insurance is crucial to protecting your financial stability in the event of an illness or injury. While both types of insurance provide benefits when you cannot work due to a disability, they differ in the duration of coverage and the types of conditions they cover.

Short-term disability insurance typically covers temporary conditions that keep you out of work for a few weeks to several months, while long-term disability insurance provides benefits for more severe or permanent conditions that will last much longer or become permanent. Read on to learn more about disability insurance and the differences between short and long-term disability so that you understand when you decide to apply.

What is Disability Insurance?

Disability insurance is a type of coverage that provides financial protection when you cannot work due to an illness, injury, or medical condition. It replaces some of your income, helping you pay your living expenses and keep your standard of living during your recovery period.

When you have disability insurance, you pay premiums to the insurance company. If you become disabled and unable to work, you can file a claim with the insurer. Once your claim is approved, you’ll receive benefits, typically a percentage of your pre-disability income, for a certain period or until you’re able to return to work.

Examples of conditions that may qualify for disability benefits include:

• Physical injuries: Broken bones, torn ligaments, or severe back injuries resulting from accidents or falls.
• Illnesses: Serious illnesses such as cancer, heart disease, or stroke that require extensive treatment and recovery time.
• Mental health conditions: Debilitating mental health issues like major depression, anxiety disorders, or post-traumatic stress disorder (PTSD) that significantly impact your ability to work.
• Chronic conditions: Progressive diseases like multiple sclerosis, rheumatoid arthritis, or lupus that may worsen over time and affect your ability to perform your job duties.

Disability insurance ensures that you can continue supporting yourself and your family while you focus on your health and recovery. It is an essential consideration for anyone who relies on their income to maintain their livelihood.

Unfortunately, it can become difficult for even perfectly eligible people to get their benefits approved. Insurance companies will find any reason they can to deny a claim, often rendering the services of a good disability lawyer necessary.

What is the Elimination Period?

The elimination period is the length of time between the start of your disability and when you can receive disability benefits. It’s important to note that the “onset” date is when you started suffering from the disability, not the date you first filed your claim.

The elimination period is a predetermined amount of time, usually ranging from 30 to 180 days, during which you must be continuously disabled before your disability benefits kick in. The purpose of the elimination period is to ensure that disability insurance covers long-term disabilities rather than minor, short-term conditions.

The length of the elimination period can vary depending on your insurance policy and the type of disability coverage you have. Generally, longer elimination periods result in lower insurance premiums, as the insurer is not responsible for paying benefits during this time.

Covering the Gap with Short-Term Disability Benefits
Some employers provide short-term disability insurance as part of their benefits package to bridge the financial gap during the elimination period. Short-term disability coverage typically provides benefits for a limited period, usually 3-6 months, and may have a shorter elimination period, such as 7-14 days.

If you have both short-term and long-term disability insurance, you can use your short-term benefits to cover the elimination period for your long-term disability coverage. This way, you can maintain a steady stream of income while waiting for your long-term benefits to begin.

When choosing a disability insurance policy, carefully consider the length of the elimination period and how it aligns with your financial situation and risk tolerance. Understanding the elimination period and its implications can help you make informed decisions about your disability insurance coverage. It also means you won’t be left with any surprises should you become disabled and need to file a claim.

What is Short-Term Disability?

Short-term disability is when you cannot work due to an illness or injury for a limited period – usually between 3-6 months. Anything longer than that, and it’s no longer considered short-term. This can be the result of something that happened anywhere – whether you were at work or not.

Examples of short-term conditions or illnesses include:

• recovery from surgery
• an autoimmune flareup
• a serious injury
• acute illnesses like pneumonia or appendicitis
• the onset mental health conditions such as anxiety or depression or trying to deal with reoccurrence of mental health related concers
• pregnancy-related complications or recovery from childbirth
• a cancer diagnosis

While STD insurance can provide much-needed financial relief during a difficult time, it’s important to be aware that insurers may sometimes try to deny claims. Common reasons for denials include:

Pre-existing conditions: If your disability is related to a condition you had before enrolling in the insurance plan, your claim may be denied.

Insufficient medical evidence: Insurers may require extensive medical documentation to prove the severity and validity of your disability.

Not meeting the definition of disability: Your condition must meet the insurer’s specific definition of disability to qualify for benefits.

Missed deadlines: If you fail to submit your claim or supporting documents within the required timeframe, your claim may be denied.

To minimize the risk of denial, provide thorough and timely documentation, follow your doctor’s treatment plan, and communicate openly with your insurer. If your claim is denied, consider seeking the help of a disability lawyer. They can help guide you through the appeals process and fight on your behalf for the benefits you deserve.

What is Long-Term Disability?

Long-term disability (LTD) is when you are unable to work due to a severe illness, injury, or medical condition that persists for an extended period – or sometimes permanently. Not being able to return to work at all is particularly devastating, especially if you have a family to support.

Examples of long-term illnesses and conditions include:

• an illness that does not improve
• an autoimmune condition that does not improve
• depression that does not improve
• anxiety that does not improve
• a mental illness that does not improve
• chronic illnesses like multiple sclerosis, rheumatoid arthritis, or Crohn’s disease
• Serious mental health conditions such as major depression, bipolar disorder, or schizophrenia
• Debilitating injuries like spinal cord damage or traumatic brain injury
• Progressive diseases such as Parkinson’s, Alzheimer’s, or ALS (Lou Gehrig’s disease)
• Cancer and other critical illnesses requiring extensive treatment and recovery
• Cancer can profoundly impact a person’s mental well-being, causing anxiety, depression, and an overwhelming fear of the unknown as they grapple with the uncertainty of their prognosis and the challenges of treatment – hence being unable to work

While LTD insurance is designed to provide long-term financial support, insurers may sometimes attempt to deny claims. Common reasons for denials include:

Insufficient medical evidence: Insurers may require extensive medical records, test results, and physician statements to prove the severity and long-term nature of your disability.

Failure to meet the definition of disability: Your condition must meet the insurer’s specific definition of total or partial disability to qualify for benefits.

Non-compliance with treatment: Your insurer may deny your claim if you don’t follow your doctor’s treatment plan or attend regular check-ups.

They simply believe you can work: Disability insurers will often take the position that, despite medical evidence to the contrary, you can return to work in some capacity or may be able to work in a different job or position – even if you’re still unable to.

What’s the Difference Between Short-Term Disability and Long-Term Disability Insurance?

Both short-term disability (STD) and long-term disability (LTD) insurance provide financial protection when you cannot work due to a medical condition. Both can provide anywhere from 50-100% of your pre-disability income, depending on the policy you have.

Short-term disability insurance and long-term disability insurance differ in several ways, mostly in terms of qualifying for disability benefits, the duration of benefits, the payment amounts, and the complexity of the claims process.

When it comes to qualifying for short-term and long-term disability in Canada, there are some notable differences. Short-term disability typically has less stringent eligibility criteria, and you may only need to provide basic medical evidence from your doctor to qualify. The definition of disability for short-term coverage is often broader, covering a wider range of conditions that prevent you from working, even if you’re expected to recover within a few months.

In contrast, long-term disability has more rigorous qualification requirements. You’ll need to provide more substantial medical evidence, often from multiple healthcare providers, to demonstrate the severity and duration of your disability. The definition of disability for long-term coverage is usually narrower and more specific, focusing on conditions that significantly impact your ability to work in your own occupation or any occupation, depending on the policy. Insurers will assess whether your disability is likely to be prolonged or permanent, as long-term disability benefits are intended to provide ongoing support for those with more severe and long-lasting impairments.

Regarding the duration of benefits, most disability insurance policies in Canada provide short-term disability coverage that typically lasts between 3 to 6 months. The exact duration of the short-term disability benefit can vary depending on the specific insurance provider and the terms of the individual policy. However, this 3-6 month range is generally considered the industry standard for short-term disability coverage under Canadian disability insurance plans.

Long-term disability insurance in Canada typically lasts until age 65, when retirement benefits begin. However, some policies (although rarely) may have a specified maximum benefit period, such as 2, 5, or 10 years. The duration depends on the specific policy terms and the nature of the disability.

Regarding payment, many short-term disability policies often provide a higher percentage of your income compared to long-term disability. STD policies typically cover 60-70% of your regular wages, although some policies may provide up to 100% income replacement. The higher benefit percentage is intended to help you maintain your standard of living during your brief temporary absence from work.

In some cases, employers may fund their own STD programs, which can result in even higher benefit percentages. These employer-sponsored plans may offer 100% income replacement for a specified period, such as the first few weeks or months of your disability. This additional support from your employer can provide greater financial stability during the initial stages of your disability.

On the other hand, long-term disability benefits, particularly benefits issued through group policies, are usually lower than STD benefits, typically replacing 60-70% of your income. The lower benefit percentage reflects the extended duration of LTD coverage, which can last until age 65 or for a specified period. LTD benefits are designed to provide ongoing financial support if your disability persists, helping you maintain a portion of your income while you cannot work.

What is the Most Important Difference between Short and Long-Term Disability?

When trying to understand the differences between short and long-term disability insurance, there is one crucial difference that you should know and understand – which is the difference between the “own occupation” period and “any occupation” period.

Most disability insurance policies in Canada mandate that a claimant must meet the definition of “total disability.” A claimant has the onus of proving that he or she is disabled by meeting the definition of “total disability” within their own individual insurance policy.

What’s the Difference Between “Own Occupation” and “Any Occupation,” and why does it matter?

The key differences are as follows:

During the “own occupation” period, you are considered disabled if your medical condition prevents you from doing the main duties of your regular job, even if you can still work in another capacity. For example:

• A surgeon who develops a hand tremor and can no longer do surgeries but could still teach or consult would be considered disabled under the “own occupation” definition.
• An accountant who experiences severe back pain and cannot sit at a desk for extended periods but could work in a less sedentary job would qualify as disabled during the “own occupation” period.
• An office worker with breast cancer who cannot focus on the tasks of her job due to pain and brain fog.
• A teacher with bipolar disorder that is difficult to control with medication.
• A worker with mental illness who cannot function well due to his or her chronic symptoms.

The “own occupation” period typically lasts two years.

After two years, the definition of total disability, in most, if not all policies, changes to that of “any occupation”. This means that your disability must impair your ability to work at any occupation for which you are suited by way of education, training or experience. For example:

• An architect who suffers a severe brain injury and can no longer perform complex design work but could potentially work in a less demanding clerical position may not be considered disabled under the “any occupation” definition.
• A factory worker who sustains a permanent back injury and cannot perform any type of physical labour or sedentary work would likely continue to qualify for benefits during the “any occupation” period.
• A truck driver who develops a serious eye condition.
• A commercial HVAC worker with epilepsy.
• Someone undergoing

To protect your rights and benefits during the “any occupation” period, it’s crucial to have strong medical evidence supporting your ongoing disability. You may also want to enlist the help of a disability lawyer. An experienced disability lawyer helps you navigate the complexities of the claims process, advocate on your behalf, and fight any attempts to unfairly terminate your benefits.

Do the concepts of “own occupation” and “any occupation” apply to both short-term and long-term disability?

When you start receiving short-term disability after the elimination period, you only need to prove that you cannot satisfy the definition of total disability in terms of your “own occupation.” In most, if not all cases, short-term disability only lasts between 3 to 6 months. The exact duration can vary depending on the specific policy and insurance provider, but this 3-6 month range is generally considered the standard for short-term disability coverage. Therefore, a claimant would never reach the 24-month mark or change of definition while receiving short-term disability benefits.

With that said, it’s important for individuals to carefully review the terms and conditions of their disability insurance policy to understand the specifics of their short-term and long-term disability coverage. This can help ensure they are prepared if they need to file a disability claim.

Have You Been Denied Long-Term Disability?

For decades, our experienced team of long-term disability lawyers has been dedicated to defending the rights of those unfairly denied benefits. We understand the physical, emotional, and financial toll that the loss of income and benefits can take on individuals and families alike. Our goal is to ensure you receive the disability benefits you deserve. We’ll work on this while you simply focus on healing and recovering.

If you or someone you know is struggling to navigate an illness or injury, we’re here to help. Our services are here to secure the benefits you need and offer financial support as you heal.

Based in Hamilton, Ontario, our firm assists disability claimants across the nation.

We offer free consultations to Ontario residents or anyone else in Canada. Reach out to us at 1-844-4-DISABILITY or confidentially via our website for a no-cost discussion about your rights and options for the duration of your disability.