Long-Term Disability Insurance (LTD)

Do you work in a high-risk environment? If so, you are not alone. There are thousands if not millions of high-risk jobs in Canada. These jobs are spread out across a broad range of industries, including logging, steel, agriculture, construction, hydraulic fracking, and health care. All of these industries employ thousands of workers across the country. 

While the people in the industries listed above are at the highest risk for workplace injuries, every worker has some level of risk. The highest risks are related to fall injuries, followed by lacerations, lifting injuries, and workplace violence. When many people think of high-risk jobs, they do not give much thought to violence in the workplace. 


Workplace Fatalities

According to the Canadian worker’s compensation agencies, nearly 1,000 fatalities occur in the workplace each year. These fatalities are related to the victims’ jobs. 

A study deemed “Work-Related Deaths in Canada” did not agree with the Association of Worker’s Compensation Board of Canada (AWCBC) statistics. The authors said AWCBC should not base work-related injuries only as a “benchmark.” AWCBC work-related fatality statistics are based only on worker’s compensation claims, allowing thousands of work-related deaths to be excluded.

The authors argued that thousands of workers’ deaths are not included in the “occupational health and safety” statistics because they were not approved-compensation claims. These fatalities are still related to the workplace but without the worker’s compensation claims. 

The authors of the study believe the statistics should also include work stress-induced suicides, occupational diseases, and commuting fatalities.


LTD Insurance

LTD insurance is specifically put in place to protect workers who are injured on the job. Sometimes LTD can be combined with short-term disability insurance, which kicks in following a claim investigation. Short-term and long-term disability policies have a coverage deadline. With short-term disability, the average coverage period is two years. Some policies will offer an extended coverage period of three years. But, rarely do any employer-sponsored short-term disability plan longer than three years.

LTD insurance has a coverage period between five and 10 years. If you have short-term disability coverage and are injured on the job, it will offer short-term financial protection until your LTD policy kicks in. This will give you a longer coverage period, which is why both disability plans are highly recommended to all Canadian workers.


Most Common Diagnoses Related To Disability Claims

All kinds of workplace injuries are covered by employer-approved and supplementary disability plans. But, the most common diagnosis related to disability claims is back pain, followed by muscle and tendon disorders, and last but not least hand, foot, and ankle disorders.

The most common disease diagnoses related to disability claims are cancer, followed heart disease, stroke, diabetes, and mental health disorders. All of these conditions can be debilitating for all workers.

Worker disabilities are the number one cause of financial collapse for many households. This is especially true when only one member of the household is working. In 2015, it was reported that only 35% of Canadians contributed to a Registered Retirement Savings Plan (RRSP). So, very few workers in Canada could financially support their family even for a short period of time if they lost their job due to a disability.

If you are not contributing to an RRSP, you should at least carry LTD insurance. Most employers allow their employees to have their disability and other health care insurance premiums deducted from their wages.


How Much Are Long-Term Disability Premiums

LTD premiums are generally very affordable. There are several factors insurers utilize to determine a worker’s LTD premiums. These factors include age, gender, tobacco status, occupation, income, and health. Workers who use tobacco regularly, have pre-existing health conditions, over the age of 40, and work in dangerous industries are considered high-risk. These workers will pay slightly higher premiums than other workers.

A full-time worker can expect to pay anywhere between $1,000 and $2,000 each year for disability insurance coverage. Premiums for most workers is between 1 and 3 percent of their salary.

Other cost factors include benefit period, pay level, and provisions, known as riders. There are three basic LTD insurance provision riders, including Cost of Living Rider (COLA), enhanced partial disability, and future increase option. All of these riders can impact your disability insurance premiums.


Disability Benefit Period

As mentioned above, the average coverage period for LTD is about 5 years, generally no longer than 10 years. If you have questions about the LTD benefits period, you can always reach out to the insurance experts at ProfessionalsCoverage. A qualified agent will assist in answering all of your questions. If additional coverage is needed, the agent will work with you to create a customized disability policy that is specific for your needs and preferences.


Disability Insurance Provisions Or Riders

As mentioned above there are three primary types of disability insurance riders, including enhanced partial disability, COLA, and future increase option. All of these riders are optional but very beneficial. The benefit of disability insurance riders is it combines a basic disability policy with additional coverage.

Enhanced partial benefit rider is exactly as its name entails. It provides partial payments if a worker is certified as partially disabled. This rider is generally included in most LTD policies. COLA rider, on the other hand, works by increasing the worker’s disability benefits. In most cases, COLA increases the worker’s disability benefits by 3% per year. The 3% benefit adjustment covers the cost of inflation.

Last, but not least, future increase option provision. This rider allows workers on disability benefits to increase their coverage at a later date without being required to redo the application process.

If you are looking for a disability policy that costs less, you should opt for a low-level policy that does not offer one or all of the above provisions or riders. If you can afford it and work in a high-risk environment, paying higher premiums for disability insurance coverage will definitely pay off if you are ever injured on the job.


Tax-Free Employer-Sponsored LTD Coverage

Many employers know the risk their employees take each minute of the day to perform their job duties to the fullest. One way they repay their employees is through long-term disability insurance. If you are lucky enough to have this option, you should definitely opt-in immediately. The greatest benefit of employer-sponsored long-term insurance is workers are not burdened down with the full costs. The employer will opt to pay a portion or all of the cost, just to make sure their workers are fully covered in the event they are involved in a workplace accident.

The downside to employer-sponsored LTD insurance is it is very limited. Workers cannot add riders to their employer-sponsored LTD policies. They really do not have a say-so other than opting in or out. 


What Does Partially Disabled Mean?

Workers who are injured in the workplace are declared partially or fully disabled at some point. The goal is for the injured employee to return to work as soon as possible. Sometimes, returning to work is off the table. The only option here financially is disability benefits. 

When workers sustain minor injuries in the workplace, their odds of returning to work full-time are higher than workers who sustain moderate to severe injuries. There are always a few workers who cannot return to their normal job position. These workers may be declared partially disabled. The disability benefits option in these cases is a partial disability. The partially disabled worker will work a job that probably pays less than his/her previous position. To help cover expenses, the worker will also receive partial disability benefits. 

To qualify for partial disability, workers must earn less than 80% of their “pre-disability” income. This is the amount the worker earned prior to the workplace accident.


Do Workers Who Receive Disability Benefits Have To Continue Paying Premiums?

Fortunately, no, once you are deemed eligible to receive disability benefits, you will no longer be required to pay premiums. To avoid paying premiums, your disability policy must have a “waiver of premium” clause. This will allow you to skip the premiums once you start receiving disability benefits.


Disability Benefits Exemptions

Insurers have the right to exempt some diagnosis from their LTD plans. The most common exceptions among LTD insurers are back pain, cancer, uncontrolled diabetes, ALS, mental illness, obesity, and drug- and alcohol-related problems.

Pregnancy-related disabilities are also almost always exempt from disability benefits. 


Other Options

Part- and full-time workers, as well as self-employed workers, have options outside of employer-sponsored disability plans. If you have questions about these options, you can contact the disability insurance experts at ProfessionalsCoverage. An agent will work with you to customize a plan that will accommodate your every insurance need.

You would like a quote, just fill out the free quote form on the ProfessionalsCoverage website. You will receive an average quote within minutes. This quote will give you an idea of how much your premiums will be for disability insurance coverage. Remember, the more insurance coverage you have in the event of a workplace accident, the more prepared you will be to protect your lifelong investments.


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