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How Much Does Long-Term Disability Insurance Cost?


In some cases, long-term disability insurance coverage can be very affordable, especially taking into account the high payment amount you may receive should a sudden injury or illness prevent you from earning an income. Depending on the disability insurance plan, you can pay between 1% and 9% of your salary.

On average, most Canadian insurance providers grant eligible recipients of long-term disability benefits between 60-70% of their regular income. However, the monthly cost of your policy, or premium, may be determined by a number of different factors, which might increase the cost.

While some insurance providers offer different policies with lower payment requirements to fit within a policyholder’s budget, paying lower monthly premiums may result in an inability to claim long-term disability benefits, should they come to require them.

Factors that May Affect the Price of Monthly Insurance Premiums

Some policyholders have access to a group long-term disability policy through their employer. Group policies tend to offer less expensive premiums. Additionally, certain employers may pay a portion of their staff’s premiums, or cover the entire amount. Doing so might greatly reduce the cost of this type of policy.

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If you are self-employed or do not have access to a group long-term disability benefits through your employer, you may be able to access a group coverage plan through your labor union or other occupational organization. Alternatively, you may choose to purchase your own individual policy, which may affect the cost of your monthly premium.

How Much Coverage You Need Will Impact Your Costs

The cost of your plan will be determined, in part, by how much your monthly benefit will end up being, relative to your income. The more of your monthly salary you want your benefits to cover, the higher the premium will be.

It’s best for you to calculate how much of your income is necessary to cover your bills for an extended period of time. Having an idea of how much your monthly budget is dedicated to essential bills will help you determine how much coverage you need when choosing potential plans.

The Length of the Elimination Period May Increase Your Costs

Another factor that may affect the cost of your monthly premium is the length of your policy’s “elimination period.” This refers to the length of time between receiving a medical diagnosis prohibiting you from working and actually receiving long-term disability benefits payments. In many cases, claimants may need to first use any available sick leave, vacation pay, and short-term disability insurance benefits before they are eligible to collect long-term disability payments.

In general, policies with shorter elimination periods tend to be more expensive.

You may be able to voluntarily increase the insurance premiums you make to your insurance company in order to qualify for long-term disability benefits earlier than is typically permitted. In these cases, eligible benefits recipients who are unable to claim short-term benefits or to access paid sick leave may be able to shorten the length of time during which they are unable to work without some form of compensation.

Your Long-Term Disability Insurance May Cost More if You Want to Stay in the Same Role

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Certain long-term disability policies may only provide benefits to individuals who are unable to perform the duties of their jobs for a limited period of time. In some of these cases, after receiving disability benefits for a certain amount of time, in order to be eligible to continue collecting payments, benefits recipients may have to submit proof that their medical conditions prevent them from performing the duties of any occupation. Policies that do not include this stipulation may require higher premiums.

Your Chosen Length of Coverage Affects Your Premiums

Costs of long-term disability policies may also be determined by the length of time for which eligible recipients can claim their benefits. Plans can cover a range of time-frames, including five or ten-year plans, or plans that provide coverage to a recipient until the age of 65. Some policies may even continue to pay a reduced amount of benefits payments to eligible recipients after the age of 65. Generally speaking, plans covering longer periods of time may be more expensive.

Other Options for Affordable Compensation

If you are not immediately able to qualify for long-term disability benefits but are unable to earn a living because of your medical condition, you may be eligible to apply for Canada Pension Plan (CPP) disability benefits.

Challenging Denied Benefits Claims

Even if you are eligible to receive long-term disability benefits and you or your employer has paid the required monthly premiums, your insurance company may still deny your claim. If you believe your claim for benefits was unfairly denied, a long-term disability claims lawyer may be able to help you appeal the insurance company’s decision. Appeals may be made directly through the insurance provider, or externally in court.

If you decide to file a lawsuit against your insurance provider for a wrongfully denied claim for long-term disability benefits, in accordance with the province’s Limitations Act, 2002, S.O. 2002, Chapter 24, Schedule B, you have only two years from the time you were notified about their decision in order to pursue legal action.

Talk to Preszler Injury Lawyers Today

If you or your employer paid your insurance policy’s monthly premiums and you qualify for long-term disability benefits, for a number of reasons, an insurance company may still deny your claim. If your claim has been unfairly denied, contact Preszler Injury Lawyers to discuss legal options that may be available to you. For a free, initial consultation, call Preszler Injury Lawyers today at 1-800-JUSTICE.

 
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