The following is a list of terms you might come across during the claims and litigation process:
Total Disability – Short-Term Disability (STD Benefits) – STD insurance pays a percentage of your regular wages for a period generally ranging from three to six months. There is generally a waiting period between the occurrence of the disability and when the payment of STD Benefits begins – ranging from zero to seven days. The definition of disability differs among insurance companies.
Total Disability – Long-Term Disability Benefits (LTD Benefits) – You might have private disability insurance through a plan you purchased on your own or group insurance provided by your employer through a group plan. While each policy/plan has different provisions and definitions, many provide that during the first 24 months, you are considered totally disabled if you cannot perform the duties of your job. After 24 months, you are considered totally disabled if you cannot perform the duties of any job.
Elimination Period – For LTD Benefits, there is a waiting period – normally called the elimination period, that begins before the payment of your benefits begins. The elimination period starts the day you become disabled and is typically 90 days to 120 days. Depending on the plan or policy, the elimination period might coincide with the period during which STD benefits are paid.
Benefit Period – The time during which you receive your benefits. The benefit period will end when you recover from your disability or when you reach a certain age.
Claim Form – When you become disabled, your insurer will ask that you complete a claim form containing all the information the insurer needs to assess your claim. With a group insurance claim, your employer will also be required to fill out a form. With both private and group insurance, your doctor will also have to fill out a form and submit it to your insurer.
Cost of Living Adjustment (COLA) – This provision provides that disability insurance benefits will be paid to account for increases in your cost of living.
Taxable/Non-Taxable Benefits – If you pay the premiums, it is likely that your benefits will be non-taxable. If your employer pays all or part of the premiums, however, it is likely that all or a portion of your benefits will be taxable.
Mortgage Disability Insurance – This insurance covers your ongoing mortgage payments for a specified time should you become disabled due to illness or injury. It might form part of your group plan or you might have purchased it through your lender when you obtained the mortgage.
Aggravated Damages – If you sue your insurer and you can establish that the insurer breached the insurance policy thereby causing you mental distress, the court can award you additional compensation in the form of aggravated damages.
Punitive Damages – An award made to punish the insurer. A disability policy contains an implied contractual duty of good faith. Punitive damages might be awarded by the court for a breach of that duty of good faith and are in addition to the breach of contract to pay benefits. Punitive damages might be awarded in situations where the insurer’s misconduct is so malicious, oppressive, and high-handed that it offends the court’s sense of decency.
Medical Examination – The policy might entitle the insurer to have you undergo a physical or mental examination. During the litigation process, the insurer can ask the court to grant an order for your physical or mental examination where your physical or mental condition is in question.
Offsets/Co-ordination of Benefits – Under your policy, certain payments received from other sources – CPP disability benefits, for example – might be directly offset from your disability benefits, while other payments might be co-ordinated with your disability benefits such that your disability benefits could be reduced based on a formula contained in the policy.