Many people are confused about the differences between LTD benefits and CPPD benefits and how it applies to their particular situation. You may even be instructed by your LTD insurer to apply for CPPD and be left wondering whether you should, or must, apply.
What are the Differences?
LTD insurance is either provided to an employee in their group benefit plan or purchased privately by an individual. The insurance protects an employee from loss of income in the event they are unable to work due to injury, illness or accident for a period of time beyond Short Term Disability (STD) or Employment Insurance Sick Benefits. There is a 2 year time limit to sue the LTD insurer from the date benefits should have been paid.
CPPD is the largest long term disability insurance program in Canada administered by the Federal Government. CPPD benefits provide partial income replacement to people who have made enough contributions to the Canadian Pension Plan (CPP) and who are disabled and cannot work at any job on a regular basis. Benefits may also be available to their dependent children. To qualify for a disability benefit under the CPPD, a disability must be both “severe” and “prolonged”, and it must prevent you from being able to work at any job on a regular basis.
LTD and CPPD both are intended to protect or replace your earnings when a disability prevents you from working. A disability can be caused by anything. Included are an accident, illness, sickness, physical or mental health symptoms.
How Do CPPD and LTD Work Together?
LTD insurers often require you to also apply for CPPD, to try to reduce or eliminate the amount they must pay out. This is because LTD providers generally create their contracts, such that an injured worker’s benefits are decreased by any amount paid by CPPD.For example, if your LTD claim is approved for $2,000 a month, and you are also approved for CPPD for $1,000 a month, you will not receive a total of $3,000. Your actual total monthly benefits will remain at $2,000 – your monthly LTD obligation amount would decrease according to a mathematical formula.
Should I apply for CCPD in addition to LTD?
Yes. You may wonder whether there is a point in applying for CCPD if their LTD benefit is just going to be reduced. However, there are a few reasons why you should apply for both:
- If you do not apply for CPPD, the LTD provider may reduce your LTD benefit by a notional estimated CPPD.
- An LTD provider may argue that a claimant has breached their contractual obligation by not applying for CPPD and stop the LTD benefit.
- Having a successful CPPD application means you have proven to the government that your injury is severe and prolonged. Thus, it would be harder for the LTD provider to argue that your disability is not serious enough to prevent you from working.
- If you have a successful CPPD application, you will at least get these benefits if your LTD benefits are denied.
If you are struggling with the applications for your LTD and/or CPPD, an experienced disability lawyer will be able to assist in interpreting the terms of your policy, assist with the application process and put you in a better position to collect benefits.
What can I do if my CPPD application is denied?
If you disagree with the decision, you can request a review. This must be done in writing within 90 days of receiving your decision letter. If your CPPD application is denied, an LTD provider cannot reduce the LTD benefit by an estimated CPPD because you did not receive it.
Contact An Experienced Disability Lawyer
If your LTD or CPPD application was denied, or your benefits were cut off, you should contact an experienced disability lawyer. This could lead to a significant claim if the provider denied a legitimate benefit application. Alternatively, the involvement of a knowledgeable lawyer could cause the provider to reinstate your benefit.
If you feel that you or a loved one has been wrongfully denied an LTD or CPPD claim, please contact Tony Lafazanis. Don’t take risks with the insurer or the Court system. Time limits apply. Let Tony fight for you!
Hiring Tony Lafazanis is risk free. There is no legal bill to pay, if there is no settlement.
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Sources:
https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-disability-benefit.html
https://www.canada.ca/en/financial-consumer-agency/services/insurance/disability.html
