Should employees or the employer pay the LTD premium?

Employees, in almost every case. When the employer pays LTD premiums, any benefit paid at claim time is taxable income. When employees pay them with after-tax dollars, the benefit arrives tax-free. For someone on claim for years, that difference is enormous — far larger than the modest payroll cost of the premium itself. It is one of the most common and most expensive mistakes we find on inherited plans.

What is a non-evidence maximum and why does it matter?

It is the amount of life or disability coverage available without medical underwriting. Coverage above it requires an application and health questions — and in practice a meaningful share of employees never complete them. So an owner or senior manager who believes they have three times salary in coverage may only actually have the non-evidence maximum. We check this on every takeover, and it is uncomfortable how often it is wrong.

Our employee’s disability claim was denied. Can you help?

Often, yes. Denials frequently turn on the definition of disability, the pre-existing condition clause, or missing objective medical evidence rather than on the merits. We read the policy wording, work with the member and their physician on what the carrier actually requires, and escalate through the appeal process. We have had denials reversed — not always, but often enough to always try.

Solutions

Disability, Life & Critical Illness

This is the coverage nobody thinks about until the worst week of someone’s life. It is also the coverage where fine print is not fine print — the definitions are the entire product.

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What it actually is

The coverage nobody thinks about until the worst week of their life.

Short-term disability replaces income for weeks; long-term disability replaces it for years, sometimes to age 65. Group life and AD&D pay a lump sum on death. Critical illness pays on diagnosis of a covered condition, regardless of whether the member can still work. Every one of them is governed by wording most employers have never read until a claim is denied.

What you get: Claims that pay the way you were told they would.

Coverage

What sits inside this benefit

Each of these is a decision, not a default. Most plans inherit them from a template and never revisit them.

Short-term disability (STD)

Bridges the gap between sick leave and long-term disability, typically for 15 to 26 weeks. Often coordinated with Employment Insurance sickness benefits, and sometimes better replaced by a self-administered salary continuance plan.

Long-term disability (LTD)

The most important benefit most employees will never think about. Definition of disability, elimination period, benefit percentage, maximum and offsets against CPP and other income all determine whether a claim actually pays what people assume it will.

Group life and AD&D

A multiple of salary or a flat amount, with accidental death and dismemberment layered on. The number that matters is the non-evidence maximum — coverage above it requires medical underwriting that key people frequently never complete.

Dependent life

Modest coverage on a spouse and children. Inexpensive, rarely claimed, and disproportionately appreciated when it is.

Critical illness

A tax-free lump sum on diagnosis of a covered condition — cancer, heart attack, stroke and others. It funds the costs a disability benefit does not: travel for treatment, a spouse taking unpaid leave, home modification.

Where the money moves

The levers we actually pull

Read the LTD definition of disability: how long “own occupation” lasts before it shifts to “any occupation” changes the practical value of the benefit enormously.
Model the offsets. A 66.7% benefit that is reduced by CPP disability and other income can land far below what employees expect.
Set the non-evidence maximum high enough that senior people are actually covered without underwriting they will not complete.
Decide who pays LTD premiums: employee-paid premiums make any future benefit tax-free, which is almost always worth more than the payroll saving.
Check the pre-existing condition clause and the waiver-of-premium provision — both routinely surprise people at claim time.

What drives the cost

Disability rates track industry classification, average age, gender mix and salary levels far more than claims history for small groups. Life rates are age-driven and generally stable. The volatility employers feel usually comes from a change in workforce composition, not from the carrier.

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Straight answers

Questions employers actually ask us

No hedging. If the honest answer is “you do not need us for that,” that is the answer you will get.

Ask us something else

: Employees, in almost every case. When the employer pays LTD premiums, any benefit paid at claim time is taxable income. When employees pay them with after-tax dollars, the benefit arrives tax-free. For someone on claim for years, that difference is enormous — far larger than the modest payroll cost of the premium itself. It is one of the most common and most expensive mistakes we find on inherited plans.
: It is the amount of life or disability coverage available without medical underwriting. Coverage above it requires an application and health questions — and in practice a meaningful share of employees never complete them. So an owner or senior manager who believes they have three times salary in coverage may only actually have the non-evidence maximum. We check this on every takeover, and it is uncomfortable how often it is wrong.
: Often, yes. Denials frequently turn on the definition of disability, the pre-existing condition clause, or missing objective medical evidence rather than on the merits. We read the policy wording, work with the member and their physician on what the carrier actually requires, and escalate through the appeal process. We have had denials reversed — not always, but often enough to always try.