Long Term Disability (LTD) insurance is a critical safety net for Canadians who find themselves unable to work due to illness, injury, or accident. An important concept in LTD coverage is the waiting period, also known as the elimination period. This is the time between when you become disabled and when your LTD benefits are payable. Understanding this waiting period—and planning for it—is important to your maintaining financial stability during a challenging time. Before making a claim, it is essential to confirm your coverage and eligibility to ensure you meet all requirements and avoid unnecessary delays.

This article addresses:

• Definition of the term elimination period
• Typical waiting periods for LTD benefits in Canada
• What happens during the waiting period
• Financial planning strategies to help you cope
• Common mistakes to avoid
• Key takeaways for Canadians navigating LTD claims

Before applying for LTD benefits, consult with your doctor to confirm you have their support and the necessary medical documentation. This step is crucial for making informed choices throughout the LTD process.

Understanding Long Term Disability Insurance

Long term disability insurance offers crucial financial protection for employees who become totally disabled and unable to work due to an illness or injury. With LTD coverage, individuals typically receive a percentage of their salary—often between 50% and 70%—if they meet the policy’s definition of disability. The waiting period, or elimination period, is the time you must wait after becoming disabled before your benefits begin. This period can vary depending on your policy. It’s important to understand the specific terms of your LTD policy, as the length of the waiting period and the percentage of salary paid as benefits can differ depending on the insurer and the plan. By reviewing your policy details, you can better prepare for what to expect if you ever need to rely on long term disability benefits.

Eligibility for Long Term Disability

To qualify for long term disability benefits, individuals must meet the policy’s definition of being “totally disabled.” This usually means you are unable to perform the essential duties of your own occupation, or in some cases, any occupation for which you are reasonably suited by education, training, or experience. Eligibility requirements can vary depending on the terms of your LTD policy, so it’s important to review your coverage carefully to understand what is required. Proving your disability involves providing detailed medical records and documentation that demonstrate your inability to work.

1. What Is the Elimination Period?

The elimination period, also called the qualifying period, is essentially a time-based deductible. During this period of time, you are not receiving LTD benefits even though you are unable to work. The elimination period starts on the date you can no longer work due to illness.

Why does this exist? Insurance companies use elimination periods to:

• Reduce costs by filtering out short-term disabilities that may resolve quickly.
• Encourage coordination with other benefits like sick leave, short-term disability, or Employment Insurance (EI).
• Allow time for claim review, ensuring your condition meets the policy’s definition of disability.

A claimant must remain continuously disabled throughout the waiting period to qualify for LTD benefits.

2. Typical Waiting Periods in Canada

Most LTD policies in Canada have elimination periods ranging from 90 to 180 days (3 to 6 months), with the typical number of days in the waiting period being between 90–120 days. Some insurance providers may require a maximum waiting period of up to six months, so the number of days can vary depending on your policy. It is recommended to file your LTD claim at least two months before the elimination period ends to prevent income gaps. Here’s a breakdown:

• Group LTD plans: Often 90–180 days, but the number of days may differ by provider.
• Private or customized plans: Can range from 60 days to a full year, with some policies setting a maximum waiting period.

The elimination period is set out in the policy. The policy will also specify the maximum benefit amount you can receive each month, and total benefits from all sources should not exceed a certain percentage of your regular salary. You are entitled to receive a copy of the disability policy and should request a copy from your insurer, your benefits administrator or your employer.

3. Why Does the Elimination Period Matter?

The waiting period matters because it directly impacts your financial planning. If you assume benefits begin immediately, you could face a serious cash flow crisis. During this time, making ends meet can be especially challenging, as you’ll need to rely on:

• Savings
• Short-term disability benefits
• Employment insurance (EI) sickness benefits
• Employer sick leave or vacation pay

Failing to plan for this gap in income can lead to debt, missed bills, and added stress during an already difficult time. Protecting your income with long-term disability insurance is just as important—if not more so—than protecting assets like your home, since your ability to earn an income is crucial for financial security. Long-term disability benefits provide income replacement for employees who are totally disabled, helping to maintain stability when you need it most.

4. What Happens During the Waiting Period?

The steps involved in applying for long-term disability (LTD) benefits include completing and submitting several forms, such as a notice of claim form and a medical report form. Submitting all required forms and supporting documents is crucial to avoid delays in the claim process.

While you’re waiting for the elimination period to elapse, the following will occur:

• Forms and notice: You must submit a notice of your claim and a medical report form as part of your application. Incomplete or inaccurate forms can result in delays or denials.
• Medical documentation: You’ll need to provide detailed records proving you are totally disabled from performing your job duties.
• Claim review: The insurer will review your physician reports, medical history, and job duties as part of the claim review process before making an approval decision.
• Interview: You may be required to attend an interview with a representative from the insurance company after submitting your application.
• Short term disability: You should determine whether you have short term disability benefits, vacation pay or are covered by a salary continuance plan. Alternatively, you can apply for EI illness. It is often the case that these income sources cover only part of the waiting period.

5. Financial Planning Tips for the Waiting Period

The elimination period can be financially challenging, and delays in the claim process can make it even more difficult to manage your finances. Proactive planning can help you stay afloat. Here are practical strategies:

• Build an emergency fund to cover living expenses during the waiting period for long term disability.
• Review your budget and cut non-essential expenses to stretch your savings.
• Consider other sources of income, such as short-term disability benefits, sick leave, or government assistance.
• Remember, the application process for long-term disability benefits is not always easy. It can be long, complicated, and stressful, often requiring extensive medical evidence.
• Communicate regularly with your insurer and promptly provide any requested documentation to avoid paperwork delays.

✅ Review Your Coverage

Start by confirming your elimination period and benefit amount. Work closely with your advisor or lawyer to ensure you fully understand these details and that your coverage meets your needs. Knowing the timeline helps you plan accurately.

✅ Build an Emergency Fund

Aim to have 3 to 6 months of savings to cover your living expenses while waiting for a decision on your disability claim. This is crucial since LTD benefits won’t start immediately.

✅ Use Short-Term Disability or EI

Apply for Employment Insurance sickness benefits or short-term disability coverage if available. There are different types of disability insurance, including short-term and long-term disability. Short-term disability insurance typically provides coverage for up to 6 months. These can bridge the gap while you wait for the insurer to determine the outcome of your long term disability application.

✅ Consider Applying for Canada Pension Plan Disability Benefits

While CPP-D benefits are usually only payable for severe and prolonged disabilities, there are certain circumstances where it is appropriate to apply for CPP-D immediately after becoming disabled. If you suffer from a condition which is defined as grave or terminal, there is an expedited application and decision making process.

✅ Cut Non-Essential Expenses

Review your budget and reduce discretionary spending (subscriptions, dining out, etc.) to free up cash flow.

✅ Explore Employer Sick Leave

Many employers offer paid sick leave or vacation time that can help during the waiting period. Some employer plans may also have additional benefits included, such as return-of-premium or other features, depending on the specific policy.

✅ Consider Debt Management

If you have loans or credit cards, contact lenders early to discuss hardship programs or payment deferrals.

✅ Look Into Community Resources

Local programs, food banks, or provincial assistance such as the Ontario Disability Support Program (ODSP) can provide temporary relief if needed.

6. Common Mistakes to Avoid

• Assuming benefits start immediately: Always check your policy.
• Delaying your claim: Start the process as soon as you become aware that you cannot perform the essential duties of your occupation due to injury or illness.
• Ignoring other benefits: EI and short term disability can help bridge the gap.
• Failing to budget: Without a plan, the waiting period can lead to financial stress.
• Not understanding the reason for claim denial: Insurers may scrutinize your application and interviews for inconsistencies. Understanding the reason behind a denial and being accurate during the application process is crucial.
• Not taking the time to review your policy: Taking the time to thoroughly review your insurance policy can help you avoid mistakes, save time, and ensure a smoother application process.
• Overlooking pre-existing conditions: Many policies exclude coverage for disabilities related to pre-existing conditions, which may affect your eligibility for long-term disability benefits.
• Insufficient medical evidence: You may need to provide extensive medical evidence to support your claim. Failure to do so can result in denial.
• Returning to work during the elimination period: If you return to work during the waiting period, it may restart the elimination period and delay your long-term disability benefits.

7. Key Takeaways

• LTD benefits do not begin immediately after you leave work due to injury or illness. They are payable after a qualifying period of between 3 to 6 months (or more).
• Financial planning is essential—start early and use all available resources.

Final Thoughts

Understanding the elimination period and planning for it can make a world of difference. Review your policy, build an emergency fund, and explore all available benefits to ensure financial stability during this critical time.

How a Disability Lawyer Can Assist You with Your Claim

Your insurance company will need some time to consider and make a decision on your long term disability claim. Our firm works closely with clients and fights for their rights in LTD cases, ensuring that every worker receives fair treatment. If you become disabled from working within a relatively short time of becoming covered for LTD, the insurer may also request information about whether your illness is excluded as a pre-existing condition. However, it is reasonable to request an expected time for a decision once the elimination period ends. If the insurer delays a decision for a lengthy period, you may want to consider seeking legal representation to request a decision from the insurer.

For advice please text 613-777-0992 or contact us through our website to schedule a meeting with one of our lawyers.  We provide a free consultation, in French or English, to ensure that your rights are protected.