The lawyers at Aaron Waxman & Associates are experienced with Disability, Personal Injury and Employment claims.
There are many provisions and terms in insurance policies that can be difficult to understand and cause confusion.
This is part 2 of our blog series that will take a closer look at certain terms/phrases used in long-term disability (LTD) claims. This blog will explain what an “offset” is.
What does the term “offset” mean and how does it apply to your long-term disability claim?
You may not be aware that many insurance policies contain a provision that allows the insurer to reduce the amount of your monthly benefit if you receive benefits from certain sources (“offsets”). The sources referred to for the most part relate to income you would be receiving because of your current disability.
Examples of common offsets include:
In most policies, the insurer reduces your LTD benefit by the full amount being received from the other source. In some policies, the wording may be different and for example only allow them to take a certain percentage of your CPP Disability Benefit.
There are instances where certain benefits will not be deducted from your LTD benefit. For example, if you were receiving WSIB benefits for a disability from a different employer for a disability that happened before the start of the current disability claim with your current employer, it is not considered an offset. It should also be noted that some policies do not allow for your insurer to use the Child Benefit received from CPP Disability Benefits as an offset, while others do. It is important to review your policy wording to make sure your benefit is calculated properly.
Your insurance policy may also contain language that says even if you do not apply for a benefit that you are eligible for (CPP Disability for example), the amount of the benefit will be estimated by the insurer and assumed to be paid.
If you are terminated from your position during your long-term disability claim or while on disability leave and receive a severance package, that money is considered to be an offset as it represents income. If you feel you were wrongfully dismissed or want to know if the severance package you are offered is fair, you should contact a lawyer to find out your rights and ask how your employment situation could potentially affect your long-term disability claim.
Ultimately, your insurance company is trying to prevent an “overpayment” situation and a situation where you would be “double dipping”, meaning that you should not be paid twice for the same period of time.
Here is an example:
If you or someone you know have been denied long-term disability benefits, you should contact a disability lawyer to find out what your legal rights and obligations are. Our office offers a free initial consultation with a licensed lawyer that can be arranged at a date and time that is convenient for you.
* This blog is for informational purposes only and is not meant to substitute legal advice. Please read our disclaimer for further information.
* All of our lawyers are licensed by The Law Society of Upper Canada
* Office in Toronto and able to represent people in the province of Ontario