Disability insurance is a valuable asset when the need arises. Many of us pay no attention to its existence until we’re facing a serious injury or health crisis when it is too late to attain it. Most people have this insurance through their employment as a group benefit and may view this as sufficient to look after the perils of an unexpected serious illness or handicap. However, this may not be so for a variety of reasons.

Risks of Disability Insurance Through an Employer

Firstly, this insurance is not portable. When you choose to resign employment or face termination, disability insurance cannot be required to follow you to your next employer.

Presuming your next employer has such a benefit, you may need to pass a medical test to receive it. You may well qualify medically for new disability insurance. The premiums, however, will be adjusted to reflect the risk relevant to your age. Should you present a medical risk, you will be “rated” as a premium factor or denied insurance altogether.

The better course would be to purchase private disability insurance. The rates will be fixed and the policy obviously portable, regardless of your employment situation. There may be options to increase the insured sum as your income may fluctuate, depending on the policy. Your ability to insure your income will not be at the whims of your employer.

Oddly enough, life insurance is portable subject to a rating for age only. There is usually a narrow window to apply for this conversion right without a new medical assessment.

Termination Issues

All benefits are deemed continued for the statutory notice period. This applies to insurance benefits and hence there may be a claim against the insurer for all disability benefits provided that the disability arose in the statutory period and continued without interruption. This claim could be significant, but it requires extensive evidence. If you are terminated and have any pressing health concerns, be sure to get medical advice as soon as possible.

Common Law

A serious medical impairment during the common law termination period (which often extends beyond the statutory period) may allow for a claim against the employer for the entirety of the disability period.

Take Away for All

The employer can do little to defend the common law claim apart from negotiating for a general release. If there is a risk of a disability claim, the best course of action may well be to encourage a disability application.

The employee must be vigilant to understand and be aware of their rights. This is a significant issue to be treated with a high degree of caution. The risk of long-term disability is a significant one, and it should not be taken lightly. Ensuring that you’re protected is key.

Get Advice Before You Act

The issue of disability insurance is complicated and one often examined only when the die has been cast. Preparation and advance planning are the best options. If you have questions about this issue or any employment issue, contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins LLP. We regularly advise employees and employers on issues in the workplace. Contact us online or by phone at 416-364-9599 to schedule a consultation.


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