General FAQ

LTD insurance protects your income and pension plan contributions if you are absent from work for long periods of time as a result of illness or injury. The plan reduces the financial vulnerability most members face when confronted with a loss of income during a lengthy illness or injury.

The purpose of LTD insurance is to replace lost income due to disability, in order to protect the lifestyle you have built for yourself and/or your family.

LTD premiums are based on plan design and utilization. Although the number of people who apply for LTD benefits is relatively low, the claims often have a high dollar value. In Ontario, for example, two to three percent of the teachers in some areas will receive LTD benefits at some point in their career.

Here are some points to consider when making decisions about enrolling in an LTD plan:

• 1 in 3 Canadians will develop some form of life threatening cancer
• 1 in 2 Canadians will suffer from heart disease
• 95 percent of heart attack victims and 75 percent of people who experience a stroke, and survive the initial event, are left with some form of disability
• Over 40 percent of the new LTD claims received from the education sector fall into the mental/nervous and stress-related categories. According to recent studies conducted by the Canadian Institute of Actuaries, the incidence of mental/nervous and stress-related claims in education is 50 percent higher than the Canadian workforce
• The average duration of an LTD claim is greater than 3 years

If you are making a decision about enrolling in an LTD plan, ask yourself these questions:

1. If you became ill, could not work, and knew your accumulated sick leave credits would be exhausted before you were able to return to work, could you maintain your home and meet your financial obligations without your present salary?
2. If you were disabled and unable to work, would you be prepared to accept a lower pension because contributions to your pension plan would no longer be made?

If you answered 'NO' to either question, you should consider enrolling in an LTD plan to provide a financial safety net and pension plan protection in the event you become disabled.

LTD insurance is a critical component in group insurance plans. Group insurance is designed to lower the cost of insurance to plan members by spreading the risk and costs of claims over a large number of average healthy people. The more people in the work group, the greater the revenue pool available to pay claims. By balancing the demographics of a group against the risk of illness or disability, insurers create LTD plans that provide optimal pricing for the insurance coverage desired by the group.

Mandatory LTD plans are based upon full work group participation. This ensures the membership base is sufficient and suitably stable to sustain the benefits and services supplied by the plan. The combination of adequate numbers and stability maintains a balance between risk and revenue.

In LTD plans where membership is optional, group size tends to be lower and the number of members fluctuates as people opt in and out of the plan. Some people, especially younger employees, decline membership because they believe they are not at risk of becoming disabled. Others opt out of the plan for financial or personal reasons. Membership in the plan becomes less than stable, and more risk is focused upon a declining number of older members. As a result, the cost of their premiums must increase to maintain the benefits.

Regardless of the type of plan, disability is unpredictable. Serious illness may attack the most health-conscious members, and even the most cautious people may suffer a disabling accident. Although it is impossible to predict the potential for a disabling event, we know that:

• 7 out of 10 people between the ages of 35 and 65 will become disabled for 3 months or longer
• 1 out of 7 employees will be disabled for 5 years or more, before reaching retirement
• At age 32, a disability of 3 months or longer, is 6 times more likely than death
• In recent years, 5 in every 10 claims submitted for Canada Pension Plan Disability Benefits are initially refused

The risk of disability is real and can strike at any age or any time. Mandatory plans ensure all members in the work group receive adequate income and pension plan protection in the event of an illness or disabling accident.

Full participation in a LTD plan takes planning and commitment, but it is worth the effort. It begins by making membership in the plan a condition of employment through collective bargaining. Everyone in the group deserves to enjoy the comfort and security of a financial safety net!

Yes. OTIP will provide assistance to develop a 20-day early intervention program. We will work closely with school board staff and federation representatives to create an early identification process that matches your needs. Specifically, OTIP will help:

• Design an effective early intervention process
• Assist with documentation
• Develop communication materials to introduce and reinforce the program
• Undertake reviews with your staff to improve compliance
• Review the early intervention process annually with your incoming executive

OTIP will also provide periodic reporting on the success of your program. We will be pleased to provide assistance and guidance to school boards and federations interested in developing early intervention programs.

No. The early intervention program is completely voluntary. Although the sound of early intervention may not be appealing, we encourage all members to talk with our rehabilitation consultants (RCs) as they may be able to provide a different perspective.

OTIP keeps ongoing statistics on our early intervention program showing the number of referrals, the average length of a referral and the outcomes. Please contact your account manager for more information.

Ideally, you should apply for LTD benefits following a 20-day period of absence from work.

Absolutely. Your federation representative may be able to provide the help you need in completing your LTD application or you may contact OTIP group life and disability claims directly at 1-800-267-6847. We're here to help. If necessary, we can refer you to a disability service representative (DSR) who will visit you at your home.

Benefit packages vary depending on your collective agreement. Contact your local affiliate representative or benefits administrator to determine how a disability leave impacts your other benefits.

Please contact your federation directly for advice relating to this issue.

If you are insured under a mandatory LTD plan you will be required to maintain LTD coverage until you have reached the dates specified under the termination provision of your LTD contract, less the length of the waiting period of any potential LTD claim. The termination provision in the standard OTIP LTD policy allows the member to terminate coverage on the earlier of:

• The date the member is eligible for a 66% unreduced service pension, less the length of the waiting period, or
• The end of the month when the member reaches age 65, less the length of the waiting period.

A review of the provisions in your LTD contract will help clarify your specific situation. Here are two examples:

1. Alan is 58 years old and plans to retire at the end of the school year. Since Alan only has 25 years of credited service, LTD coverage under a mandatory plan must be maintained until the termination date of the policy. In this situation, if Alan became disabled during the present school year and his LTD claim was approved, he could potentially receive benefits and continue to accumulate years of service in his pension plan until he has attained age 65.
2. Marjorie is 61 years old and she is scheduled to retire at the end of the current school year. The waiting period for any potential LTD claim calls for the expiration of sick leave credits. Marjorie will have 33 years of credited service and enough sick leave credits to take her through to her retirement date. Marjorie can cancel LTD coverage for her final teaching year.

In cases where the termination provision differs from these examples, the situations will vary. Again, you should review your LTD plan to confirm the termination provisions.

Premiums paid by a member after LTD coverage has terminated may be refunded for the current school year and the year prior to the current year.

The process is simple. Advise the administrative office responsible for deducting the premiums and ask them to arrange for reimbursement. Alternatively, the member may contact their OTIP account manager who will review the situation and work with the member to assemble the information required confirming an overpayment has occurred.

Typically, if all the necessary information has been provided, a refund will be issued within a week. In cases where the account manager experiences delays in obtaining information, the representative will notify the member and explain the reasons for the delay.