Archive: Toronto

My Friend Lisa…..Group Disability Claim

Several years ago (2009), before I owned my own firm, I worked with a wonderful woman named Lisa.  She was a mother of 4 boys and an active rep hockey/lacrosse mom.  Her husband was a homicide detective on the local Regional Police.

At the time, our employer had group life insurance which paid 60% of our earnings.  Employees had the premiums deducted from their paycheque to make sure that the proceeds of the insurance (if needed) would be paid tax-free.

The Incident

One unassuming day, Lisa came to work and announced that her doctor has ordered her to stay home from work.  She explained that she was diagnosed with “Intestinal perforation” (ie. this condition causes the contents of the intestines to leak into the abdominal cavity).  This condition is caused by Chrones Disease and made worse by stress (which 4 boys and a husband who works shifts can cause).  What made things more complicated was when the infection spreads throughout the body, it can cause “Sepsis”, which is very serious and can cause death.

Over the next 11-13 months, the doctors had a difficult time managing the correct dosages of medication.  Once the medication started to work, Lisa fell into a depression.  She was no longer able to participate in her children’s sports, she couldn’t work and overall her life was turned upside down.

Recently (ie. 3 months ago), Lisa finally returned to work….she lasted 4 hours and never returned.

How did the Group Long Term Disability Help?

The group disability policy had been paying Lisa a monthly tax-free benefit after she satisfied the 120 day waiting period.  It continued to pay for over 3 years.  After 3 years, the insurance company acknowledged that she was considered “totally disabled” and wrote a lump sum cheque for the full amount owing to her age 65.

Employers and individuals needs to recognize the financial risks of not being able to work.  Thankfully, our former employer implemented a group long term disability plan.  It protected Lisa from having to sell their home and they were able to modify their lifestyle despite her condition.