John’s Story

John is unemployed. In January 2010, he goes to the doctor because his back is hurting. The doctor prescribes some painkillers and sends him home to rest. In February, John gets a job and signs up for Long-Term Disability (LTD) Insurance.

A month later, he gets a letter from the insurance company about his LTD. It explains that he will have a two-month service wait. This means that he will have LTD coverage starting April 1, 2010 (two months after the date he was hired). So, if John is injured between February and April, he will not be able to apply for LTD benefits. The LTD policy is an Any Occ policy, which means that John has to be unable to work in his any occupation to be defined as disabled to get benefits.

The letter from the insurance company goes on to explain that John’s back injury is a pre-existing condition, and that he will have a one-year exclusionary period. The exclusionary period begins on the same day of his coverage, April 1, 2010. If he becomes disabled due to his back injury between April 1, 2010, and April 1, 2011, he will not be able to collect LTD benefits.

On May 1, 2011, John hurts his back and can no longer do any type of work due to extreme pain. Initially, he uses sick leave, hoping that his back will get better. When it doesn’t get better, John reviews the terms of the disability income insurance coverage he gets through his employer. Since it has been more than a year since he was hired and the exclusionary period for his back problems is over, John can apply to get LTD benefits.

John knows that it may take a while to get his first LTD check, so he contacts his Human Resources manager. The manager tells him that there’s a 180-day waiting period from the date of disability before his benefits begin. John will start getting his benefits on November 1, 2011.

John was making $2,000 a month before he hurt his back again. His policy pays 50% of pre-disability wages for up to five years, so John will get $1,000 a month from LTD until he is no longer considered disabled or five years have passed, whichever is shorter.

John's Timeline
January 1, 2010 John goes to the doctor for his back.
February 1, 2010 John is hired and signs up for LTD with a two-month waiting period and one-year pre-existing condition exclusionary period for his back injury.
Feb. 1 –
March 31, 2010
John is not yet covered by LTD.
April 1, 2010 –
April 1, 2011
John is covered by LTD, but not for a back injury.
April 1, 2011, onwards John has full LTD coverage.
May 1, 2011 John injures his back and can no longer go to work. He begins using sick leave.
September 1, 2011 John realizes that he will not be able to return to work any time soon. He calls his Human Resources manager and applies for LTD benefits.
May 1 –
November 1, 2011
The 180-day waiting period where John is not working but is not yet getting benefits.
November 1, 2011 John begins to get his monthly LTD benefits of $1,000.