Frustrated contract

Hi, friends.
Does any one have experience , how long LTD will continue after employer issued frustrated contract to employee.Does employee has to inform the insurance company or employer is suppose to inform the insurance company about the frustrated contract.
Does severance pay given to employee by employer has to be declared to insurance company or employer is suppose to notify the insurance company.
Thanks a lot for your guidance.
with kind regards

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LTD continues for the maximum period insured by your LTD policy whether or not you are still employed by the company, as long as you are still disabled.

I don’t know about the severance, check your policy for a list of what they can deduct.


I don’t think severance has anything to to with LTD, as this is money (earned) you were entitled to prior to going out on sick leave. Ie same if your employer owes you vacation pay earned prior going out on LTD.

Thank you so much Caro.

Thank you so much Kiddmoase

Hi Nanukr, thanks for participating in the forum. So, a frustration termination of employment won’t impact your ongoing LTD claim. If you get any type of severance or termination pay, you should advise your LTD insurer to confirm if they get to offset it from your LTD payments.

Finally, keep in mind the law is evolving on frustration of employment contracts in the context of a person being on long-term disability. There is growing acceptance that there may be situations where an employer cannot terminate an employee for frustration when they are on LTD benefits that were provided as part of the the employment. This doesn’t mean they can’t terminate you, just that they would have you termination pay.

David Brannen

Disability Lawyer with Resolute Legal

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Thank you Mr David. Appreciate your guidance.