How does insurance companies handle over payments


I know that when I received CPP-D. The insurance Co. got a initial lump sum from past payments and going forward cut back on what they paid out so that the CPP-D and my LTD did not exceed the required 60% of income replacement. So how does this work with Severence. In my policy, the severance is considered additional income. Overall they would have paid out slighty more than the full severance amount I would most likely receive to date, so do they just take the lump sum or do they have me use up the severance and then they kick in again (hopefully) with the LTD?
Also, I know it is in the contract that they count my severance as additional income but considering why and how they calculate a severance via past years when I was not collecting LTD, this just seems unfair that they have access to this. But to clarify, how do they collect a large amount of additional income - just stop paying me for awhile or take the lump sum? Thanks for your thoughts on this. I am approved past the two year mark for LTD and have 2.5 years before hitting 65.


I would think the insurer stops paying you until they use up the lump sum and then start paying you again.
This never happened to me.


Thanks Jammer - I wish I knew the answer to this today. If this were the case via a lump sum it would give me an opportunity to use some of it to pay off a high interest debt and then over time save up for the amount required for income at the end. A thought. I guess I will just have to wait to hear. Would like to have all my ducks in a row yesterday. Thanks again.


Maybe @David_Brannen will comment, I think he would know.