Inflation adjustment LTD contract confusion


#1

Hello, welcome everyone. I am having issues deciphering a clause regarding LTD inflation adjustment - could you please tell me whether the LTD payment is entitled to a yearly increase? I was told no by the ins. but the language in the contract seems contrary (and contradictory) - “Amount payable” is adjusted and “gross benefit” is not. Isn’t the benefit the amount payable? And what is the “coordination level”? Sorry if it seems obvious but I find it confusing:

INFLATION PROTECTION

The amount payable will be recalculated for inflation protection 1 year after the start

of the benefit period and annually after that. On those dates the income limit under the

rehabilitation incentive provision will be multiplied by the Consumer Price Index factor.

The Consumer Price Index factor will not be applied to the gross benefit or the coordination level.


#2

I don’t understand it.
What is the “rehab incentive”?
I’m guessing that is a bonus that is increased by the consumer price index each year (1.5% for 2018).
The company may have purchased a crappy group insurance policy that doesn’t increase each year or the insurance company could be mistaken.
Mine wasn’t increased automatically, I had to point out the wording in my benefit booklet and then they agreed with me.
I don’t understand the wording in yours though.
Hopefully someone will be able to understand it.


#3

It means that they will increase your monthly benefit after 1 year based on inflation rate.

If you are already receiving the maximum gross benefit then you will not see an increase. Many policies have you will be paid a percentage of your salary up to a maximum amount.

If you are working under a rehab plan and having that wage topped up by Ltd then you will get the increase. This is what the coordination level refers too.


#4

Thank you for your input. My LTD coverage is indeed maxed out due to the salary multiplied by the percentage being higher than the maximum. So I suspect that is the reason for no increases.