Is a severance pay out that is owed to LTD via a non-union policy contract, taken out lump sum to cover any payments they have made to me from the beginning or does it have to be used going forward while on LTD? What happens if I retire and want off of LTD? I would suppose they would take it and say goodbye?
Can a severance owed to LTD be given to them as a percentage of years you were on Ltd versus employment years when you were not on LTD? This probably does not matter.
Does your policy say the insurance company is entitled to your severance?
My policy doesn’t say but some do and some don’t.
I would probably retire first and not give the insurance company any of the $.
Hi Jammer - My initial letter from them actually states severance on the list. I really think they can still request it if I try to retire before because it is in the contract and they would probably see it as overpayment from when they started paying me. I was hoping that maybe I could negotiate with them to close off with LTD early if they would allow me to keep my severance because if I decide to stay on LTD, they will have to pay me 70.000 plus over the next two years and with my illness I have no doubt that I will continue to meet the disability definition. You never know but I won’t hold my breath. I have resigned to the fact that it will transferred to them. With some debt and a need for an emergency fund that would have been so nice. Thanks for your thoughts!
I think some people get severance when there employment is terminated but LTD continues because that is a contract with the insurance company.
If severance is only deducted from the LTD going forward then retiring first would let you keep it.
I think think it would be interesting to hear what @David_Brannen thinks.
Regardless, I hope it all works out.
Maybe your health will stabilize.
Best wishes.
There are different ways that severance can be handled. The most common is what I call the Overlapping-Months Method. This simply means that the severance would be designated as paid a certain amount over a certain amount of months. Then, if you got LTD in those months, then the LTD insurer MAY be entitled to an offset if such an offset is given to them in the Policy. This month by month method usually works out best for the worker / LTD recipient. Insurers often argue for just a gross set off where they claim the entire amount. it is important how the severance is structured and described as that will dictate what is possible in terms of offsets. This is all just general information and may not apply to your situation.
This is the kind fo thing where you would need very specific legal advice with a lawyer looking over your policy, collective agreement and terms of your severance.
David Brannen
Disability Lawyer with Resolute Legal
The response posted above is based on the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with a lawyer, fully explain your situation, and allow the lawyer enough time to research the applicable law and facts required to give an adequate opinion. The basic information provided above is intended as a public service only, a full one-on-one discussion with a lawyer should be done before taking any any action. The information posted on this forum is available to the viewing public and is not intended to create a lawyer client relationship with any person. If you want one-on-one advice, please click here to request a free consultation or call toll free 1-877-282-5188 to speak with a member with our disability claim support team.
Thanks for your input in this regard. As you said before there is a lot of moving balls and each situation is very specific to ones contract.
Best Wishes!
Thanks for all your support!