You know when you’ve been approved for Long Term Disability Benefits. That approval will usually come first verbally, and then be formalized in writing.
While, getting something in writing from the long term disability insurer might feel good, it doesn’t mean anything until the payments start coming in.
That rings true in real world examples:
Let’s say you hear from your adjuster that benefits have been approved. Great!
Then, you receive a letter from the insurance company which formalizes the approval in writing. Great again!
But, as Jerry McGuire would say “Show me the Money“.
When the insurer does examines your file, looks at how much money you made, and how much money you’ve received from other collateral sources, it turns out that the benefit owing to you amounts to ZERO! That means that the long term disability insurer’s approval amounts to no tangible benefits for you; even though you’ve been approved. The reality is that you’ve been approved for nothing!
In that same example, it might be that the insurer had been paying you long term disability benefits. Then, they stopped because you received collateral benefits (like CPP Disability Benefits). Then, having reviewed your file, along with the amounts paid to you in long term disability benefits vs. the amounts paid to you in CPP Disability benefits; it turns out that the long term disability insurer over paid you. Now, they are seeking a repayment of benefits due to the over payment. This means that you owe the long term disability insurer money. Imagine that: a person owing an insurance company money for a over payment (completely unrelated to payments of insurance premiums).