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Posted by Ed Hofstede, Vice President, Consulting and Client Service, February 1 2022
Disability Cases
Is it Time to Rename Disability Insurance Benefits?


We live in a time when much focus is being directed toward the impact that terminology and names can have on society. There is great contemplation and debate over the naming of schools, buildings, streets, sports teams, racial groups, sexual orientation and how to refer to people facing various physical and mental health challenges – if they should even be referred to as challenges at all? This is part of societal evolution, and hopefully of growth and enlightenment, as we seek to minimize and eliminate language that can diminish and discriminate against some while potentially celebrating others who may be less worthy.

Practical Implications

Although this may be a noble and important undertaking, the potential renaming of terms discussed in this article are for much more practical reasons as well. Let’s look at some of the language we use for “Disability Insurance” and especially “Long Term Disability Insurance”.

We know that the mind has incredible power over the body. The placebo effect has been studied and demonstrated for decades and many believe it contributes significantly to the effectiveness of many medications. You may be less familiar with the opposite of a placebo which is a nocebo. Nocebos have a negative effect where individuals who believe they will experience negative symptoms do, in fact, experience them due to the power of their beliefs and the power of suggestion.

Could Terminology like "Long Term Disability Insurance" Hurt Employee Outcomes?

Currently over one third of “Disability Insurance” claims are related to mental health issues and about two thirds have some mental health component to the claim. Set aside, for a moment, any knowledge you may have about Short-Term Disability and Long-Term Disability by virtue of your experience in Employee Benefits or Human Resources. Now think about an employee who is struggling with a mental health issue and the psychological impact of a letter they receive that says they “have been approved for long-term disability insurance! Might they think ‘Wow, I must be in bad shape. Maybe I’m even worse than I thought? I’m approved for the long haul.’ Might the power of that suggestion actually manifest in further deterioration of their mental health?

For those of us that work in Employee Benefits or HR, the terms Short- and Long-Term Disability are taken for granted and we understand that the distinction between the two generally relates to issues of funding strategies, adjudication protocols, integration with government programs, and the rigour behind rehabilitation etc. But could we adopt terminology that potentially offers a more optimistic power of suggestion?

There are undoubtedly better ideas but perhaps the following suggestions might get our creative juices flowing:

Short-Term Disability

Medical Absence Period

Long-Term Disability

Extended Rehabilitation

Disability Insurance

Income Protection Insurance

A Final Thought On Terminology

Before I sign off… there is one more misnomer that has always bugged me. LTD is generally sold as a “Pooled Benefit” but the reality, for most carriers and their small to mid-sized group clients, is that it’s only “pooled” until you start to have some claims and then it gets much more experience-rated quite quickly. There may be some room here for some more upfront transparency.

Do you need help managing your employee absences process? Please consult this article presenting the basic rules or contact one of our experts.


Ed Hofstede holds an Honours degree in Business from Wilfrid Laurier University and is an active member of CALU and TPAAC. He is a passionate and active advocate for workplace and youth mental health initiatives. Ed aims to deliver not only best-in-class benefit solutions, but healthy, engaged, loyal, and productive employees for our clients.
Ed Hofstede, Vice President, Consulting and Client Service