Denied Long-Term Disability Benefits
You may have to wait several months to find out whether your claim for long-term disability (LTD) is approved. The more complex your application is in terms of documents, assessments, and other information demanded by your insurer, the longer it will take for them to make a decision. Insurance policies will outline an “elimination period” between application and receipt of benefits, which may last as long as six months.
Even after all this waiting, you may still receive a claim denial. Fortunately, your pursuit of benefits does not have to end there.
Why has my insurer rejected my long-term disability claim?
Some of the most common reasons for insurance companies to turn down claims are:
- Not meeting the definition of disabled
- Missing or insufficient medical or other documentation
- Making a claim too late
- Disability is valid, but not considered long-term
- Disability is valid, but caused by a condition excluded from coverage
Waiting to submit a claim will likely complicate your chances of receiving approval. Your insurer may argue that you are not totally disabled because you continued working for a long period after you first contracted an illness or were injured. However, such an argument ignores the reality that it may take months or even years before the true extent of the impacts to your health are known.
Will my long-term disability claim be denied because it is based on mental health conditions?
Mental health issues may be harder to prove than (or not as immediately apparent as) physical ones but in general, they are just as acceptable grounds for receiving LTD benefits. Many mental health challenges can interfere with your capacity to work, in effect “disabling” you. In fact, around 3 in 10 disability claims across Canada are based on mental health conditions. Some examples of covered conditions include (but are not limited to) sleep disorders, post-traumatic stress disorder (PTSD), depression, anxiety, attention deficit and hyperactivity disorder (ADHD), bipolar disorder, and personality disorders.
What are my options if my long-term disability benefits are denied in Canada?
You may wish to dispute the denial of your long-term disability benefits, especially if you have no alternatives for replacing your income or other resources have already been exhausted.
In the event that your application was turned down, there are a few avenues to appeal. These consist of internal and external processes. Whichever you choose, you have the right to legal representation throughout. A lawyer who has extensively dealt with LTD insurance issues and endured these processes could be a vital ally.
You should receive a detailed letter from your insurer informing you of their decision and explaining the reasoning behind it. Make sure you read this letter carefully and hang on to it, along with all other past correspondence from the insurance company, as it will provide useful insight into how and where to dispute the decision as well as potential flaws in the company’s reasoning or procedural errors on their part. Contact your insurer for more details if any part of their letter is confusing to you.
Your insurance company may reject a partially-completed application without giving a detailed explanation or requesting more evidence from you, but they must provide their reasoning if you ask.
To be clear, many claims are accepted with little objection from the insurer and processed accordingly. However, your insurance company is first and foremost in the business of selling its policies (rather than paying out on them) and protecting its profits. These interests may run counter to your own efforts to secure fair compensation. Incomplete information may also lead them to decide your claim unfairly.
Based on the reasons for denial, our experienced long-term disability lawyers can help you determine how to most effectively dispute them.
Internal vs. external appeals
Insurers are obligated to offer an internal appeals process if they decide not to honour your claim. The terms for this process, such as relevant deadlines and how many times you may appeal, will be dictated by the company. In addition, any final decision rests in their hands. It may take as many as 8 months for the initial LTD application and then the internal appeals process to run their course, which eats into the two-year statute of limitations to take legal action on your claim. Because of how they are set up, it may not come as a surprise that these appeals do not succeed very often. Much as when you first applied for LTD, you could simply receive another rejection after more months of waiting.
Despite these shortcomings, an internal appeal may be the best option to choose if your insurance denial was due to missing documentation. Providing the missing or additional evidence could then tip the balance in your favour with relative ease.
If there are more substantial grounds for the rejection, then it is less worthwhile to dispute your insurer’s decision internally. After all, the company is relatively unlikely to disagree with its own reasoning. Turning to the legal system opens your claim, along with the actions and evidence of your insurer, to outside oversight. Instead of relying on your insurance company’s rules, the courts’ regulations are universally applicable, so their processes are more transparent.
In most instances, your lawsuit would be filed against your insurance company. Depending on the specifics of your case, it may also be appropriate to file a lawsuit against your insurance broker for misrepresenting the terms of coverage.
The time and energy you spend preparing an appeal may be better directed towards resolving the dispute externally. Bear in mind that very, very few claims will ever be heard in a courtroom. Nearly all are resolved before that stage, which may take several years to reach. Intermediate steps could involve negotiations between you and your insurer, mediation, and/or arbitration. During the period before your claim is sorted out, you will often, though not always, be able to keep getting benefits.
Going back to work when you’re injured may hurt in more ways than one
For many Canadians, our self-sufficiency and integrity, as proven by our ability to earn income and career development, is a source of great personal pride. You may have a strong desire to return to your job or find another prematurely as a result. By contrast, you may feel “guilty” or “lazy” or like you are a “complainer” for not working and claiming LTD.
Indeed, your insurer is very likely to recommend that you return to the labour force eventually, playing on any pressure you might have placed on yourself. The change of definition in what types of jobs you must not be able to perform to remain eligible for LTD benefits demonstrates the general trend of insurers’ reasoning. It is easier for you to pass the “any occupation test” than the “own occupation test”, so it is also easier to deny or end your benefits.
Ultimately, re-entering the workforce may still be the best choice for you, but you should never go back to your job or seek other employment if you do not feel capable yet. Your desire to work again could worsen your health problems and harm your bottom line, now and in future.
In terms of your claim, your insurer might conclude that by attempting to work again, you did not follow the course of treatment that your doctor recommended or were not cautious enough to avoid worsening your health situation. On the other hand, if your doctor has already cleared you to work and then you realize you cannot keep going due to your health issues, the attempt might show your good faith. It could also be used as evidence of your continued disability.
If your insurance company suggests you are able to return to work, you can explain in writing that you are not prepared to do so. They must be able to present evidence and/or strong reasoning if they wish to end your benefits. In any case, they cannot force you to start working again.
What happens if my long-term disability appeal succeeds?
If you can demonstrate the validity of your claim following a denial, the insurance company could either offer you a lump-sum settlement payment or the reinstatement of your benefits (in addition to making up any previously-missed payments).
The best choice for you can depend on a range of factors, including your long-term treatment and care needs. Reinstatement of LTD benefits could then potentially last until you reach retirement age. Your relationship with your insurer remains intact. You will be subject to their ongoing medical and labour skills assessments. It is in their rights to deny coverage again later.
A lump sum, by contrast, provides you with certainty, a larger payment sooner, and gives closure to your relationship with your insurance company. The lump sum may turn out to be smaller than what you could receive through regular benefit payments, however.
There are many legal and other factors to consider when weighing these options. A qualified long-term disability lawyer can better illuminate the consequences your decisions could have.
Should I hire a long-term disability lawyer to represent my LTD claim?
Our long-term disability lawyers offer services to its clients based strictly on contingency fee retainer agreements.
Many of our clients have shared with us that having a professional legal advocate on their side provided them with peace of mind and a sense of control. This allowed them to focus on their comfort, health, and recovery. By contrast, when dealing with their insurer alone, they often felt overwhelmed and outmatched.
Of course, every client is an individual human being, so their cases and feelings are just as varied. Past results are not necessarily indicative of future outcomes. Certainly, they do not guarantee your claim’s success. Nevertheless, we believe this record speaks to the faith that our clients have placed in us since we were founded in 1959 and their satisfaction.
Book a free consultation with our long-term disability lawyers for legal help
Our long-term disability lawyers are ready and eager to serve you if your long-term disability benefits have been denied. You can reach us by calling 1-844-791-8202 or using our contact form on this page. Once we hear from you, we can set up a free initial consultation. We offer virtual consultation so you can contact us from the comfort of your own home. From there, we can give specific legal guidance and assess whether we are able to take on your case. If you are interested in learning more, our team is available to take your call 24/7. Book your free consultation with us today.
*Please note the content in this article is only intended to be a general overview on this topic and not intended to be taken as legal advice. Please speak with a long-term disability lawyer for specific legal advice as each situation is unique.