If you have sustained a disability due to an illness, car accident, medical negligence, slip/trip and fall, or assault, you may be eligible to receive benefits under one or more types of disability insurance. These include short-term disability insurance, long-term disability insurance, mortgage disability insurance and critical illness insurance. If you have access to any of these policies, applying for benefits can be difficult and, unfortunately, many valid claims are unfairly denied or terminated by insurance companies. An experienced disability insurance lawyer can help you challenge the insurance company in the event of an unfair denial or termination of benefits.
Short-term disability (“œSTD”) may be available at the onset of an illness or injury. Most STD plans are provided by an employer as part of their benefits package – payable by either the employer itself, or, another insurance carrier. A STD period is one where the employee uses up his or her allotted sick leave, and must then go on STD leave before they can qualify for long-term disability benefits. STD may consists of anywhere from full salary to a percentage of salary. Alternatively, an LTD policy may require that the person apply for and receive Employment Insurance Disability benefits before applying for LTD – in this scenario, the period of Employment Insurance Disability benefits is in fact the STD period.
Long-term Disability (“œLTD”) insurance is a form of income replacement. The policyholder may be the employer, or, if you have purchased the LTD policy yourself privately, then you are the policyholder.
LTD benefits are available once the insured person has exhausted their EI disability, sick leave or STD benefits, as the case may be, and they meet the definition of “œtotal disability” as contained in the LTD policy. Most LTD policies define “œtotal disability” as an inability (due to illness, injury or disability) to perform the duties of one’s own occupation for the first 24 months of disability, and an inability to perform any occupation thereafter. An LTD benefit is usually equivalent to 50% to 70% of a person’s pre-disability income, although the precise percentage varies from policy to policy. It may or may not be taxable, depending on who pays the premium. More information about LTD insurance can be found here.
Critical Illness Insurance provides coverage for individuals who are diagnosed with a critical illness as defined in the policy. Most critical illnesses include terminal and life-altering medical conditions, such as cancer. The critical illness insurance will usually pay a lump sum, one-time payment in the event of diagnosis, which the insured person can then use towards living expenses while they are off work, private nursing, medical expenses, or specialized out-of-country medical treatments.
Mortgage Disability Insurance, also known as mortgage payment protection insurance, is a type of LTD insurance. This insurance policy is taken out when you enter into a mortgage contract. The mortgage holder is also the beneficiary of the insurance. The purpose of Mortgage Disability Insurance is to pay your mortgage payments in the event that you become “œtotally disabled”, as that term is defined in the insurance policy. The length of time that the payments continue will depend on the wording of the insurance policy. It is possible to have both LTD insurance as well as Mortgage Disability insurance.
The money that is paid is called a benefit. The benefit amount varies from policy to policy, but typically it is paid monthly in arrears, and is equivalent to a percentage of your pre-disability income. The percentage also varies from policy to policy, but can range from 50% to 70% of your gross earnings. Some policies also factor in bonuses and overtime when calculating the benefit amount. Additionally, some policies may have a monthly maximum, particularly in the case of high-income earners.
If your LTD policy has a “œcost of living” adjustment clauses, then the monthly benefit will increase each year.
Some LTD insurance policies provide a set monthly amount, rather than percentage of income, as the LTD benefit.
Most LTD policies will pay benefits if the person is “œtotally disabled.” Total Disability is generally defined as the inability to perform your own occupation for the first 24 months of disability; after 24 months, the definition of Total Disability changes so that benefits are only payable if the person suffers a complete inability to perform any occupation. The “œany occupation” can continue until age 65, provided that the person continues to meet the definition of Total Disability during that time.
The maximum duration of LTD benefits is to age 65.
The general rule is that if an insured person pays part or all of the monthly insurance premium, then the LTD benefit is a non-taxable benefit. If the employer (in the case of a group disability plan) or other policyholder pays the premium, then the LTD benefit is taxable.
Other than taxes, the LTD insurance policy will usually contain a clause than lists all offsets or deductions from the monthly benefit. These offsets usually include other forms of income replacement, such as under auto insurance legislation, Canada Pension Plan Disability benefits, Workplace Safety and Insurance benefits, and pension income. However, it is important to note that not all LTD policies are identical. Group insurance plans are typically more stringent in terms of the listed offsets than insurance policies purchased by the individual policyholder.
To speak with an experienced long-term disability lawyer, call Howard Yegendorf & Associates today or book a consultation online.
Many long-term disability (“œLTD”) insurers carefully abide by the terms of their policies and adjust claims in an honest and prompt manner. Theoretically, as long as an insured person complies with policy requirements for filing a claim and meets the definition of Total Disability, they will be eligible for receipt of LTD benefits.
However, as many LTD lawyers know, many claims are denied by insurers – claims that may very well otherwise be valid. If your claim for LTD benefits is denied, you need the advice of a lawyer experienced in long-term disability insurance who can help protect your rights and interests – and get your benefits back.
Sometimes, claims are denied or delayed for simple procedural errors, such as:
Most of these errors can be avoided with careful attention to detail, and/or otherwise quickly remedied.
An insurance company will consider applications for benefits that have been filed in a timely manner. Most LTD insurance policies contain timelines for applying – for example, an application has to be filed within 90 days of the end of the short-term disability or elimination period. Applying for LTD benefits months or years after a disability has commenced may compromise your entitlement. There are certain circumstances where a late application may be approved, however. To find out if you fall in this category, you should consult with a lawyer with experience and skills in litigating long-term disability claims, such as Najma Rashid at Howard Yegendorf & Associates.
Limitation periods for starting a lawsuit against an insurance company for wrongful denial of a valid LTD claim, or termination of LTD benefits, are set out in Ontario’s Limitations Act, and the insurance policy itself. Most LTD insurance policies are governed by the Limitations Act unless the policy says otherwise. The Limitations Act provides for a 2-year limitation period. This 2-year period begins to run from the date that there is a clear denial of your LTD claim. You should consult a lawyer within this 2-year period, and preferably as soon as your claim has been denied or terminated.
Once the limitation period expires, you will be forever barred from starting a legal action against your LTD insurance company for wrongful denial or termination of benefits.
Many claims are denied or terminated because the insurance company does not feel that the medical information submitted meets the requirements of the policy. To qualify for LTD benefits, you must be “œtotally disabled”. That phrase is defined in your insurance policy. Generally speaking, most policies define “œtotal disability” or “œtotally disabled” as the inability to perform the tasks of your own occupation for the first 24 months, and, after 24 months, the inability to perform the tasks of any occupation for which you are or may become reasonably suited by education, training or experience. The said inability must be due to a medical condition such as accident, injury or disease.
To prove “œtotal disability”, the insured person must submit medical information including a written Physician’s Statement, which is a questionnaire or medical certificate completed by the treating doctor. The Statement will set out the diagnosis, current treatment, medications, and opinion about whether the medical condition prevents the person from working.
Additionally, particularly if the claim has been approved but the insurance company is re-evaluating your entitlement to continued LTD payments, the insured person will be required to provide the records of his/her family physician, specialist, lab results, surgical and hospital records, physiotherapy records, and all other medical records.
If these records are not provided in a timely fashion to the insurance company, or they suggest to the insurance company that you are getting better or that you are not following regular treatment recommendations, then your LTD benefits may be in jeopardy.
Even if your illness, medical condition or disease causes “œtotal disability”, many policies have certain exclusions that may negate your eligibility for benefits. Review your policy carefully to determine if these exclusions apply to you. Some claims may be excluded from eligibility if:
Please call 1-866-303-5118 to schedule a one-on-one appointment with one of our long-term disability insurance lawyers at Howard Yegendorf & Associates to discuss your legal options.
“Our results in catastrophic injury cases are measured in financial terms. But I have always felt that the true success in legal cases where lives have been shattered in an accident comes from a compassionate and thorough understanding of the deep human costs involved.”
– Howard Yegendorf, Founding Partner.