Long Term Disability Claims
Making Sense of Long-Term Disability Insurance in Canada
Long-term disability (LTD) insurance can be overwhelming, given the jargon from the law and medicine. Yet knowing the essentials is key to getting the best out of your coverage.
For example, "disability" under an insurance policy isn't always equal. Some use incapable of performing your own job in the policy definition, and some use the tougher test incapable of working at any job which you are capable for. Read your policy each time to see what exact definition you have.
The "waiting period" is the duration from the time that your disability started to the time when your benefits will begin. In Canada, it is normally 90 to 180 days. It is like a deductible but in terms of time, not money.
The "benefit period" is how long you qualify to have payments made to you. Some plans pay you from two to five years, but others pay you until age 65, which is Canada's typical retirement age.
Who Qualifies for Long-Term Disability Benefits?
To be eligible for LTD benefits in Canada, you must meet some conditions. Most private insurance contracts require you to work full-time and have been covered by the plan for a minimum duration, i.e., three to six months.
You must also have a medically substantiated condition that prevents you from working. This could be physical sickness (e.g., cancer or MS), mental sickness (e.g., depression or anxiety), or damage due to an accident.
Don’t forget that your plan may adopt one of two definitions:
- “Own occupation”: You can’t perform your specific job.
- “Any occupation”: You can’t perform any job for which you are qualified by education, experience, or training.
In addition to private insurance, you’re also eligible for Canada Pension Plan Disability (CPP-D) benefits if you’re a CPP contributor with a severe and long-lasting disability.
How to File a Long-Term Disability Claim in Canada
What You’ll Need:
Filing an LTD claim entails gathering a lot of documentation. You’ll require:
- Your doctor’s and specialists’ medical history.
- A doctor’s report confirming your diagnosis and impairments in function.
- Records of employment showing your job, duties, and income.
- Perhaps a Functional Capacity Evaluation (FCE) or Independent Medical Examination (IME) if the insurer demands it.
- The more complete and uniform your proof is, the better your case.
Step-by-Step Filing Process:
- Inform your employer and insurance company as soon as possible after becoming disabled.
- Complete the application forms—usually one by you, one by your employer, and one by your treating doctor.
- Submit all supporting documentation within the insurer’s time frame (usually within 90 days of the end of your elimination period).
- Get back promptly if the insurer requests more information or tests.
- Keeping things in order, with copies of everything, and keeping track of your correspondence may help to avoid delays cropping up unnecessarily.
- Conquering Obstacles in the Claims Process
Common Causes of Denial
Unfortunately, LTD claims are occasionally denied due to many different reasons:
- The insurer believes your medical evidence to be insufficient.
- Your condition constitutes a pre-existing condition not covered by the policy.
- There is a difference between your doctor’s statements and your level of activity.
- Your case is not under the definition of “disability” in the policy.
- Learning about these pitfalls will enable you to prepare and make a stronger application.
What to Do If Your Claim Is Denied
If your claim is rejected, don’t panic—you have options:
- Read the denial letter carefully so you understand the insurer’s rationale.
- Submit an internal appeal to the insurer, supported by further evidence or clarification.
- Consult a lawyer if your appeal is denied or takes an inordinate amount of time.
In Canada, long-term disability claims will usually be governed by contract law, and if your policy is through work, it can fall under employment law or even collective agreements if you are unionized.
How to Increase Your Chance of Approval
- Working with Your Insurer
- Good communication is key
- Keep a record of every phone call and email.
- Put things in writing whenever you can.
- Be clear and honest when reporting on yourself.
- Being cooperative and open can assist in building credibility and make the process smoother.
Gaining Expert Support
Having good professional support can be a reason for success or failure of a claim. That includes:
- Medical experts: A detailed letter from your doctor detailing how your condition affects your working life.
- Vocational specialists: A report detailing how your condition influences your ability to earn income, especially if your policy uses the “any occupation” test.
- These third-party reports further establish your claim’s credibility and prove that your condition isn’t only self-reported.
After You’re Approved: What Now?
Maintaining Your Benefits
Being approved is just the beginning. Insurance companies will usually require ongoing evidence that you still remain disabled. You may be required to:
- Regular medical check-ins.
- Enrolling in rehab programs.
- To regularly undergo reassessments.
Some policies also provide return-to-work incentives or partial disability benefits, which allow you to work part-time but receive partial support.
Planning Your Finances for the Future
Long-term disability typically pays 60% to 70% of your net income. You should:
- Budget carefully.
- Apply for CPP Disability as a second income source.
- Talk to a financial planner who is familiar with LTD benefits and tax implications in Canada.
- Planning for your long-term financial stability helps reduce stress and prepare for life after your benefit period ends.
Legal Support: Know Your Rights
Insurance companies have legal teams reviewing every claim. If your claim is denied or delayed, working with a disability lawyer who knows Canadian law can make all the difference.
Lawyers experienced in Canadian LTD claims can help with:
- Filing or appealing claims.
- Negotiating lump-sum settlements.
- Suing insurers for bad faith wrongful denial.
Look for a company that has:
- Experience dealing with major Canadian insurers (e.g., Sun Life, Manulife, Canada Life).
- Success in negotiation and litigation.
- Client-centered approach to legal representation.
Need Help With Your LTD Claim?
You don’t need to navigate a long-term disability matter alone. Having the right support at the beginning can improve your chances of success and reduce stress.