The Common Long-Term Disability (LTD) Denials

LTD policies may vary from one company to another, but the denials are always the same

Unlike auto policies, which are standardized by the Province, policies of Long-Term Disability (LTD) can vary from company to company (Sun Life, Manulife, Canada Life, etc.) That said, many of them share common features, and all of them share common denials.

A central aspect of the vast majority of these policies is the definition of "total disability." In the first two years, this usually means totally disabled from your own occupation. After two years, it usually means totally disabled from other occupations that you might be qualified for.

Typically, if a claimant meets this definition, they can expect to receive around 70% of their income during their disability, usually until the age of 65.

As you might be able to tell then, you pay a lot for these policies, and they make the insurer responsible for a substantial amount of money over time. As a result, whenever the insurer can avoid paying out, they will.

Here are some common denials that might apply in your case:

1. Objective Evidence Requirement: Insurers might assert that a disability isn't supported by "objective evidence," such as MRIs or x-rays. However, as we always tell them, this language appears nowhere in the contract you signed. In addition, for conditions like chronic pain, providing such evidence can be challenging, if not impossible. This means all that you are legally required to show is that it is more likely than not that you meet the definition of "total disability".

2. Change in Disability Definition: Most disability policies have a clause that changes the definition of disability after two years. At this point, it is often that you must show that you are not only totally disabled from your previous occupation, but other occupations for which you are reasonably qualified . Insurers are quick to suggest a range of "sedentary" or "light duty" jobs, and will be happy to tell you that everything from a prison guard to a welder qualifies.

3. Exhausted all appeals: Disability insurers now often offer an "appeal" option if they initially deny your claim. These are internal appeals that have no relation to your legal right to be indemnified under the terms of the contract you signed, and have no relation to your ability to sue the company for breaching the contract when they deny ou. They are designed to leave you feeling like you're out of options.

At the Mike Murphy Law Group, we've litigated thousands of LTD policies for over four decades. If you're facing challenges with your LTD claim, we're here to help.

Aodhan Murphy is an Associate Lawyer at our Halifax Office.