WHAT TYPES OF DISABILITY INSURANCE ARE THERE? 

Short Term Disability: This insurance provides for temporary income replacement payments, if you are unable to work due to an illness or injury.  Usually, this policy covers the first 120 days of disability. 

 Long Term Disability:  This insurance provides income protection if you are unable to work due to illness or injury for more than 120 days.  Generally, the first two years of disability benefits are paid if an individual is unable to return to their own job, but in order to receive disability benefits for more than 120 days, an individual’s illness or injury must prevent them from being unable to work at any job they are reasonably suited for by education training and experience.  Benefits can be payable until age 65 and can be taxable or un-taxed and subject to certain deductions.  Policy requirements to qualify for benefits vary, therefore your specific policy will need to be reviewed by a lawyer. 

Critical Illness Insurance:  This insurance provides financial support if a person is diagnosed with one of the “critical illnesses” specified in the policy.  Generally, the “critical illnesses” identified in most policies are cancer, stroke, heart disease, heart attack along with several other medical conditions.  This benefit is generally payable whether or not a person is able to keep working.  In order to receive payment of the benefit a person must generally survive for a period of time after the diagnosis, generally 30 days. 

 Disability Mortgage Insurance:  This insurance will pay some or all your mortgage payment if you are unable to work as a result of illness or injury.  There is generally a 60-day waiting period.

What type of disability allows me to qualify for long term disability benefits?

You can qualify for LTD benefits in a variety of different ways.  If you sustain an injury which is physical, psychological, neurological or otherwise which prevents you from being able to carry out the duties of your employment, you will qualify for LTD benefits. 

Even if your physical, psychological, neurological, or other disabling condition is not as a result of an accident, but simply started to be disabling at some point while you were covered by the policy, you will qualify for LTD benefits, subject to any specific limitations that might be in your policy of insurance. 

Sometimes, a medical condition that was not initially disabling deteriorates to the point where it becomes a real barrier to a person’s ability to work.  In those circumstances you might also qualify for LTD benefits.

 A disabling condition that arises as a result of an accident or injury does not need to prevent you from engaging in all activities of daily living.  You do not need to be confined to a bed or wheelchair.  You will qualify for LTD when you are prevented from doing the tasks you are required to perform during the course of your employment. Often, a person’s inability to work is largely due to psychological barriers and we can successfully pursue payment of benefits on this basis, dispute the insurance company denying your claim. 

What is an LTD appeal?

If your insurance company has denied your application for LTD, or decides to cut off your LTD benefits, they will send you a letter or email advising of the stoppage of benefits. This letter or email will almost always contain a paragraph explaining that you can “appeal” the insurer’s decision.

An appeal of an LTD denial is not a formal legal process to determine your right to LTD. It is not decided by a neutral third party (like a judge or an arbitrator), but instead an appeal is simply a request to the same insurance company and/or individual who denied your claim in the first place to change their mind.

Advantages

The only potential advantage of pursuing an appeal is that, if you succeed, the insurance company will pay the benefits they owe you without the need for you to hire a disability lawyer to represent you. However, statistically, few, if any LTD appeals are successful in persuading the insurance company to change their decision.

Disadvantages

There are three major Disadvantages for an LTD appeal:

1. Saving the Insurance Company Money

Before you hire a disability lawyer and pursue your claim in a formal way, all decision-making power remains with the insurance company.  While you might be led to believe that your best interests are being considered, the insurance company has a financial incentive not approve your claim. Insurance companies know that many people who have their claim denied will not get a lawyer to represent them, saving the insurance company money and putting them in a position where they can take advantage of the situation.  Encouraging a person to appeal allows the insurance company to delay paying you benefits and delay hiring a lawyer to represent them, saving them money.

2. Biased Decision Making

Your appeal is not being considered by a neutral third party. An appeal is usually a process of asking the same adjuster that decided to terminate your benefit in the first place to change their mind.  Your appeal can be rejected at any time, simply by the adjuster indicating that they have reviewed their decision and they are not prepared to change their mind, without any negative repercussions or penalties. We all understand that it is difficult to change someone’s mind once it has already been made up.  The adjuster that denied your claim has no incentive whatsoever to change their decision to deny your claim. 

On the other hand, hiring a disability lawyer to represent you will force the insurance company to hire their own lawyer who will usually provide them with a legal opinion on how strong or weak their denial of the claim is.  They are much more likely to be persuaded to change their mind if we can outline the risks for their lawyer of an inappropriate denial of benefits.  Pursuing litigation will force them to remove some of the bias from their analysis. 

3. Costing you Time, Costing you Money

An internal appeal of your disability benefit denial wastes precious time during which time you are not going to get paid benefits and delay the start of a formal process that might actually accomplish something of value for you. 

Insurance companies have been known to encourage people to appeal their denial several times, knowing that delays only benefit the insurance company by allowing them to hold on to their money and not incur the cost of hiring a lawyer.   An appeal can take months, or even years, especially if multiple appeals are pursued.  During that time, you are expected to patiently wait while the insurance company reviews your claim.  In the end, they don’t even need to provide a reason for not changing their mind. 

There have been cases of individuals pursuing an appeal that takes them more than 1 or 2 years after the insurance company stopped paying benefits.  When that individual ultimately was told that the appeal was unsuccessful and decided to pursue the matter in court, the insurance company sought to dismiss those claims because of the “delay” in the claim being pursued, even though they had been the cause of that delay.  In some cases, insurance companies have been successful in dismissing claims that were commenced after the limitation period even though they were conducting an appeal which led to a lot of the delay.  Sadly, in those cases claimants lost their legal right to pursue their claims. The insurance company escaped liability and could not be legally forced to pay the benefits because of the delay.

Litigation has its own share of delays because of the backlog in the courts.  However, getting the process started sooner rather than later will minimize how much delay you experience and ensure that the insurance company cannot escape liability because of a missed limitation period.

Do I have to appeal an LTD denial?

Generally, the answer is no, subject to any requirements set out in your individual policy of insurance. You should always seek legal advice before appealing. 

We provide a complimentary consultation to review your LTD denial to help determine if you are legally required to appeal or let you know if we think you should pursue your case in court.