Long-term Disability Benefits: Contracts and Confusion

Anyone who has been severely injured will tell you the same thing: one of the most stressful aspects of their recovery is the unknown. How long will their recovery take? What if they cannot return to their previous employment? Who is going to pay the bills? What benefits and other rights do they have available to them? Often, these questions do not have obvious answers.

Some injured people are fortunate to have a potential answer to some of these questions, in the form of a long-term disability benefit. These benefits are usually provided by way of an insurance policy provided through their employer and are administered by an insurance company. The purpose of these benefits is to provide injured employees with a steady income replacement when they are unable to perform the duties of their employment, or perhaps any other employment. The Supreme Court of Canada has described these benefits as “peace of mind” contracts between the injured person and the insurance company who provides the benefit.[1]

However, these benefits are payable subject to complicated and often confusing contractual policies. For example, some policies will only pay the benefit if the injured person cannot earn a specific percentage of their previous income. Often, these contracts also require an injured person to provide their own medical evidence of their injuries to the insurance company. Many policies also require an injured person to take part in all treatment that the insurance company deems “reasonable”, irrespective of their ability to pay for the treatment.

The result is sometimes that an injured person’s claim is denied by the insurer despite that person having suffered a serious injury. Many months after their application, the injured person may receive a denial letter from the insurance company that cites a complication with their application. Often, this can leave applicants feeling frustrated as they have been denied on a complicated technicality, despite the severity of their injuries. Usually, there are contractual time limits to appeal such a denial. In some cases, the injured person’s only recourse is to commence legal action against their insurance company.

The result is that the insurance policy which was designed to provide peace of mind has instead added to an already stressful and uncertain situation.

An injured person who has been denied their long-term disability benefits should immediately contact a personal injury lawyer to both assist with their appeal, and to help them navigate the complex relationship between themselves and the insurance company.