Long term disability lawyers get asked the same questions regularly. The answers to the 10 most common questions follow. Contact Michael directly for more fulsome answers specific to your situation. There is no fee and no obligation.
1) Should I appeal?
When long term disability claims are denied, there is usually an option to appeal. The problem with appeals is that they are rarely successful. Appeals are not decided by an independent decision maker, whose only objective is a fair result. Rather, LTD appeals are decided by the same company that denied the claim in the first place. The insurance company’s only objective is to increase profits, and approving appeals is not a good way to make money. Most of the time the answer to this question is no, you should not appeal. A lawsuit is the preferred way to resolve the dispute. For more information about appealing, consider reading: How To Write A Long Term Disability Appeal Letter.
2) What’s involved in a lawsuit?
Firstly, you should know that a lawsuit does not mean your case goes to court. In fact, the vast majority of long term disability claims settle long before the case gets anywhere near a courtroom. LTD insurers are in the business of selling a product that is supposed to pay benefits in the event of an inability to work. The last thing it wants is a loss at trial, thereby tarnishing its reputation and making its product harder to sell.
When a lawsuit is commenced, the file is pulled from the claims department, and transferred to the litigation department. The lawyer assigned to defend the claim has the primary objective of resolving the case for the least amount of money possible. Your long term disability lawyer’s primary objective is to secure the most amount of money possible. Usually the claim will settle at mediation, which is a type of settlement meeting. Other than attending the mediation and occasionally checking in with your lawyer, there is very little the client has to do when a lawsuit is underway.
3) Will my benefits be reinstated?
There are two types of settlement. Sometimes the insurance company will agree to pay the past benefits owing and start (or resume) payment of benefits. More often though disputed claims resolve with a full and final settlement, meaning the insurance company pays both past benefits owing, plus benefits into the future, in exchange for the individual giving up their right to claim disability benefits under that policy again.
4) How much can I expect to receive?
Every situation is different. In the case of a full and final settlement, the main factors are: the strength of the medical evidence, the person’s age, and the benefit amount. Other factors include the test of disability, which often changes from “own occupation” to “any occupation” after two years, whether the individual qualifies for CPP-Disability, and numerous other variables. No long term disability lawyer will guarantee a result, but the best ones will have the confidence to provide a realistic range of likely outcomes, so that you can plan accordingly. Be wary of an LTD lawyer who refuses to discuss the value of your claim. It is very possible he or she lacks experience, or simply doesn’t know.
5) Will I Lose My Job?
The short answer is your employer should not terminate you if you are unable to work, even if LTD is denied, so long as you provide a note from a doctor that states you are unable to return to work due to a medical reason. In most circumstances, the employer will put the individual on an unpaid leave of absence for at least two years. Eventually, often after being off work for two to five years, an employer may end the employment relationship on the basis of frustration, a legal concept that is beyond the scope of this blog post.
6) What About Medical, Dental, and Prescription Coverage?
If your long term disability claim is approved, your extended health benefits will continue so long as you remain employed and the premiums are paid. Most LTD policies contain a provision that if disability benefits are approved, the extended health premiums are waived. If the LTD claim is denied, extended health benefits can continue, so long as you or your employer pays the premiums, and for so long as you remain employed. When the LTD claim settles, in most cases you will be required to sign a release giving up your disability and life coverage only, so that extended health benefits continue so long as premiums are paid and you are still employed.
7) What Can I Do For Income While The Claim Is Pending?
There are unfortunately not a lot of good answers to this question. Obviously the LTD benefits were supposed to be the income source in the event of illness or injury. Some people are able to get by on savings, the income of a spouse, borrowing money, or some combination. If those are not options, government funded programs include employment insurance, social assistance, and the Canada Pension Plan Disability program.
8) Can The Insurance Company Be Punished For The Way It Handled My Claim?
Courts have the authority to award punitive damages, aggravated damages, and general damages. These are intended to punish the insurance company for egregious conduct, and to a lesser extent to compensate for the emotional and financial impact of an improperly denied claim. Unfortunately, punitive, aggravated, and general damages are awarded infrequently in Canada, so the insurance company will rarely voluntarily pay these types of claims unless ordered to do so following a trial. The best long term disability lawyers will aggressively pursue these extracontractual claims, in order the maximize the overall settlement. You can read more about punitive, aggravated, and general damages here.
9) How Do Long Term Disability Lawyers Get Paid?
Clients have the option of signing a contingency fee retainer agreement at the outset of the case. With this type of retainer, no fees are paid unless and until the claim is successfully resolved. The LTD lawyer will fund all the expenses of the lawsuit until settlement. When the case resolves, fees are a percentage of the total benefits recovered, plus HST and disbursements. The client gets full credit for the legal fees paid by the insurance company. Contingency fees are tightly regulated by legislation and the Law Society of Ontario, but if the client would rather enter into a different type of fee agreement, other options are available.
10) How Long Will It Take?
Lawsuits take time, but fortunately long term disability litigation moves much faster than other types of court cases. If the insurance company will agree to an early mediation, which is very often the case, the claim could be completely resolved in six to twelve months. Some cases take longer, others resolve quicker. It comes down to the unique circumstances of each situation.
There are of course more fulsome answers for each of these common questions. Do not hesitate to contact Michael for answers to your specific questions. This can be done over the phone, via email, or at one of his offices located in Toronto, London, and Ottawa.