Top 10 Reasons Long Term Disability Claims Are Denied

LTD Denied

Long Term Disability insurance is supposed to provide a source of income for you and your family while you are unable to work due to illness or injury. Unfortunately, many claims are denied after the initial application. In other cases, benefits are initially paid but stopped before a return to work is possible. The insurance company had no problem collecting the premiums, so how can it justify denying your claim?  Here are the Top 10 Reasons Long Term Disability Claims Are Denied:  

1)           Lack of medical evidence: Unless the Long Term Disability insurer is provided with enough information to assess the extent of your disability, it will probably deny your claim.  The insurer may reconsider its decision if you provide additional records, but sometimes the requests for documentation is endless, and your claim still isn’t approved.   In many cases, enough information has been provided, and this is just an excuse to reject your claim.

2)           Type of medical condition:  Some medical conditions are easy to understand, but others are more difficult to objectively assess.  Depression, anxiety, chronic pain, fibromyalgia, post-traumatic stress disorder, and fatigue are examples of medical conditions that are more likely to result in a denial.  This shouldn’t be the case, but it is.  If the reason for your impairment isn’t “objective”, expect the insurer to be suspicious, even though both the medical community and the legal system recognize these conditions are just as real and disabling as other illnesses. 

3)           Type of employment or employment issues:  If the nature of your job is such that your disability can easily be accommodated, and your employer is willing to do so, you are more likely to be denied Long Term Disability benefits. In addition, if the insurer gets the impression that you are not working because of workplace issues, such as a conflict with management or co-workers, there is a good chance the claim will be denied, even though there is no exclusion for this in the policy.

4)           Internal medical reviews:  Insurance companies have highly paid doctors available to review your medical records.  These internal medical reviews are usually decided in the insurance company’s favour, even though they are supposed to be objective.  Often a treating doctor supports disability and the insurer’s internal medical reviewer does not.  In this situation, the insurance company is supposed to weigh all the evidence in a fair and impartial manner, but it is rare for an insurer to accept a treating doctor’s opinion over their own internal medical reviewer.  

5)           Surveillance & other investigations:  Sometimes legitimate claims are denied after investigators are hired to follow you around and document your activities.  They will review your social media accounts and other online activities.  If the insurer gets the impression from these investigations that you are not disabled from working, your claim will probably be denied.  This is especially true if the investigations conflict with any other information provided to the insurer.

6)           Change of definition from “own occupation” to “any occupation”:  Most Long Term Disability policies have two definitions of disability.  Usually the policy states that for the first two years you must be disabled from your “own occupation”, meaning you cannot perform most of the important aspects of your job.  Typically the test of disability changes to “any occupation” after two years, but “any occupation” does not mean any job in the literal sense.  Your insurer is required to consider your training, education, experience, age, prospects for retraining, functional limitations, and other factors.  In reality, disability insurers often fail to apply the any occupation test fairly, and instead use the change of definition to justify denial. 

7)           Pre-existing medical condition:  Depending on how long you have been insured, the wording of your Long Term Disability policy, and the treatment you received during a precise time period before you became disabled, your LTD claim could be denied on the basis of a pre-existing condition.  Some claims are legitimately denied for this reason.  In other cases, the insurer applies the exclusion too broadly, perhaps unfairly relying on minor pre-existing health concerns or unrelated symptoms to justify denying the claim. 

8)           Incomplete application: Sometimes there is information missing on the initial application, or the Attending Physician’s Statement is improperly completed. These deficiencies can usually be easily corrected.  

9)           Missed deadlines:  If you do not apply on time, do not appeal on time, or do not commence a lawsuit on time, you may not be entitled to the benefits you would otherwise be eligible for. Some deadlines can be extended, others cannot.

10)         Failure to participate in appropriate treatment:  You are required to seek ongoing treatment for your disability, otherwise the insurer can deny the claim.  Sometimes the failure to seek treatment has more to do with constraints on our health care system than intentionally avoiding treatment. In other situations, the failure to seek treatment is a symptom of an underlying mental health issue. In these cases, failure to seek treatment should not be the basis for denying a claim.

These are the top 10 reasons for denial I regularly see in my practice as a Long Term Disability lawyer, but by no means is it an exhaustive list.

The good news is, in virtually every case there are strong arguments that the refusal, denial, or stoppage was improper and that benefits ought to be paid. When the denial is challenged by a lawyer the insurance company knows and respects, the result is a fair settlement.  If your claim has been denied, or if you have any questions concerning your benefits, contact Michael Jordan directly.

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Michael Jordan
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