Long-term disability (LTD) insurance replaces a portion of income when illness or injury prevents work. Insurers regularly deny or terminate these benefits. Understanding your rights is essential.
Common Denial Reasons
Denials often cite failure to meet the policy definition of disability, insufficient medical documentation, pre-existing condition exclusions, or surveillance evidence. Many denials are contestable.
Own Occupation vs. Any Occupation
Most LTD policies apply an “own occupation” definition for the first 24 months: you qualify if you cannot perform your own job’s essential duties. After 24 months, the definition typically shifts to “any occupation” — a significantly harder threshold. This transition is a common trigger for benefit termination.
Appealing a Denial
Exhaust the insurer’s internal appeal process, but do not let it run out your limitation period. In BC, the Limitation Act (SBC 2012) imposes a two-year period typically running from when the claim was denied. Ontario’s Limitations Act, 2002 similarly provides two years. A civil action for breach of contract can follow a failed appeal.
Bad Faith
Insurers owe policyholders a duty of good faith. Where an insurer ignores medical evidence or conducts a biased review, courts have awarded aggravated and punitive damages in addition to policy benefits.