Top 5 Surprising Loopholes in Long-Term Disability Policies

Every disability insurance policy or plan is different, but there is one thing all policies have in common: fine print. The “nitty gritty” of your long-term disability (“LTD”) policy contains loopholes and exclusions that can significantly impact your LTD claim.

Understanding the fine print will help you avoid nasty surprises, protect your rights, and increase the likelihood of a successful LTD claim. So, let’s talk about the most common loopholes that may be hiding in the fine print of your disability insurance policy.

Before you read on, remember that each policy has its own specific language. For help decoding the fine print of your disability insurance plan, reach out to an experienced long term disability lawyer. Ajax, Whitby, Lindsay, and Oshawa lawyers at our law firm can provide you with a free consultation to find out if you have a claim.

Decoding the Fine Print in Ontario LTD Policies

The fine print will be found in your disability insurance policy, but you likely only have a summary of your policy in a benefits booklet. It’s essential that you get and review a copy of the full text of the actual policy to uncover whether any of the following loopholes and pitfalls apply in your situation.

1. Pre-Existing Conditions

Many LTD policies exclude coverage for pre-existing conditions. The essence of a pre-existing condition exclusion is that coverage will not apply if you are disabled due to a condition you had before the insurance policy became effective. Insurance companies frequently rely on pre-existing condition exclusions to limit or deny benefit coverage, but there can be ways around it. For example:

• the fine print may state that the exclusion only applies if you received medical treatment or took medication for the condition within a specified period before the policy came into effect (e.g., during the 12 or 24 months immediately before the effective date of coverage).

• the fine print may state that the exclusion does not apply if the start date of your disability is a certain amount of time after the policy came into effect (e.g., you’re still covered if the disability didn’t start until more than 12 or 24 months after the effective date of the policy).

It’s recommended that you contact an Oshawa, Lindsay, or Ajax long term disability lawyer ASAP if your LTD insurer cites a pre-existing condition exclusion as the basis for your claim being denied. In our experience, insurers over-rely on these types of exclusions, and it may be possible to overturn the denial.

2.  Elimination Period

Many people are shocked to find out that they won’t begin receiving benefits right away when they go off work due to a legitimate disability. Every long-term disability plan contains an “elimination period" or “qualifying period,” which is the waiting period between the start of your disability and the date you begin receiving LTD benefits.

The length of the waiting period varies from policy to policy, but it’s usually between 90 to 180 days. That means you won’t get LTD benefits for several months after your last day of work, depending on the wording of your plan. You’ll need to consider other income sources to help you out during the elimination period (e.g., short-term disability benefits, Employment Insurance, personal savings). 

3. Appropriate Medical Care and Treatment

Your disability insurance policy will make coverage contingent on you being under the regular care of a physician and receiving appropriate treatment. The fine print surrounding terms like “regular care” and “appropriate treatment” give insurers a lot of leeway to unfairly deny claims.

Insurance companies will cite the fine print to reject your claim or cut benefits off if they believe you aren’t under a doctor’s regular care or aren’t getting medical treatment, regardless of the reason why (e.g., you live in a remote area, you’re between doctors, you’re on a wait list or having trouble getting treatment).

In other cases, they’ll disagree with the treatment plan prepared by your doctor or disagree with the type of medical professional you’re seeing (e.g., they may reject your claim because you aren’t seeing an appropriate specialist). Reach out to a long-term disability lawyer to protect your rights and interests if your claim is unfairly rejected for any of those reasons.

4. Disability Definition Changeover

It’s very common for LTD policies to contain two definitions of disability. The first definition is usually based on whether your disability continuously prevents you from performing your own occupation. That definition will apply during the initial period, which is typically 12 to 24 months.

Once that initial period has passed, the definition of disability changes, such that you are only considered disabled if you are continuously unable to do any occupation for which you are suited for by reason of education, training, or experience. Many people are surprised that they have to reapply for benefits when the disability definition changeover approaches—and shocked to find out that it’s even more challenging to qualify at that point.

5. Length of Benefit Period

Once you qualify, how long will benefits last? The answer to that question lies in the fine print. Each LTD policy sets out the “benefit period” which is the upper limit on how long benefits will last, assuming you continue to meet your policy’s definition of disability. Some policies will provide benefits until a specific age (e.g. age 65), while others have a fixed benefit period (e.g., 5 years, 10 years).

Another bit of fine print that may surprise you: your policy may contain a mental illness limitation that applies to certain conditions such as depression and anxiety. A mental illness limitation clause will limit benefits to a shorter time period (typically one to two years, but it varies by policy).

Reach Out for Advice From a Long-Term Disability Lawyer

Ajax, Whitby, Lindsay , and Oshawa residents facing a long-term disability that impacts their quality of life are often blindsided by insurance claim denials. If you find yourself in that situation, contact the legal professionals at Kelly Greenway Bruce for advice and support. Our long-term disability lawyers have extensive experience contesting benefit denials.

Contact us today for a free case evaluation by a long-term disability lawyer. Ajax, Whitby, Kawartha Lakes, Durham Region, GTA and surrounding areas are served from our offices in Oshawa and Lindsay.  We will fight tirelessly on your behalf to ensure you get the benefit you deserve.