This informational page was created for Canadian long term disability insurance policyholders who have submitted a claim that has been denied. It explains what to do once you have received a denial letter from your long term disability (LTD) insurance carrier.
By providing a no-nonsense description of how the appeal process works, the kinds of decisions you will need to make, and what to expect, the hopes are that you will more quickly and painlessly get through a difficult time and get on with your life.
The last thing you should do is give up hope. Lots of successful claims were initially turned down but, after progressing through the right steps, they eventually went on to get approved or a settlement was reached with the insurance company.
Our personal injury lawyers can meet with you for a free initial consultation. Call (416) 364-2000
Taking the Right Steps Toward Success With Your Claim
But what are ‘the right steps’? Unless you’ve been through the process before or unless you’re an injury law lawyer who’s used to handling claim denials, it’s hard to know what to do next.
That’s what this guide is for — to help you understand the process and clearly see that you do have options before you. Then, and only then, will you be able to make informed decisions so you can take the course of action that brings the best results and which benefits you the most.
Private Insurance vs Canada Pension Plan Disability Claims
This guide explains the appeals process for policyholders who have insurance through their employers or through an independent agent (“private insurance”). This guide does not cover the appeal process for Canada Pension Plan (CPP) disability benefits. The CPP disability program operates under a completely different system than that of private insurance companies. As such, it has its own unique set of rules and processes for making claims and appealing denials of coverage. Nevertheless, a successful application for CPP disability benefits is an integral part of being able to resolve your denied long term disability claim with private insurance companies.
Part One: Understanding LTD Claim Denials
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LTD Claim Denials are Common
Your denial letter really shouldn’t come as a surprise.
Canadian policyholders of long term disability insurance suffer some of the highest rejection rates in the world. While we don’t have stats on how many claims are denied by private LTD insurance companies like Manulife and Sun Life, we can only assume the rate of denial is even higher than it is with CPP. CPP’s denial rate hovers around 60 percent, so it’s far more likely that your claim will be denied rather than approved. If the denial rate for government based disability claims is around 60 percent, one can only imagine what the rate would be for private insurance companies who are under no obligation to publish denial statistics.
But don’t be discouraged. Many people whose LTD claims were ultimately successful started out right where you are now: holding a claim denial letter and wondering what to do.
It’s Typical to Fight a Denial of Benefits
Since denials are so common in the insurance industry for Long Term Disability claims, it’s not uncommon for people to fight those decisions. If you should decide to appeal the decision that was made by your insurance company, you will be joining thousands of North Americans who do so each year. Unfortunately, the reality is that the internal appeal process is largely a waste of time which is why there are lawyers who restrict their practices to helping people go through a different type of appeal process eg. an external appeal process and/or a lawsuit. They are usually personal injury lawyers who have built up a portfolio of experience in this area.
We’ll cover personal injury lawyers and how they work later on in this article. For now, let’s focus on the denial letter and what it means for you.
The Denial Letter
The denial letter is an important document that is sent in the mail by insurance companies. It’s sent in response to an application for long term disability benefits when, in the insurance company’s view the claim has not been approved. Some people receive a termination letter, which is another type of denial. Termination letters are sent to policyholders who had been receiving LTD benefits but which are now cancelled.
Both types of letters can be appealed.
Denial letters are usually lengthy and should include the following:
- Definition of “disability” per your policy
- The provisions of your policy — i.e. what your contract covers
- The insurer’s reason for denying your LTD benefit
- Information from your medical reports to substantiate the denial
- A date
That last bit of data from your letter may sound unimportant but it might possibly be the most important part of the letter: the date the letter was written. That date marks a crucial point in time for your entire appeals process. It basically starts the clock ticking on the deadlines that you’ll have to meet should you decide to file an appeal.
Even if you skip the internal appeals process and proceed directly to the external appeal (don’t worry if you don’t understand the difference — it’s explained below), this date is likely the starting point for any type of appeal.
What to Do if You Can’t Find Your Denial Letter
As you can see, it’s important to have your denial letter in hand. If you have lost it, there are several ways to get another copy:
- Contact your plan administrator and ask for a copy
- Contact your plan advisor and ask for a copy
Even if you’re not sure at the moment whether you are going to appeal the decision, it’s a good idea to find your denial (or request a copy if you’ve lost it) anyway. That ensures that if you do indeed decide to make an appeal, you’ll be able to hit the ground running.
Remember: the LTD appeal process is subject to tight deadlines and you don’t want to stretch things out. Avoid all unnecessary delays!
Part Two: What is an Internal Long-Term Disability Denial Appeal?
We’ve already touched upon the two different types of appeals that you can make after receiving a claim denial letter. In order to decide which avenue to pursue, you’ll need to fully understand what it means to make an internal appeal. In our experience, internal appeals are often a waste of time and only help insurers hold onto their money for a longer period of time. It is a classic delay tactic. Nevertheless, in the rare occasion, they can be successful.
What an Internal Appeal is For
An internal appeal means you are asking your insurance company to take another look at your claim. You are hoping they will change their mind after reviewing your case and considering the new evidence that you will provide.
The people who will be reconsidering your claim will be employees of the insurance company. They are bound by law to honour legitimate claims but it is not in the company’s best financial interest to reverse their original decision.
Your denial letter should have explained the reason for your denial. Additionally, it should have given you guidance on what information you’ll need to provide in order to make an appeal. You may need to gather more medical documents, get more medical tests, or provide more information from your employer.
If you make an internal appeal, your file with the insurance company will grow. They will be able to show regulators and/or the Court that they have worked diligently with you on your claim and your appeal. They are satisfying their obligation to handle your claim and appeal in good faith.
Internal Appeals Take Time
The internal appeals process can take lots of time. One reason for that is the guidelines are usually vague and deadlines aren’t often all that clear. There are, in fact, no formal guidelines that have been established when it comes to formal appeals. The only part that matters, legally, is that there is a process. If that process happens to take a long time, it can mean you could miss other important deadlines concerning a possible external appeal eg. a lawsuit.
That is why you must think carefully before you enter the internal appeals process.
Why the internal appeal system may be a waste of time
In some cases, engaging the internal system can make sense but very often, it can turn out to be a waste of time.
The reason for this is that insurance companies are required by Canadian law to provide an appeal process to their policyholders. You see, long term disability insurers are obligated to consider your case when you make your original claim. It’s a good-faith agreement that they are required to make with their customers. The law dictates this.
As part of the good faith agreement insurance companies are obligated to make with their policyholders, there must also be a clear appeals process. Called a “complaint” system, it’s meant to provide a simple, convenient way for people to appeal a denial.
While that may be true, it’s very often the case that while the internal appeal process is simple and convenient, it does not result in a reversal of the original decision.
Part Three: What is an External Long-Term Disability Denial Appeal?
To make an external appeal is to “start an action”. In other words, it means taking your appeal outside the domain of the insurance company and involving a neutral third party. Already, this is a vast improvement for the outlook of your case. With the internal process, the people reviewing your case are not neutral. They work for the insurance company.
In many cases, the third party that reviews your claim is the legal court system of the Canadian government. But sometimes it’s merely a tribunal and your case is heard by an adjudicator in a much less formal environment than a court of law.
In layman’s terms, bringing an external appeal means to sue your insurance company. Whether it’s before a tribunal or a court, you are working within an entirely different set of circumstances than you would in an internal appeal. Under the legal system that you are now working within, you now have legal rights concerning getting your case heard.
Again, don’t worry about the magnitude of suing a large insurance company. It’s not as dramatic and encompassing as it sounds. In fact, it’s actually quite common for policy holders who have been denied their LTD claims to file an external appeal. Some even consider it to be the only viable option in many cases.
Tribunal Hearings vs Court Cases
In a tribunal hearing, you will come before a panel of decision-makers and plead your case. Generally, this applies to employees who are represented by a union. It’s not a trial and you are not required to hire a lawyer. You will attend an appeal hearing with the adjudicator, who is also sometimes called an arbitrator. Since you are limited to filing for a reinstatement of your LTD payments and past benefits owed, some people opt to take their claim directly to the courts instead. The tribunal process is informal. For claiming damages or other more complex resolutions to your appeal, you’ll need to take your case to the courts.
While the tribunal system is informal, court actions, on the other hand, are characterized by a complex legal procedure that occurs before a judge and possibly a jury. Your case will be heard by a judge in the provincial Superior Court and it’s usually advised that you hire a lawyer.
Filing a lawsuit in the courts gives you a few advantages:
- You may claim damages such as:
- Past benefits owing;
- Compensation for mental stress;
- Punitive and Aggravated damages;
- If you win your case, the court compels your insurance company to pay your legal fees. The same holds true if you settle
As you can see, the courts have more power than a tribunal panel. If you are interested in the possibility of settling with your insurance company for a one-time payment, then a lawsuit through a court action is the way to go.
Part Five: What Kind of Appeal Should You Make?
Should you file an internal appeal first or skip that step and begin with the external appeal or lawsuit? The honest answer here is that there no single answer that works for every individual. Even after you’ve learned the difference between the two types of appeals, you might still be grappling with the decision.
Something to take into account is deadlines. Is the deadline to file an appeal fast approaching? If so, it may make sense to skip the internal process, since it’s common for those appeals to drag on due to vague guidelines and redundant processes. In such a case, an external appeal may make more sense. If you want a settlement or one time final payment with the insurance company, then a lawsuit is prefered path. However, if you want to receive your monthly benefits and continue to interact with the insurance company indefinitely, then an internal appeal should be considered.
When it Makes Sense to File an Internal Appeal
At this point, it may sound like a no-brainer to skip the internal review and begin your case with an external appeal or lawsuit. However, there are actually some instances where it makes more sense to file internally first:
- A missed doctor’s appointment. When your claim was denied simply because you missed a doctor’s appointment. Once you have attended that appointment, you can submit an internal appeal with a more reasonable chance of success.
- Medical clarifications needed. Sometimes a claim is denied immediately because the insurance company needs some sort of simple clarification from your doctor. Once that is supplied, the appeal can move forward.
- A skipped treatment. Like a missed doctor’s appointment, a skipped treatment session can simply be fulfilled and the insurance company will re-open your case.
As you can see, these simple reasons for denial of your benefits are mainly oversights that can quickly and easily be fulfilled. Satisfying these requirements won’t guarantee approval but they do indicate situations where it may be wise to follow the internal appeal process first.
When it Makes Sense to Start With an External Appeal
Sometimes the reason for your denial of benefits is something that can’t be “fixed” through the internal appeal process. These types of situations will require the intervention of a third-party system via an external appeal. They are best handled by a lawyer who is experienced with claim denials.
- The company doctor has examined you. Once the insurance company has sent you for an exam with their own doctor, it’s time to elevate to an external process because they will not reverse their decision when they have medical evidence to back their case.
- There’s a technicality. There’s no getting around a technicality with insurance companies. These include non-medical reasons for denial such as pre-existing conditions or missed deadlines.
- They say you’re not under medical care. If the insurance company feels that you are not under the care of a doctor or you are not receiving proper and regular medical treatment, all bets are off and they can “rightfully” deny your claim. This can be appealed in the courts.
Deadlines are Almost Always a Determining Factor
One common line of thought among people who’ve been denied benefits is that they’d like to exhaust every avenue of appeal before “resorting” to suing in the court system. However, there’s one factor that trumps everything and that’s the deadline for filing a personal injury case.
The general limitation on filing personal injury cases is two years. However, there are instances when claimants have only one year to file their external appeal. If you feel unsure about your deadlines, it might be a good idea to have a personal injury lawyer review your case with you. They can also review the terms of your policy and the details of your denial letter to help you understand your case and help you decide which fork in the road you should take: internal or external appeal.
It may also help to see what it’s like to file an internal appeal with two of Canada’s largest insurance companies: Manulife and Sun Life.
Part Six: What it’s Like to File an Internal Appeal
The Manulife Appeals Process
Lots of Canadian workers have LTD insurance through their employers. Manulife is a large provider of group insurance plans and as such, handles a lot of disability claims. If your policy is through them, here’s what their complaint system looks like.
Many group policies that are offered through employers have a plan administrator to handle claims and appeals. If there’s one at your work, then you’ve already been in touch with them when you filed your claim. That’s good since that’s the person you’ll start with when you enter the complaint system after you receive your denial letter.
If not, then you may have already been in touch with your Manulife Advisor. This is the person you’ll want to contact for answers to your initial questions about your claim. Although speaking to them carries some risks so be cautious.
(Later on, whether you have Manulife insurance through work or privately, your administrator or advisor may prove useful again should you decide to pursue an external appeal.)
Be Careful When Working With the Plan Administrator/Advisor to Get Answers to Your Questions
If your claim gets denied, you should be cautious when speaking to the plan administrator. Statements or answers given may backfire and can be used again you at a later date. Not all Manulife contracts are created equal and the plan administrator can help define terms for you. Some denials hinge around the difference in how certain industry terms are defined as per your contract. So if you have questions, you will be better off speaking to a lawyer than your plan administrator or advisor.
“Own Occupation” Disability
Here’s an example. In some contracts, the term “totally disabled” means you’re unable to perform the work of your own occupation (teacher, welder, etc) but you still might be able to perform other types of work that you were not hired to do.
This is called an “own occupation” definition of disability. The other definition of “totally disabled” is that you’re unable to perform the work of any occupation.
To confuse matters, some contracts start out with the “own occupation” definition and then switch after a period of 24 months to the other definition of totally disabled: “any occupation”.
These terms aren’t exclusive to Manulife contracts. They apply to all LTD policies.
Get Help Understanding the Terms of Your Contract and the Wording of the Denial Letter
The takeaway here is that you’ll need help understanding how your insurance company defines “totally disabled” and other terms if you’re going to begin an appeals process. This is the case no matter who underwrote your insurance policy. As is often the case with complex contracts like these, it’s all in how things are worded. A slight difference in the meaning of an important term can mean your claim gets denied.
If you don’t have access to a plan administrator to help you define things and answer questions, you can try calling Manulife and speaking to one of their representatives. This is not advisable and many people make this mistake. Alternatively, if you decide to start working with a personal injury lawyer on an appeal of your denied claim, they can do all the footwork for you in this area. They will speak to Manulife about the exact nature of your denial and then meet with you to go over the results in plain language. That way, you can feel confident that you know exactly what’s happening with your claim.
Here’s what to expect when your Manulife disability claim has been denied.
When you filed your claim, Manulife assigned you a case manager. The case manager is the person who has been checking up on you with your doctor to ensure that you are undergoing proper care for your condition. They will assess:
- Level of Function
- Appropriate medical treatment
Again, this is another point in your LTD claims process where things may have gone wrong. Very often, the denial is based on your case manager’s assessment of these three factors and the conclusion that you are not fulfilling the requirements.
When your claim was denied, you would have been sent a letter explaining why you did not qualify for benefits. The letter explains that you have 60 days to appeal. That’s 60 days from the date of the letter, not the date you actually get your hands on the letter and read it. You are also advised to submit an appeal under these conditions:
- The appeal must be in writing
- It must provide new information about your case
- Tests and medical reports are to be done at your expense
It’s not an ideal situation for most claimants who, because they may not be working, will have significant financial hurdles to climb over in the coming months. Adding expensive medical reports is not an enticing plan of action and often doctors will not provide a written report without payment upfront.
The Sun Life Appeals Process
As one of the top insurance companies in North America, Sun Life covers a lot of Canadian workers. If your long term disability policy is through them and your claim was denied, here’s what the complaint system looks like.
Sun Life offers a two-step appeal process. Like Manulife, they’ll send you a letter informing you of your denial. They will also provide you with a “helpful” list of information that’s needed in order to make an appeal. This is typical (and required) in the LTD insurance industry.
Sunlife does seem to have an extended version of the appeals process, however. As you’ll see below, it appears to cycle repeatedly through the same steps (write-and-wait), the difference being that each time, you’re sending your appeal to a different desk within their organization.
That can be a problem. Keep in mind that the longer claimants spend on the internal appeals process, the less time they’ll have if and when they decide to file an external claim or lawsuit through a lawyer. That can work to the insurance company’s benefit, as they will argue that the clock does not stop ticking on the external appeals timeline and deadlines will continue to approach.
- 1st appeal. This can involve two levels of reviews with Sun Life’s Abilities Case Manager. If they deny your claim again, you must wait for another denial letter to come in the mail. Then you can start the 2nd appeal.
- 2nd appeal. This is just a repeat of the first round of appeal but with a different administrative office: the Sun Life Management Unit.
- Independent review request. If the first two appeals are denied, you can then request an independent review. You would write to the Secretary DI Plan Board of Management, which reports to the National Joint Council. They’ll review the case and try and broker a bargain between you and Sun Life so a resolution can be made. They will make a recommendation to you or to Sun Life but that recommendation is not binding.
A Time-Consuming Appeals Process and a Ticking Clock
As you can see, the internal appeals process at Sun Life is lengthy (and possibly redundant)! Meanwhile, the clock is still ticking and winding down on that external appeals deadline. When deciding whether to enter the internal appeal process at Sun Life, you should take into consideration the timeline of their process and the approaching deadlines for taking your case to court and a lawyer.
Because of the low probability of denials being reversed through internal appeals and because of the lengthy internal appeal process, some people choose to skip this step altogether and go directly to a personal injury lawyer the moment they receive their denial letter.
Sun Life’s Disability Buyout Offer
Sun Life has another way of handling claims. It’s called a “disability buyout” or “settlement offer”. If you receive such an offer from Sun Life after submitting a claim on your long term disability insurance policy, don’t make a move without first consulting a lawyer.
The buyout offer from Sun Life is typically a settlement that’s worth a small percentage of the policy’s full value. It’s not an uncommon practice among long term disability insurance carriers but policyholders are usually advised to seek consultation with a lawyer. That’s so they can be sure they fully understand the terms of the settlement before making a decision.
A lawyer will explain your rights in a way that you understand what’s at stake and how your decision affects your denial and the right to appeal for your benefits after you’ve been denied.
Part Seven: What You Should Know About the Injury Law Process Timeline
One of the most important factors in your appeal is the deadline for filing a lawsuit. Unfortunately, it’s also one of the most confusing components for inexperience laypeople to understand!
The Limitations Act
In 2002, Canada passed the Limitations Act. This determines how long people have to bring a lawsuit and limits the timeline to two years. In an appeal case like what’s covered in this guide, that’s two years from the date that’s printed on your denial letter, at least that is what the insurance company will argue.
Time limits in Ontario can be shorter because certain types of legal actions come with a different set of rules. Suing your insurance company for failing to pay your claim happens to be one of the situations where the rules may be different.
LTD appeal cases often have shorter time limits. It’s quite possible that your lawsuit must be brought within one year as many insurers continue to argue that one year limitation periods apply to many cases.
But here’s where it gets confusing. Some cases are governed by the old pre-2002 limitation rules while others follow the Limitations Act to the letter. Others may be governed by a set of transitional rules.
Plus, you should also be aware that there is other legislation that governs specific parts of any personal injury lawsuit. The Limitations Act is not the only factor.
For all these reasons, it’s safer to assume that your time limit is just one year from the date of your claim denial letter. With this in mind, let’s now move quickly to what you should do to start your appeal.
Part Eight: Take These Steps to Start Your Appeal
Whether you choose an internal or external appeal, take these steps to start your appeal.
- Find your letter or request a copy
- Get a copy of your insurance policy
- Request a copy of your file from your insurance company
- Decide whether you want to hire a lawyer
- Determine exactly why your claim was denied
- Identify any gaps in the information that you originally provided with your claim.
- Hire Independent Experts
- Order a functional capacity report
- Order a vocational expert report
- Order a medical expert report to support your disability
- Gather evidence for your case in order to fill those gaps
- Missing medical records
- Additional medical tests
- Written testimonies/opinions from your doctor(s)
- Written testimonies from non-medical experts
- Clarify parts of your original claim that need it
The so-called “non-medical experts” whose testimony could help your case include the following types of people:
- Vocational experts
Vocational experts are especially helpful if your LTD policy was an “any occupation” policy. Under these types of contracts, “disability” is defined as not being able to work any type of job, not just the job you currently have. They have expert knowledge of the types of jobs someone with your disability is able to handle.
Build Your Case With Supporting Evidence
If you do decide to hire a lawyer to help you with your case, one of the initial benefits that you might realize is that steps 5-8 in the process outlined above will be taken care of by your lawyer.
Filling in the gaps and clarifying your case can be a lot of work. In addition to what was listed above, you may also need to:
- Clarify the functional limitations that you are experiencing as a result of your disability
- Clarify the precise requirements of your job, including the physical demands
- Outline your work history in more detail
- Explain how your disability (and the limitations it imposes on you) prevents you from doing your job
- Describe your diagnosis in further detail, possibly giving new evidence
Part Nine: Hiring a Long-Term Disability Lawyer
What is a Long Term Disability Lawyer?
As we mentioned earlier, LTD insurance denial of benefits isn’t rare. Thousands of Canadians receive denial letters each year. To support them and to facilitate the appeals process, there are personal injury lawyers who restrict their practices to navigating the Long Term Disability appeals process for their clients.
These lawyers typically have a long history of representing people who have long term disability claims that have been denied. As such, they are familiar with the common insurance underwriting companies, the industry jargon, the types of insurance contracts that are typically held by Canadian workers, exceptions to the Limitations Act, and the common reasons given for denial. This type of experience provides a resource-rich network of support for Canadians who wish to appeal a denial of LTD benefits.
How do Long Term Disability Lawyers Get Paid?
When you’re looking for a personal injury lawyer to handle your case, it makes sense to look for a firm that handles cases like yours on a contingency basis. This means the attorney gets paid from the proceeds of your case. A typical range of payment is around 30-33% of the amount of your settlement relating to your damages only. However, in Ontario, the insurance company will help pay your legal bill which further reduces the contingency fee percentage. If your settlement isn’t given in one lump sum, you’ll your lawyer will generally have a different formula on how their fees will be determined and paid out to them.
Be sure you understand the percentage that goes to your lawyer before signing a contract with them. Keep in mind, however, and like anything in life, you get what you pay for.
If your case is not successful, you will not owe the lawyer any fees. You will, however, still owe for expenses.
Here are some of the expenses that are typically covered by your lawyer up front. They are usually considered separate from the lawyer’s fees that are charged when you win your case:
- Filing fees
- Fees for obtaining medical records
- Fees to pay independent experts for their opinions
- Copying costs, postage and communication costs
- Travel expenses
When Should Someone Hire an LTD Lawyer?
Some would say it’s never too early to hire an LTD lawyer. There are people who hire one to help them with the claims process and then continue to work with them if their claim gets denied.
A lawyer will not only act as your representative in all dealings with the insurance company, they will also help you in a number of other ways. For example, they can work to ensure that your claims file is complete. They know the right questions to ask your doctors in order to obtain a complete medical opinion for your case.
In addition, they can find and hire the vocational expert that your appeal might call for. They’ll also make sure your case proceeds in a timely manner so you don’t miss deadlines. Finally, they can help negotiate your settlement so that your relationship with the insurance company can come to an end.
If this page serves any purpose, we hope it keeps you from getting discouraged about your claim. Denials are common but successful appeals are possible too. You greatly improve your chances of success with patience, persistence, and the help of an experienced lawyer.
You’ve already taken the first two steps by making the effort to understand the appeals process — that takes patience and persistence! Now it’s time to decide if you’re going to take step three — getting help from an experienced personal injury lawyer who has experience helping people with their long term disability claims. LTD appeals are much too important to be handled by a generalist who is not familiar with disability law. To make the most of your claim, make sure your lawyer has the skills to successfully present your claims appeal and the experience to give you your best shot at a successful outcome.