I wrote this guide for people who need to win long-term disability benefits.
Inside, I cover the most important parts of the claim process. I talk about applying, appealing a denial, and other common issues you will face.
I based this guide on my fifteen years of experience as a disability lawyer. It gives you an overview of the most important topics. However, I include links to articles that go into more detail on sub-topics.
I know you’re on the right track. And I know that because you’re here. You’re already doing your own research!
Educating yourself about long-term disability is the best way to improve your chances of success. With this guide, you will learn to make better choices. Those choices will bring better results.
- Don’t have time to read the Guide Now?
- The date of disability
- What happens after two years? Change of definition date
- Pre-existing conditions
- Internal appeals
- External appeals – Lawsuits
- External Appeals – Union Arbitration
- Continuing medical review
- Treatment and rehabilitation programs
- Independent medical examinations
- Offsets and integration of benefits
- Can they force me to apply for Canada Pension Plan disability?
- Insurance Companies
- Public sector
- Don’t forget to take this guide with you
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What are long-term disability benefits?
Let’s start with the basics. Insurance companies make monthly payments to people who can’t work because of illness or disability. These are what we call long-term disability benefits.
The payments can be a percentage of your regular work income — 65%, for example. Or, they might be a fixed amount — $2000 per month. These payments can last for a fixed period of time — 5 or 10 years, for example. Or, they can be paid until you reach age sixty-five.
For more clarity, see our article on the difference between short- and long term disability.
Who is eligible for long-term disability?
To be eligible for long-term disability, you must be covered under a plan. There are only two ways to have disability coverage. First, your employer has a group medical plan that includes long-term disability benefits. Or, second, you bought a long-term disability policy from an insurance broker. You must fit one of these situations.
All group disability plans have a waiting period. This is also called the elimination period. Your payments don't start right away. Instead, you only qualify for benefits when you have been off work for several weeks. This time off work is called the waiting period. During this time, you can get other short-term disability benefits or EI.
The elimination period might be shorter if you buy your own policy. This is common with self-employed professionals — doctors, lawyers, dentists, veterinarians, and chiropractors, for example.
All disability plans have terms like "total" or "partial" disability. What counts as full or partial disability is unique to each policy. Each plan will have different text, so you need to understand the wording that applies to you.
What medical conditions qualify for long-term disability?
Almost any illness or injury can qualify for long-term disability. Insurance companies do not approve claims based on a diagnosis. Rather, they focus on the disability caused by your medical condition.
It's possible to have a serious diagnosis but not be disabled. For example, you may consider the diagnosis of Multiple Sclerosis (MS) to be very serious. However, many people with MS aren't totally disabled. At least not right away. So, insurance companies deny many disability claims for MS. The reason for denial is that the symptoms are not serious enough yet.
Your diagnosis alone won't get you approved for benefits. However, insurance companies do want to see a solid diagnosis. This is because a diagnosis will shape your treatment plan. And your insurance company will only approve your claim if you have a treatment plan. Moreover, it can't just be any plan; they have to agree with it.
If they don't agree with your treatment, then they can deny your claim or stop your payments.
Check out these articles on disabling medical conditions to learn more:
- Back Problems & Conditions
- Bipolar Mood Disorder
- Carpel Tunnel Syndrome
- Chronic Fatigue Syndrome
- Chronic Pain
- Complex Regional Pain Syndrome
- Crohn’s Disease
- Heart Disease
- Headache and Migraine
- Irritable Bowel Syndrome (IBS)
- Knee Disorders
- Lyme Disease
- Multiple Sclerosis
- Neck and Cervical Disorders
- Psoriatic Arthritis
- Sleep Disorders
- Vestibular Disorders
- Visual Disorders
How to apply for long-term disability benefits
Always start by asking if this is the right time to apply for long-term disability.
If you're ready, then you can send in an application to your insurance company. All insurance companies in Canada have the same process. The application includes three forms:
- Notice of Claim
- Employers Report
- Medical Report
You can get these forms from your employer. Or, if you are already dealing with the insurance company, they may give them to you. You have to arrange for everyone to fill out the forms. Firstly, you fill out the notice of claim. Next, your employer fills out an employer’s report. Then, your doctor fills out a medical report. Finally, you send all three reports to the insurance company. They will make the decision to approve or deny your claim.
To learn more, read our guide to applying for long-term disability.
Important long-term disability concepts
The date of disability
All disability claims include a date of disability. In other words, the first day you missed from work. To qualify for long-term disability, you must be off work continuously for 17 weeks or more. This date also determines when your waiting period starts.
What happens after two years? Change of definition date
Your insurance plan has criteria you must meet in order to be “disabled.” These are called the definition of disability. However, most disability policies have two definitions.
The first is disability from doing your regular job.
The second is disability from any other employment.
Insurance companies refer to these two definitions as the “own occupation” and “any occupation” clauses. Most policies have a date when one definition stops and the other begins. This usually happens 24 months after the date of disability.
In other words, the change of definition happens when your plan changes clauses — from “own" to "any" occupation.
Insurance companies often stop payment of benefits at this point. Your disability might prevent you from doing your own job. But, the insurance company might argue that you can do other work. Or, they may say you can do part-time work. Either way, when your definition changes, the company will try to cut off payments.
The time leading up to the change of definition is stressful. This is because it's common for insurance companies to put pressure on you. They will send you to their doctors or arrange other assessments. They gather information to show that you “should” be able to go do other work, even if you can’t go back to your usual work.
All disability policies have exclusions for coverage. In other words, if certain things are true, then they don’t have to pay you. This can happen even if you meet all the other criteria. These are called exclusions. The most common exclusion is for a pre-existing condition.
Pre-existing conditions are tricky from a legal point of view. If the insurance company raises this as an issue, then you should seek legal advice immediately. Common sense doesn't apply to these exclusions. You might make a mess of things without legal help.
So, what is a pre-existing condition? How do you know if you have one? The answer is complicated. Pre-existing conditions are treated differently. But, it depends on the type of disability policy you have — group policy or individual policy.
Pre-existing conditions in group policies
Let’s start with group policies because they are more common. For group policies, pre-existing conditions are only an issue if you make a claim quickly. For example, there might be a problem if you make a claim within the first year or two of being in the plan.
So, the insurance company will review your enrollment forms. They want to check if you had the same condition when you enrolled in the plan. If you did, then that counts as a pre-existing condition. In that case, they may not have to pay you.
On the other hand, if you file your application after one to two years, then the exclusion no longer applies. It doesn't matter if you had the condition when you enrolled in the plan.
Pre-existing conditions in individual policies
Individual policies are different, however. Pre-existing condition exclusions are always active. It doesn't matter when you apply for benefits. If they can prove you didn't tell them that you had the condition when you bought the plan, then they can refuse to pay.
Appealing a denial of long-term disability
The insurance company will either approve or deny your claim. If you disagree with a decision, then you can appeal it. There are two types of appeals: internal and external.
Do you need to appeal? Check out our 7-step process to appeal a long-term disability denial.
Start the appeal by asking the insurance company to reconsider the decision. You have to request this in writing. There is a deadline to request. Once you make the request, you need to give them new information to consider. This might be medical records or a new medical report. Or, it could be a letter you write to them.
The insurance company will review the new information and make another decision. Normally, they will put this decision in writing. This process is called an internal appeal. It is “internal” because it only involves employees of the company. It doesn't get handled by an outside judge. Most insurance companies allow 2-3 rounds of internal appeals.
The deadlines for internal appeal are often flexible. However, there is a hard deadline for you to file your legal appeal.
We recommend a 7-step process for doing your appeal. However, you may not want to do all three internal appeals. Sometimes it's better to go straight to an external appeal.
To learn more read our article on when to avoid internal appeals.
External appeals - Lawsuits
As above, the insurance company employees are the decision-makers for internal appeals. This means the company has full control over their appeals. External appeals are different because the decision-makers are independent. So, they have no ties to the insurance company. With external appeals, it's a level playing field.
A legal appeal is the most common external appeal. This appeal is handled by the court system and a judge (or jury) makes the final decision. You start this appeal process by filing a lawsuit against the insurance company.
Filing the lawsuit is an important turning point because it changes the claim dynamic. The insurance company brings in a new team of people. So, this team hasn't been involved in your claim or internal appeals. This team includes a senior claims manager and a lawyer. Both of these new people will look at your situation with fresh eyes.
Often, this new team will recommend an approval right away. Sometimes they need more information from you, but it usually happens quickly. They might need more documents, or to hold an interview with you with your lawyer. Sometimes the only way you can get approved is to file a lawsuit.
You have a deadline to file your legal appeal. It will be one or two years after the insurance company denies your claim. You must not miss the deadline. If you do, then you lose all rights to compensation.
External Appeals - Union Arbitration
With some disability plans, you don't have the right to a legal appeal. If that's the case, then your final decision will come from arbitration or hearing panels. The rules for these hearings come from your union's collective agreement. Sometimes insurance companies can refuse to follow the arbitrator’s decision. So, the hearing process is little more than a sham.
Insurance companies sometimes pay settlements. In other words, you would get a one-time payment for past and future benefits instead of monthly payments. Settlements are most common during legal appeals. The insurance company will offer to settle rather than go to trial. The amount of the lump sum settlement can vary widely from case to case.
Lump-sum settlements are less common for people receiving benefits. If you're on an approved claim, you can't try to get a settlement. That typically doesn't work. Insurance companies will make the offer if they want to. They only do this when it makes financial sense for them. You can read our article on long-term disability lump-sum buyouts to learn more.
Rules for long-term disability benefits
The rules for long-term disability plans come from three sources:
- Your disability plan or policy
- The insurance laws for your province
- The common law of Canada
Every disability insurance policy is unique. So, you have to read your plan to know your rules. Your plan is set out in a group benefits booklet. You can usually get this from your job.
Each province has different laws for insurance. Be careful when looking at cases outside of your own province.
Finally, the ultimate source of rules is the common law of Canada. The common law comes from judges’ decisions on past cases. So, these decisions involve people just like you. The principles from those cases can apply to your claim.
After approval of long-term disability benefits
You still have to deal with the insurance company after they approve you for long-term disability. They will monitor your condition and treatment. They may ask you to see a doctor. Or, they might enroll you in a treatment program. But ultimately, it's your responsibility to follow the rules of your plan.
So, to keep your benefits, you must carefully manage your relationship with the insurance company. You will need to do what they ask, even if you disagree with it. The following are common issues that happen after claim approval.
Continuing medical review
You have to keep proving your disability even after you get approved. This is called continuing medical review.
Typically, the insurance company asks your doctor for updates. They might ask every month, or every six months. It might only be once per year. Whatever the case, the insurance company has a right to these updates. You have to cooperate with them. Otherwise, they can stop your payments.
Covid-19 has presented challenges for continuing medical review. For more information, we have an article about how the pandemic has affected disability claims.
Treatment and rehabilitation programs
Insurance companies can force you to attend treatment and rehabilitation programs. For example, they may send you for psychological treatment. Or, they can enroll you in physiotherapy programs.Not every policy has the right to do this, but most do. So, make sure to check yours. They can't force you to go, but can stop payments if you don't.
Independent medical examinations
Insurance companies can send you to a doctor of their choice. This type of exam is known as an independent medical examination or IME.
The purpose of an IME is for the doctor to give an opinion. This doctor doesn't treat you, however. So, they don't replace your doctor or specialist.
After your visit, the doctor sends a report to the insurance company. In the report, they answer questions for the insurance company. The report also includes the doctor's opinions about your conditions, treatments, and disability.
You might not want to see these doctors. Some common objections are that it's too far to travel. Or, the doctor's specialty doesn't match your condition. Another is that the doctor will say bad things about you. Or, maybe they have terrible reviews online.
Your concerns are all valid. But, you still need to attend the exam. The insurance company has the right to send you to their doctor. If you refuse to go, then they can stop your payments.
Go to the medical examination in good faith, even if the doctor has terrible reviews. You may be pleasantly surprised by the results. Sometimes the doctors will give opinions that support you.
We have a 3-part series of articles about IMEs:
- Part 1: What is an Independent Medical Examination? How to prepare, and what you have to know before going in
- Part 2: Independent Medical Examination: Tips for Success
- Part 3: What happens after an Independent Medical Examination?
Offsets and integration of benefits
It's common for insurance companies to reduce your disability benefit if you get other payments. In other words, they offset their payment — usually dollar-for-dollar. So, for example, let's say you start getting a CPP disability payment of $900 per month. In this case, your insurance company reduces their payment by $900 per month.
Other offsets include money you get from workers' compensation, personal injury settlements, severance payments, or CERB payments, to name a few.
For more information, check out: 6 Reasons to Apply for CPP Disability, Even Though Your Insurance Company Gets All the Money.
To read more about the steps you can take when your insurer has overpaid you, read our article: LTD Overpayment because of CPP Disability Retroactive Payment: What are my options?
Can they force me to apply for Canada Pension Plan disability?
Yes, an insurer can force you to apply for CPP disability. The policy gives them this right. Most policies do this, but not all. Technically, you can refuse to apply. But if you do, then they will just guess what CPP would pay you. Then, they can deduct it from their payment.
They can also force you to apply for other benefits, including:
- Worker's compensation
- Medical pensions
- Other disability insurance policies
Insurance companies hire private investigators all the time. They do video and online surveillance. They try to get you on video doing things you said you couldn’t do. Or, they find things online that make you look bad.
But you won't always be under surveillance. It happens more if you're young, or if you have high payments. It also happens more if you have been getting benefits for over two years. Basically, they want to keep their money.
I have seen lots of surveillance videos of my clients. They rarely prove a person to be a liar. But, they can show inconsistencies, and insurance companies will make a mountain out of a molehill. You might take five steps when you say you can't walk, for example. If they record you doing this, then it can hurt your credibility. Unfortunately, that is their goal: to make you look like a liar.
So, is it legal? Yes, as long as investigators stay in a public space. This gets a little weird. They can record you on your property if they are standing on a public sidewalk, for example.
Online surveillance happens too, but it's limited to the investigator viewing what's publicly available online. Check out our article, Surveillance and Long-term Disability Claims, for more information.
Employment termination and long-term disability benefits
"Can I be fired while I am on long-term disability?" We get this question all the time.
Unfortunately, the short answer is yes. Generally speaking, employers can fire employees at any time. They just can't fire you because of your disability — that would be a human rights violation. Legally, they have to provide termination or severance pay.
You may have a legal claim against your employer in some cases. Firstly, if you are terminated without severance pay. You would also have a case if you believe it was because of your medical condition or disability. You can win compensation in court.
Most employers won't terminate you if you're on long-term disability because they know it looks bad. They want to avoid lawsuits and human rights claims. Therefore, cautious employers will allow you to be on sick leave for up to two years.
After two years, your employer may have the option to terminate you without cause. This means they would only have to pay the minimum severance allowed under provincial laws. This type of termination is based on the frustration of employment. This is a complicated area of law. If this is your situation, then I urge you to get specific legal advice.
List of long-term disability insurance companies and plans
Following is a list of long-term disability insurance companies in Canada:
- ACA Insurance
- Assumption Life Financial Services
- Blue Cross Life Insurance Company
- BMO Life Assurance Company
- Canada Life Assurance Company
- Canadian Tire Life Insurance
- Cigna / Life Insurance Company of North America
- Co-operators Life Insurance Company
- Desjardins Financial Security Assurance Company
- Empire Life Insurance Company
- Fenchurch General Insurance Company
- IA Excellence Life Insurance Company
- Industrial Alliance Life Insurance
- Industrial Alliance Pacific Life
- La Capitale Life Insurance
- London Life Insurance Company
- Manulife / Manufacturers Life Insurance Company
- Medavie Blue Cross
- Morneau Shepell
- Primerica Life Insurance Company
- RBC Life Insurance Company
- Sun Life Assurance Company of Canada
- Standard Life Insurance Company
- SSQ Life Insurance Company
- ScotiaLife Financial
- UL Mutual Company
- Wawanesa Life Insurance Company
Disability insurance companies are members of the Canadian Life and Health Insurance Association (CLHIA).
The following is a partial list of non-profit long-term disability plans in Canada:
- OHA Disability Income Plan (HOODIP 1992)
- Ontario Teachers Insurance Plan (OTIP)
- Nova Scotia Public Service Long-term Disability Plan (Manulife)
- NSAHO LTD Plan (Manulife)
- Nova Scotia Teacher's Union LTD Plan (Manulife)
- PEI Public Sector Group Insurance Plan (Great-West Life)
- New Brunswick LTD Plan (Blue Cross)
- New Brunswick Teachers Union LTD Plan (Manulife)
- Newfoundland and Labrador Public Sector LTD Plan (Great-West Life)
- PSAC LTD Plan (Sunlife)
- SISIP LTD Plan (Manulife)
Complaints against disability insurance companies
Each province has a government agency that regulates insurance companies. If you need to file a complaint against an insurance company, then you need to send it to the right agency for your province.
- Nova Scotia
- New Brunswick
- Newfoundland and Labrador
- Prince Edward Island
- British Columbia
- Northwest Territories
Long-term Disability FAQs
Let’s conclude with some frequently asked questions. The following are answers to the most common questions people ask us about long-term disability benefits:
Long-term disability is a monthly benefit. Insurance companies pay it to eligible workers. It's for people who can't work because of illness or disability.
Most people aren't eligible. You have to be a worker with group benefits. And, those benefits must include long-term disability. Otherwise, you are only eligible if you purchased an individual policy. This is common with self-employed professionals — doctors, dentists, chiropractors, and vets, for example.
Any medical condition can qualify for long-term disability. Insurance companies focus on the seriousness of your symptoms and how they interfere with work. They don't focus on the diagnosis.
Long-term disability can last for many years. Each plan has maximum years of payment. This is called the benefit period. Typically, the benefit periods run to age 65. But, they can be shorter — sometimes as short as two years. Check your own plan.
Long-term disability is paid in one of two ways. It can be a percentage of your salary — usually from 50% to 85%. Or, it can be a set amount — $2000 a month, for example. Check your own plan.
Some insurance companies will allow you to work and get benefits. However, this is not typical. It would have to be very limited work with little or no pay. Otherwise, insurance companies will stop payments. If you show you can do some work, then they will say you can do more. Some policies allow significant work, but that's rare. Check your own plan.
Yes, your employer can terminate you while you are on long-term disability. Typically, they would owe you termination pay. It's also possible the termination would violate human rights laws. This is a complicated area of law. Always get legal advice.
Typically, you have to pay your medical benefits while on long-term disability. Normally, this comes out of your paycheque. But, the insurance company doesn't take it from your monthly benefits. You have to pay for it yourself. Sometimes the long-term disability policy pays your premiums. But, this is very rare. You should assume you have to pay. Speak to your employer about it.
Most disability plans allow short-term travel. However, none allow for permanent moves out of the country. Your policy has a section dedicated to travel. Read that before taking any trips. And, you should always tell the insurance company before you travel.
For more answers on travel and moving, read our article: Can You Travel on Long-term Disability?
Not always, but it depends on your plan. If you have a private disability policy, then it's not taxable as income. If you are in a group plan, then your benefits may be taxable. It depends if your employer pays all or part of the premiums. If they pay more than 50%, then your benefits are likely taxable as income. Always ask your insurance company. They will know for sure.
Lump-sum payments for future disability benefits are not taxable. However, any money paid for past benefits can be taxable. If the money benefit was taxable, then settlements of past benefits are taxable. Taxation is a complicated area and changes often. Seek legal advice before accepting settlements.
Every plan has a waiting period or an elimination period. Long-term disability benefits start after you have been continuously disabled for a certain length of time. It is usually three to six months. You can get other benefits like short-term disability or EI during the waiting period.
You do not have a right to the IME report. You have a right to medical records from regular doctor visits. IMEs are not regular visits. They are a private consultation for the insurance company. You may have a right to the report during a lawsuit. Consult a lawyer.
Always apply for workers' compensation if you can. Employers will often push you toward short- and long-term disability, but that's not in your best interests.
Long-term disability does not cover pregnancy leaves from work. However, they will cover pregnancy complications. This includes complications before and after birth. Read our article on to earn more: Pregnancy, Maternity Leave, and Disability Benefits: 6 common questions
You have a right to privacy. Therefore, your employer can't ask for details about your medical condition. But, your employer has a right to know about any permanent work restrictions. Otherwise, they can't figure out if they can accommodate you. Your doctor must give enough information so the employer knows what help you need.
Still feeling unsure about your long-term disability claim? Sometimes a quick call with us can help you move forward with confidence. Call us at 1-888-732-0470 or click on the chat icon to start a conversation.
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