Long-term disability insurance part 2: denials
By AdvocateDaily.com Staff
In part two of a four-part series on long-term disability insurance, Toronto personal injury and disability lawyer Nainesh Kotak explores how to handle denial of claims by insurance companies.
Kotak, principal of Kotak Personal Injury Law, says there are two key types of insurance denials when it comes to LTD benefits.
Some may find themselves turned down from the beginning if the insurer believes they don’t meet the eligibility requirements for compensation, he says. Others may need to take action when their insurer terminates payments after a period of time, commonly at the two-year point when the test for continued coverage changes.
Either way, Kotak says insureds must move quickly since they usually only have two years from the date of denial in Ontario to launch a lawsuit challenging the decision.
He says applicants should reach out to a lawyer for help as soon as they are denied because it’s possible to become distracted by the internal appeal process that insurers operate to review their own decisions.
“You’re effectively asking someone within the company to overturn a decision by a person they work with,” Kotak says. “In our experience, they inevitably won’t reverse their own decisions.
“We like to get a copy of the policy, put together a statement of claim, and start a lawsuit quickly. The faster you get started, the faster it gets resolved,” he adds.
In the meantime, Kotak helps applicants apply for CPP disability payments.
“The other reason to do this is that insurers will seek to deduct amounts that the insured would be entitled to in CPP benefits, whether or not they applied for them,” he adds.
According to Kotak, insurers will often use the “catch-all phrase: 'insufficient medical evidence,'” as justification for
a denial or termination of coverage.
Another common reason for refusal is that the applicant’s medical issue is determined to be a pre-existing condition and subject to policy exclusions.
“Increasingly, we see insurers examining applicants’ social media posts, where pictures appear to show them engaging in activities that they claimed were impossible,” Kotak says. “That can result in a credibility issue which could result in a denial.”
Whatever the insurer’s objection, Kotak says a lawyer can help individuals gather new medical evidence to convince the insurer — or a court — of their client’s continuing entitlement under the policy.
Click here to read part one where Kotak explains some of the lesser-known facts about applying and qualifying for benefits.
Stay tuned for part three, where he will discuss the unique challenges for LTD applicants with mental health conditions.