When Your LTD Benefits Stop at 24 Months: Your Rights and Next Steps

Over the past couple of years, you’ve struggled to accept the new life realities imposed by your now limited physical and mental abilities. The letter you recently received implies that your struggles are only beginning; the LTD benefits on which you’ve relied are scheduled to end two months from now. The language in the letter is hard to understand — something about a “24-month change of definition”.

Looking back, while enduring the unrelenting medical exams, interviews, and therapy sessions, you’d held on to the hope that the doctors and therapists would be able to “put you back together”. Now, after having gradually come to grips with the fact that that once very active lifestyle is a thing of the past. The financial “rug” is about to be yanked away…

Admittedly, the letter offers you the opportunity to appeal the insurance company’s decision, but working through that long “checklist” in such a short period of time seems impossible. How could you possibly afford to support yourself without the benefits? How could you possibly afford the services of a lawyer?  How could there possibly be enough time to make arrangements and undergo all those suggested “employability” tests? 

Start With a LTD Insurance Reality Check

Hard truth #1 – the definition.

At about 24 months, most Ontario LTD policies change from “own occupation” to “any occupation.” Insurers often use this review to terminate benefits. You have the right to understand why, to see the evidence they rely on, and to decide whether to appeal internally or start a legal claim.

EVERY Ontario, Canada LTD policy contains a definition of disability, listing in detail what conditions must exist for the insured to collect the benefit. In most policies, that definition changes after the insured has been collecting benefits for two years.

OWN OCCUPATION

You are unable to perform the duties of your own occupation. This definition applies for the first two years, starting from the month benefits begin.

ANY OCCUPATION

Starting from the 24-month mark, you are entitled to receive benefits only if it is proven that you are unable to work at any occupation for which you qualify based on your level of education, training, and work experience.

Insurers know this is a major hurdle. Many plan their review around this 24-month change of definition and use it as a common point to terminate benefits.

Hard truth #2 – the letter

By sending you the change of definition notification letter in advance, the company is complying with the requirement to give you some time to prepare a response and to gather updated medical evidence.

Hard truth #3 – the insurance company.

Understand one thing: it is generally not in the best interest of any insurance company to help you. While they must honor the policy contract they’ve issued to pay legitimate disability claims, the company is in business, and minimizing disability insurance payouts helps increase their bottom line.

How Can You “Re-prove” your disability? Is there sufficient time to time to get that done?  

What to do within the first 48 hours:

1. Study the letter:

A. What reasons are listed for discontinuing your benefits?

Reasons often cited by Ontario LTD insurance companies for discontinuing benefits at the 24-month mark include:

• Insufficient medical proof – there hasn’t been enough objective evidence that you are unable to perform  “any occupation” duties
• Refusal of treatment – you have not followed a recommended treatment of rehabilitation plan
• Surveillance findings – your level of activity contradicts your claim of disability.

B. What new tests and evaluations are they recommending?

• FCL (Functional Capacity Limitations) – tests the impact your condition has on your ability to work
• FCE (Functional Capacity Evaluation) – tests your ability to perform repetitive physical actions
• IME (Independent Medical Examination) – doctors chosen by the insurance company decide of the treatment prescribed by your own doctors was suitable
• TSA (Transferable Skills Analysis) – judges whether your training and experience qualify you for any gainful employment
• Competitive Employability Assessment – judges whether employer will want to hire you in your now diminished capacity

Is the insurance company saying you are expected to cover all or part of the costs for these evaluations? (Remember Hard Truth #3 – The insurance company is not on your side.  The vocational experts, medical doctors, therapists hired to re-evaluate your situation are far more likely to side with them than with you…

C. What is the letter saying about your right to file an internal appeal? What deadline is set for that appeal?

2. Gather and organize your file of documents

• Your insurance policy
• Prior approvals of benefits
• All medical records and appointments
• Description of the latest job you had and the job duties involved

3. Meet with an Ontario Long-Term Disability Lawyer

 With the help of an experienced disability lawyer, you will be in a position to confront the LTD insurance company’s change-of-definition termination by taking legal action in one of two ways:

A. File an internal appeal (after compiling new evidence of disability and submitting to the functional capacity tests and reviews). Why choose this option?

1. An appeal may be required in the policy contract.
2. An appeal is a simpler, less costly and less stressful process for resolving a dispute.
3. An appeal is unlikely to succeed without new evidence.
4. The deadline severely limits the time you have to gather that new evidence.

B. File a lawsuit (an external appeal) in court. Why choose this option?

1. Litigation can lead to a lump-sum settlement.
2. Your claim will be reviewed by a new party rather than the adjuster who denied it.
3. Filing a lawsuit helps avoid expiring deadlines for filing an internal appeal

Read more in Should You File a Legal Claim or Internal Appeal for Long-Term Disability in Ontario?