What Happens to a Long Term Disability Claim After 2 Years?
People who have long term disability benefits enjoy a sense of security. They feel secure knowing they will not be left without income if they are unable to work due to an illness or disability.
The terms of each policy for long term disability benefits are different. However, most contain some similar terms and clauses. Almost all policies have a clear definition of what it means to be “disabled” under the policy. The definition of “disabled” is policy dependent.
In addition, most policies have two definitions of “disabled”. During the initial period (generally two years), a person will meet the definition of being unable to work if they are largely unable to do their own occupation.
After two years of collecting benefits, a more stringent test usually applies. In that instance, a person will meet the definition of ”disabled” if they are unable to perform any occupation.
What does unable to perform “any occupation” really mean?
At the two-year mark, when the definition of being unable to work changes, the insurance company will usually conduct an in-depth assessment of whether the person meets the new definition.
The insurer can not deny a person’s claim for benefits after the two-year mark just because the person is able to perform all of the individual the tasks for any job. Being able to work requires more than simply performing the tasks of an occupation. The insurer should only deny a person benefits after the two-year mark if they are satisfied the person claiming benefits can sustain regular employment in a competitive environment. The insurer must look at the big picture. The definition of being unable to work in any occupation must be interpreted liberally.
The Supreme Court of Canada’s decision in Paul Revere Life Insurance Co. v. Sucharov¹ is the leading case on how the definition of unable to work is interpreted in long term disability policies. In Sucharov, the Court found that Mr. Sucharov was not able to deal with stress, and so, even though he could complete many of the individual tasks involved with being a manager, he was ineffective in his occupation, and therefore totally disabled.
In Sucharov, the Supreme Court of Canada quoted with approval Couch on Insurance (1983) s. 53:118:
The test of total disability is satisfied when the circumstances are such that a reasonable man would recognize that he should not engage in certain activity even though he literally is not physically unable to do so. In other words, total disability does not mean absolute physical inability to transact any kind of business pertaining to one’s occupation, but rather that there is a total disability if the insured’s injuries are such that common care and prudence requires him to desist from his business or occupation in order to effectuate a cure; hence, if the condition of the insured is such that in order to effect a cure or prolongation of life, common care and prudence will require that he cease work, he is totally disabled within the meaning of health or accident insurance policies.”
More recently, the Ontario Superior Court of Justice in Kardaras v. Sun Life Assurance Company of Canada,² set out the following definition for when someone will be found unable to perform any job:
… Being disabled from “any occupation” means that the insured person cannot perform work reasonably commensurate in status and reward with their background, job experience, training and general education level: Thevenot v. Manufacturers Life Insurance Co., [2006] M.J. No. 91, 2006 MBQB 58, at para. 24. The test for coverage under an “any occupation” provision is set out in Eric J. Schjerning, Disability Insurance Law in Canada, 2nd ed. (Toronto: Carswell, 2017), at p. 57, as follows:
A policy with the “any occupation” definition of disability usually requires that total disability is such that the insured person is prevented from engaging in any occupation or from performing any work for compensation or profit. An insured will be deemed totally disabled if he can take on only trivial or inconsequential work, or work for which he is highly over-qualified, or work for which he is completely unsuited by background.
A person is considered not to be totally disabled from engaging in “any” occupation if his condition would enable him to enter into an occupation reasonably comparable to his old occupation in status and reward, and reasonably suitable in work activity in light of his education, training and experience.
Applying the law to a hypothetical situation illustrates when someone may be found unable to perform any job. For example, if returning to work will leave the person claiming benefits with no energy or tolerance for activities after work, such as household responsibilities and light leisure, then the person should be considered unable to perform any job in keeping with the Supreme Court of Canada’s decision in Sucharov.
Similarly, if the person claiming benefits could only succeed at work under the employment of a forgiving employer, such that the employer is wiling to overlook serious performance or attendance issues, then the person should be considered unable to perform any job in keeping with the Ontario Superior Court of Justice’s decision in Kardaras.
What can I do now? // Next Steps
Insurers assessing a claim for long term disability benefits have a duty to assess a claim fairly. However, the person claiming benefits has the responsibility to prove their entitlement to benefits. The person claiming benefits can prove their entitlement to benefits by providing their insurer with medical information about their illness and/or disability, and why they are unable to work. Insurers often give reports from medical specialists significant weight when assessing a person’s entitlement for benefits.
If you are applying for long term disability benefits, or if your claim is coming up to the two-year mark, it is important for your claim that you continue to consult with your family doctor, attend appointments with specialists to whom your family doctor refers you, and follow treatment recommendations.
It is also important that you review your own policy carefully and understand the definition of “unable to work” or “disabled” that applies to you and when that definition will change. Your long term disability benefits insurer or employer may be able to provide you with a copy of your policy and identify the definitions that apply to you.
If your insurer has denied your claim, you have a limited amount of time to start a lawsuit or appeal their decision. Do not hesitate to call Oatley Vigmond to find out what you need to do to protect your rights.
¹At page 546, [1983] 2 S.C.R. 541; https://canlii.ca/t/1xv84.
²At para 61, 2020 ONSC 3925 (CanLII), https://canlii.ca/t/j9g0l.
About the Authors
Rayanna is devoted to advocating for clients so they can focus on rebuilding their lives. She has seen firsthand the profound impact an injury can have on a victim and their families and believes that navigating a complex legal system should be the least of their worries. Effective communication, compassion and commitment is the cornerstone of Rayanna’s practice.