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Examining the Fine Print on your Long Term and Critical Illness Insurance Policies


November 22, 2012

As a personal injury lawyer, I get calls all the time from people insisting....swearing....preaching....advocating...yelling at me that they have an AMAZING case that's so clear cut, only a foolish lawyer would turn the case down.

I often get these sort of calls on long term disabilty cases, and critical illness insurance cases. In case you don't know, long term disability insurance (LTD) and crintical illness insurance (CI) are both products which you can purchase on your own from a broker, or are benefits through your employer which are to protect you in the event you can no longer work at your own occupation; or in the event you've sustained a critical illness such as cancer, or a heart attack. In the case of long term disability insurance, you will recieve a monthly premium which can reflect 75% of your net pre-disability earnings (a monthly benefit). In the case of critical illness insurance, you can recieve a lump sum of up to $1,000,000 depending on how your policy is structured. But, let's continue on with the stories of those phone calls from people swearing to me that their case is a SURE BET.

Those calls go something like this:

Caller: Hi. I need to speak with a lawyer.

Lawyer: Yes. How can I help you today?

Caller: Is this call free?

Lawyer: Yes. This call is free.

Caller: Phew! I thought I was on the clock. OK, listen here Mr. Big Shot Lawyer, have I gotta case for you.

Lawyer: Sure. What's your case all about?

Caller: Well, I have (insert disabilty or illness here) and I can't work. I've applied for Long Term Disability (or Critical Illness Insurance) and now Insurance Company X (Great West Life, Manulife, SunLife, Standard Life, SSQ, Desjardins, RBC Insurance, London Life, Canada Life, Industrial Alliance, Maritime Life etc.) have denied my claim. I don't know why because I'm really really hurt and I can't go back to work as a (insert occupation here)

Lawyer: Are you taking any medication?

Caller: Yep. I'm taking a whole cocktail of meds like Percocet, Oxycodone, Oxyneo, Tylenol #3, Amytriptaline, Lyrica, Lorazepam, Endocet, Gabapentin, Venaflaxine and Diazepam.

Lawyer: Did your doctor tell you that you can no longer work?

Caller: Yes he did. I have notes to prove it.

Lawyer: Sounds like you might have a case. Would you like to come in and see me for a free consultation?

Caller: Yes

At the consultation, the medical records and the insurance policy are reviewed. Client can't work on account of back pain and depression. Turns out the client had a long history of back pain and depression which have prevented him from working on and off over a long period of time.

The policy contains a provision which excludes disability arising from what are called "pre-existing conditions". Now, this term is VERY important to any long term disabilty or critical illness case. In many instances, the insurance company will deny claims based on this pre-existing condition rider. It basically states that if you can't work on account of a disabilty which you had before you entered into the contract of insurance, then you won't be entitled to any benefits from the insurance company. It's a pretty nasty rider which can completely change the dynamic of any personal injury case. Fine-print-thumb-3.jpg

There are ways around the pre-existing condition exclusions which the lawyers of Goldfinger Personal Injury Law can assist you with. Give us a call and we will see if there's anything our lawyers can do to help you out. But remember that each and every policy is different. Each and every disability is different as well. So, the approach to each case has to be unique and based on the particular policy of insurance along with the disability claimant's injury.

There are also provisions in long terms disabilty and critical illness policies which require proof of income, proof of work time served, and of course, medical proof showing your disability. So, just because you think you're disabled does not mean that you're automatically entitled to benefits.

One of the absolute WORST long term disabilities I've ever seen had an exclusion for any soft tissue injury, and any mechanical back injury. Basically, if you hurt your back, or sustained a soft tissue injury, even it it resulted in a chronic pain syndrome, that benefits would be denied on account of these exclusionary clauses. In that case, we ended up suing the broker along with the insurer alleging:

1) The broker never explained how the LTD policy worked in the first place to the client (who could NOT read or write English, let alone understand what the policy said in the first place)

2) The LTD policy was an unconscionable policy which NEVER got approved for any claimant (turns out that in the 3 years and over 8,000 policies sold, the insurer had approved under 5 claims!!!!! The policy was eventually taken off the market)

Other policies where the fine print has come back to hurt clients are those where there is a lengthy waiting period. A waiting period is a period of time before the benefits come into effect. So, if you have a waiting period of something like 180 days, that means that even if you're disabled, you have to wait 180 days before benefits get paid. If during that waiting period you manage to return to work, or the circumstances surrounding your disability change (like get better), then you're disability benefits won't get paid out. Yikes!

Enough Long Term Disabilty and Critical Illness Insurance talk. Let's more on to more imporant things like the Toronto Raptors. I'm on the fence whether or not I should be cheering for this team to win, or cheering for this team to continue losing so that they can secure a better draft pick. They're certainly trying hard, which everyone in Toronto loves to see. But, one thing is clear to this lawyer: the talent simply isn't there in order to compete. No talent=no wins. This is the NBA. Heart, hustle and grit only get you so far. Talent is what professional basketball is all about, and the Raptors have a shortage of that. Solution: Trade Calderone & Bargnani at the trade deadline for some talent or some draft picks. And if you get picks, keep it local and draft North American born players. I think the Euroleague experiment has failed.