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Current trends in Long Term Disability Policies & Litigation (Ontario)

What’s new in the world of Long Term Disability Law in Ontario? Well, I’m glad you’ve asked.

Not to sound like an insurance salesman, but have you even given any thought to what you would do if you found yourself in the terrible position of being so sick, or so injured that you can no longer work?

Canada Pension Plan Disability Benefits only cover so much. ODSP payments are also very limited. Your EI will expire after around 8 weeks or so. Cashing in RRSPs is a tough pill to swallow.

That’s were Short Term and Long Term Disability Insurance comes in. Critical Illness Insurance may also apply.

At our law firm, we see things when the bad stuff hits the fan so to say. When things go wrong recovering STD/LTD benefits, people call us. We see lots of crazy, and not so crazy stuff. The purpose of this Toronto Injury Lawyer Blog post is to give you a better understanding of what Courts are saying with respect to handling these claims, along with the changes we are seeing on behalf of insurers in the industry. Some of the big names which provide LTD and STD insurance are Manulife, Great West Life, SunLife, Industrial Alliance, Desjardins, Canada Life, SSQ and Standard Life.

Trend #1 Caps on Duration of LTD Benefits

Limiting your LTD benefits to a maximum of 5 years! We notice more and more that insurers are limiting their policies until the age of 65, or to 5 years of benefits; whichever period is shorter! That usually spells out just 5 years of benefits much to the chagrin of unsuspecting claimants.

So, if you’re say a 45 year old labourer at a factory, and you’ve been injured and can no longer work for the rest of your life, you might expect your LTD benefits to run for another 20 years, until you reach the age of 65. WRONG!

What we are seeing is that employers/insures are adding amendments/riders to various policies such that the benefits never accrue until the age of 65. Instead, they are cut off after just 5 years, or they are capped BEFORE you hit 65. This isn’t going to provide a 45 year old person with the financial stability of security which they need, or expected under their policy.

Check with your employer/broker to see if such a rider has been added to your policy. There is only so much a lawyer can do for you in this case. Our lawyers cannot change the wording of your policy, so it’s important you know how your policy works.

Trend #2 Use of Social Media Surveillance

Surveillance isn’t new. Its been around since personal injury law existed. Back when Ontario was referred to as “Upper Canada“, Defendant neighbours would spy on Plaintiffs to discredit their damage claims, and then taddle on those people in Court to win their case.

The Ontario Court of Appeal has said that your Facebook, Twitter, MySpace or any other social media account is fair game. Insurers retain social media spies to find out exactly what you’re up to. They will use this information against you in Court to deny/disprove your claim and destroy your credibility in Court. Best practice advice is to destroy your social media footprint all together while you’re litigating against a large insurer. You don’t want your tweets or Facebook Wall Posts to come back to haunt you; and believe me…they will!

Trend #3 All Encompassing Releases

Any time any Plaintiff settles a case out of court against a Defendant insurer, that Defendant insurer will request that the Plaintiff sign a Release. The Release normally says that the Plaintiff will keep the details of the settlement confidential, and will not sue the insurer again over this claim (no double jeopardy). That makes complete sense.

What our Toronto lawyers are seeing more and more is that insurers are trying to sneek in wording on their releases such that the release is not case or policy specific. Rather, it’s an all-encompassing release for the insurer for ANY past, present or future claim which you have, or will mount against them in relation to ANYTHING. That makes no sense. Imagine you have an LTD policy and you settle your LTD with insurer X. You also have Life Insurance, Critical Ilness AND investments with that very same insurer. Why are you being asked to sign a release in relation to your settled LTD claim for ALL of your present products, including any additional products which you might purchase from them down the road. That doesn’t sit right with anyone at our office. Watch out for that sort of thing.

Trend #4 Old School Surveillance keeps on chuggingwbhc.jpg

I always remind my clients about the little white trucks or vans parked outside their homes, or at the end of their streets. Insurance companies will go to any lengths to catching you in the act of doing something which they deem as “bad” or contrary to your policy. They want to catch you taking out the trash, grocery shopping, carrying bags, driving around town for long stretches. Leave it to them to find a way of using all of those videos and photos against you some what. Don’t believe me? Take a read at the case of Fernandes v. Pencorp, where the insurer amassed over 180hrs of surveillance against the Plaintiff. The insurer was found to have acted in bad faith in that case, and ordered to pay over $200,000 to the Plaintiff for their conduct. Here is a good summary of the legal community’s reaction to that case.

Trend #5 Taxable vs. Non-Taxable Benefits

If your benefits are taxable, that means that you have to pay tax on ANY amount recovered. That sucks unless you’re a person that likes to pay taxes.

If your benefits are NOT taxable, that means that they’re yours; free and clear. That makes most people happy.

Check your policy and find out whether or not your benefits are taxable or not. It’s really disappointing to many claimants to find out that they have to pay the Government a good portion of their long term disability recovery.

Enough law talk. Let’s get to more important matters. Team Israel is competing in the World Ball Hockey Championships this week in Newfoundland. Goldfinger Personal Injury Law is a big supporter of Team Israel who are making their 1st ever appearance at the championship. And guess what?! Today, Team Israel recorded their first ever victory, beating Team Great Britain 4-2. Well done! You’re making us all very proud!

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