Long Term Disability benefits flow for many disabled claimants with no issue.
The insurer may from time to time request a report from a family doctor, questionnaire, or request updated clinical notes and records. The insurer may also request that the claimant see their own “doctor” or “specialist” in order to assess their disability.
This is completely normal.
Unfortunately, when this happens, it opens the door for the insurer to interpret the medical data which they have received in such a way to justify a termination of long term disability benefits.
It can be really frustrating, depressing and hard when long term disability benefits get terminated. Like the electric company turning the power off; or like the water company shutting off the water making it difficult; if not impossible to live or to make ends meet.
If only there was a way to get those long term disability benefits reinstated. If only there was a way to get back on claim.
This instalment of the Toronto Injury Lawyer Blog will discuss a reinstatement of long term disability benefits and what factors need to be considered when a reinstatement option is offered.
For starters, the reinstatement option is NOT offered to all claimants by long term disability insurers.
Certainly, if your case goes to trial, all a Judge can order is payment of arrears; and order that long term disability benefits get reinstated. There is also nothing stopping your insurer from reinstating benefits after trial, and the suspending those benefits shortly after in the event you are in breach of your policy or for some other medical or non medical reason. They may have some damaging surveillance of you taken shortly after the trial, or have lined up a medical appointment for you with another one of their special doctors.
But before you hopes up about having a long term disability trial, it’s important to consider the following:
- 99% of long term disability cases settle outside of Court without going to trial
- trials are expensive, lengthy and unpredictable (you may win, or you may loose. Who’s to say; so there is an inherent element of risk involved whereas the outcome of an out of Court settlement provides 100% certainty as to the outcome)
- there were already delays having your day in Court. COVID is certainly not helping personal injury cases such as long term disability claims being heard any faster. To the contrary, COVID is slowing down an already slow trial process for long term disability and other personal injury claims. So if you are thinking that your day in Court will take place now now now; you are wrong wrong wrong. Think years and years down the road (3-5 years or so if you’re lucky).
When the reinstatement option is offered to you; it’s important to consider the following:
- Is this the best option for me and my family? Only you can make that decision. For some people it is. But for others it isn’t. It all depends on your lifestyle, risk tolerance and level of comfort dealing with your insurance company. For many, dealing with an insurance company is anxiety inducing. Simply getting an envelope in the mail from the insurer (even if it’s a Christmas Card is enough to make one nervous in the stomach).
- Do you want to remain in a marriage with the long term disability insurance company for years to come; or are you seeking a clean divorce? Do you trust the insurance company to treat your right? Having your long term disability benefits reinstated means that you will need to be responsive to the insurance company’s demands. If they want records; you need to provide them with records. If they want you to go for medical testing; you must attend their medical testing. If they want you to complete a questionnaire; you need to complete a questionnaire. Failure to comply with the insurer’s demands will translate in to a breach of the policy such that your benefits will be terminated. So much for that reinstatement of benefits.
- Are you able to work; and have work lined up which you’re able to do? If you are able to work; then that defeats the purpose or a reinstatement. Reinstatements are for disabled persons who cannot work.
- How will a reinstatement impact your pension contributions? How would a lump sum payout impact your pension contributions?
- How will a reinstatement impact your ability to take an early retirement and draw on your pension?
- How will a reinstatement impact the other benefits available to you (health, dental, life, etc.)?
- Are your long term disability benefit taxable or not? If your monthly long term disability benefits are taxable, but a lump sum payout of future benefits is not; then needs to be taken in to consideration when assessing your net award.
- Is there a Cost of Living Allowance (COLA) clause written in to your policy such that your monthly benefit increases each year as the cost of living increases?
If you are aI Unionized employee, it’s best to have a chat with your Union Rep about how a reinstatement will impact your other benefits and pension. Every policy and collective bargaining agreement is different so there is no clear cut answer one way or another.
What we can tell you is this:
In the event that you and your insurer are able to get along nicely; and you are responsive to their demands; and their demands aren’t draconian; and they don’t play any dirty tricks or games; and you can stomach being in a relationship with them for what could be a long time; then a reinstatement is a great option. It will ensure for some degree of financial security while you remain disabled under the duration of your policy.
Unfortunately, the reinstatement option is NOT available in every case. An insurer does not have to offer reinstatement by way of settlement. More often than not, insurers are more interested in a lump sum settlement so that they can close your file, and move on to the next. It’s expensive and time consuming for insurers to have people on claim. It’s far more economical and efficient for insurers to cut a lump sum cheque so that both parties can go their own separate ways.