An Overview of Long-Term Disability Claims in Alberta – 1-800-JUSTICE®

This video explains the importance of long-term disability insurance, which provides financial support if you become unable to work due to a disability. Coverage typically replaces about 66% to 70% of your pre-accident income, but specifics can vary by policy. The first two years of coverage focus on whether you can perform your own job, while after that, the criteria shift to whether you can do any job for which you are reasonably suited. Many claims are denied during this transition, leading to confusion and frustration for claimants. Jeffrey Preszler from Preszler Injury Lawyers emphasizes the importance of legal representation in these cases, as litigation can help ensure that insurance companies uphold their obligations. For assistance with denied claims, you can contact Preszler Injury Lawyers at 1-800-JUSTICE.

I'm often asked what long-term disability insurance is and why it's important. First of all, it is a type of insurance that is either purchased privately or provided through your employer. The purpose of the insurance is to provide you with a certain level of coverage in the event that you become disabled and unable to work. The level of coverage that is available is always defined in the policy and differs for each employer and each person. Generally, we see a replacement wage of approximately 66% or 70% of your pre-accident gross income. However, the policies can apply to net income or gross income, and each policy is different, which is why each carrier provides different types of coverage.

Now, why is long-term disability insurance important? In the event that you ever become disabled, you will have some sort of safety net above what you receive from employment insurance or Canada Pension Plan disability. Most people can recognize that if you are injured or become disabled for any reason, you need some level of income to sustain yourself and your family. This is where long-term disability policies come into play.

When speaking about long-term disability, there are really two different components to a long-term disability insurance plan. The first component provides you with coverage for the first two years following the onset of disability. What does that mean? Generally, there is an elimination period in most policies, and most people know what short-term disability is. Short-term disability is typically provided before the long-term disability benefits kick in. This elimination period is generally similar to the short-term disability timeline, which is usually either 90 days, 120 days, or even up to 180 days. During that period, you do not receive any long-term disability benefits. Long-term disability kicks in after that elimination period or after the short-term disability plan expires.

Short-term disability generally provides you with a higher level of coverage, whether it's 80%, 90%, or even 100% of replacement wage for that period, whether it's again 120 days, 150 days, or 180 days. After the elimination period in short-term disability benefits coverage ends, then long-term disability kicks in. For the first two years of a long-term disability policy, you are entitled to coverage provided you are unable to do your own occupation.

What does that mean? It literally means that if you are unable to do your own job, then you qualify, provided you have a medical reason and that there aren't any pre-existing exclusions or other exclusions set out under your policy. If you're unable to do your own job, you are entitled to your long-term disability benefits. However, we often see the most issues arise once the two-year period, or the 104-week period, ends. As that anniversary approaches, we frequently see insurance companies starting to ask questions about whether or not you will qualify for the next component of the test.

The post-104-week or post-two-year test describes whether you are able to do any job that you are reasonably suited for. This is where we see the bulk of litigation. Insurance companies feel that after two years, you are capable of doing some sort of job for which you are reasonably suited, and this is where most denials come. Even though you may have been a construction worker and that was your pre-disability employment, and you had no issues, if you become disabled and qualify for the first two years, you might think that is great. The reason you qualify is that you are not able to do your own job. However, after the two-year mark, the insurance company may say, "Hold on a second, you are able to do another type of job. You could work as a telemarketer, an operator, a gas station attendant, or a parking lot attendant." As a result, they may terminate your benefits, claiming that there is another job you can do because it is any job for which you are reasonably suited.

This is the standard denial that we see regularly at Preszler Injury Lawyers. Once a claim has been denied, a person really has two options. The first option is to do nothing, which frankly is what a lot of people do. They figure, "Well, my policy only provided coverage for two years, and I don't really understand this other test, so I'm not going to do anything about it." The second option is to file an appeal. There are different types of appeals: an internal appeal and an external appeal. The internal appeal is where you appeal to the insurance company themselves. However, I have never really seen an appeal to an insurance company be accepted, as most people are just submitting the same information that the insurance company already had, which was still insufficient to satisfy them to continue your long-term disability benefits.

The option where we get involved is in what's called an external appeal. This is where we actually commence a lawsuit against the insurance company. At the end of the day, when you've been denied your long-term disability benefits, it is really a denial of coverage or a breach of contract case. When an insurance company is in breach of their agreement, you have only one avenue of recourse, which is to litigate against them to ensure that they uphold their end of the bargain—the part of the bargain that you expected them to satisfy for which you've been paying premiums for years.

Through litigation, we are able to prove that you are unable to perform any job for which you are reasonably suited, which is in direct contravention to what the insurance company is saying. We use a variety of techniques to do so, including expert evidence, vocational evidence, and various other types of litigation strategies that we employ to convince the insurance company that you satisfy the test that enables you to receive coverage.

Now, that coverage lasts technically up to the age of 65, and this is an area that most people overlook. They think that these policies are only for two years, which is generally incorrect. These policies actually last up to the age of 65; it's just that the test changes after two years. Lawyers are key to this equation. Without lawyers, insurance companies are able to deny claims with no consequences. Insurance companies respond to risk, and the only way to create risk for an insurance company is to litigate against them. Litigation levels the playing field and allows you, as the client, to not have to worry about dealing with the insurance company.

There is no doubt that you have had a very unpleasant relationship with the insurance company to date. This is often why people contact us. They feel that they are not listened to, that they are not heard, and that despite providing every bit of information the insurance company has ever asked for, it is still not enough. Their desire for more information is insatiable, and people are generally completely overwhelmed.

What is often overlooked is that people who are in the circumstances in which they are on long-term disability benefits are already not doing well. Their illnesses or symptoms are very profound, making it difficult for them to perform their job or any job, and they are having difficulty functioning on a daily basis. It is these types of people who are inherently vulnerable, and their circumstances make it so difficult for them to take on an insurance company on their own, especially when they are constantly being asked for updates and documents.

This overwhelming process often leads to a denial. As lawyers, we take over and ensure that you do not have to worry about that. You can focus on yourself and getting better while we deal with the insurance company. If you've been met with a denial of your long-term disability benefits, it is crucial to understand your options and seek the assistance of professionals who can advocate for your rights.

A long-term disability denial or even a short-term disability denial can be challenging. Feel free to give me a call. My name is Jeffrey Preszler at the Preszler Injury Lawyers. My law firm can assist you in disputing any denial from a long-term disability carrier, and we can help secure the compensation and benefits that you are duly owed.