Disability insurance is a type of insurance that courts have described as providing “peace of mind” to insured consumers. Peace of mind policies are intended to reduce stress and anxiety about what can potentially happen in the future.
Disability policies can generally take on two forms: individual policies issued directly to a policy holder, or group policies which are typically issued by an insurance company to an employer for the benefit of employees.
Disability policies can provide short-term or long-term disability coverage. Short-term disability policies usually provide coverage for up to six months before long-term disability coverage takes effect. In the absence of a short-term disability policy, a disabled claimant may be eligible to receive Employment Insurance Sickness Benefits which provides coverage for a maximum of fifteen weeks.
Although individual policies differ, typically long-term disability policies have a graduated definition of the term “disability,” with the “own occupation test” applicable while the disabled individual is unable to perform the main duties of his or her regular job.
At the two-year juncture, the typical policy contains a graduated definition of disability which provides for monthly benefits in the event that the disabled person is unable to perform the duties of any job for which he or she is reasonably suited. This graduated definition is coined the “any occupation” test, and is usually applicable to the age of 65, which would be the maximum termination date of benefits.
Most litigation revolves around the satisfaction of the “any occupation” definition of disability. Insurers often strictly interpret the “any occupation” test, and seemingly give less weight to “subjectively based” types of illnesses or injuries, or propose employment alternatives that are inappropriate given the circumstances of the disabled person. These particular types of illnesses or injuries can vary from psychological illness, e.g. anxiety and/or depression, chronic pain, or fibromyalgia.
If the insurer denies your claim or terminates benefits, most policies provide for an internal appeal mechanism, and if this fails, litigation through the courts system is the usual course of action.
In negotiations for a denied disability claim, the basis for compensation would include past and future monthly benefits owed under the policy, legal fees, and potentially aggravated damages for mental distress, or punitive damages against an insurer who has engaged in unfair and sharp practices.
If your disability claim has been denied, feel free to contact us for a confidential assessment of your case, at no charge.