5 Reasons Why LTD Insurers Cut Off Benefits

You’ve successfully applied for long-term disability and have started receiving benefits. The hard part is over, right? Maybe not. Remember: insurers look for any reason to pay as little as possible; they have a vested interest in making sure you are still entitled to those benefits long after the initial approval.

In today’s post we will look at some of the common reasons that LTD insurers discontinue benefits after an initial approval.

1. Change of definition

LTD policies use an “occupational test” to determine how much your ability to work has been affected. In our last post, we talked about how after two years of benefits, many policies change from “own occupation” to “any occupation” coverage. If your policy includes that change of definition, and the insurer thinks you should be able to return to some sort of work after two years, your benefits may be cut off.

2. “Non-compliance” with the policy

When you’re receiving LTD benefits, you must comply with the various provisions in the policy. This could include following the insurer’s  recommendations for medical care and treatment. They can require you to undergo specific treatments or programs for your injury or illness. If you refuse, they have the right to terminate your benefits for non-compliance.

3. Reaching retirement age of 65

This one is straightforward and can’t be disputed. LTD is meant to replace your employment income. Most LTD policies only pay benefits to the age of 65, because at that age it’s assumed you will retire and be eligible for CPP and other retirement benefits.

4. Recovering or no longer meeting the policy definition of disability

If the insurer believes that you have recovered or are no longer disabled from doing the work established in your policy’s occupational test, they can terminate your benefits. This could be based on medical evidence from your doctor or an IME, or they may have surveillance that undermines your claim.

5. Not providing medical evidence as requested

LTD insurers require ongoing reporting about your health, and will check in with your doctor on a regular basis to make sure you still meet the definition of disability. It’s very important that you continue to attend your medical appointments so that your doctor has current information. If you do not, your benefits could be cut off.

Once you are receiving LTD benefits, it’s very important that you understand your policy and comply with it–but know that the insurer will look for any reason to stop paying benefits. If you’ve received a letter saying that your benefits are being terminated for a reason other than age, we strongly encourage you to speak to an experienced LTD lawyer right away.