Few letters land harder than one telling you your long-term disability benefits have been denied or cut off, especially when you cannot work and were counting on that income to get by. The good news is that a denial is not the end of the road, and you have more options than the insurer’s internal appeal. The hard part is that there are deadlines you cannot afford to miss, and the clock is often already running. This guide explains why long-term disability claims get denied, the two-year deadline that catches claimants off guard, and how to fight back and get your benefits reinstated.
What Long-Term Disability Benefits Are
Long-term disability (LTD) benefits replace a portion of your income, often 60% to 70%, when illness, injury, or a mental health condition keeps you from working. They usually start once your short-term disability or EI sickness benefits run out, and they come either through an employer’s group plan or a policy you bought yourself. One detail that surprises people: if you paid the premiums yourself, your benefits are generally tax-free; if your employer paid them, the benefits are usually taxable.
Why Insurers Deny or Cut Off LTD Claims
Understanding why a claim was denied is the first step to challenging it. The most common reasons are:
- The change in definition at two years. This is the single most common point at which benefits stop. Most policies pay for the first 24 months if you cannot do your own occupation, then switch to a tougher any occupation test, under which you must show you cannot do any job for which you are reasonably suited by your education, training, and experience. Many claimants are cut off at this changeover even though their condition has not improved.
- Thin or diagnosis-only medical evidence. Insurers want to see functional limitations, what you can and cannot do and for how long, not just a diagnosis.
- An insurer’s medical exam (IME) that conflicts with your treating doctors.
- Surveillance or social media taken out of context to suggest you are more capable than you are.
- Policy exclusions or pre-existing-condition clauses.
- Missed deadlines in the policy, such as a proof-of-claim window.
- Offsets, including CPP disability benefits, which most policies require you to apply for and which usually reduce your LTD payment if approved.
The Deadline That Catches Claimants Off Guard
This is the most important thing on this page. In Ontario, you generally have two years from the denial to start a lawsuit against your insurer, under the Limitations Act, 2002. The trap is that many people spend months in the insurer’s internal appeal process while that two-year court deadline keeps running in the background.
Insurers are not neutral decision-makers, and an internal appeal does not stop the limitation clock. Some claimants only realize too late that the appeal they were promised would be “reconsidered” was also quietly using up their time to sue. The exact moment the clock starts can depend on the wording of your denial letter and your policy, and some policies even try to impose their own shorter deadline. Because the timing is fact-specific and the stakes are your entire claim, the safe approach is simple: treat the two-year period as running from your denial, calendar it now, and get legal advice early rather than assuming an appeal protects you.
Internal Appeal or Lawsuit?
When they deny or terminate benefits, insurers usually point you to an internal appeal, often with a deadline of 60 to 180 days to submit more documents. An internal appeal can occasionally work when the problem is a fixable gap, such as a missing report. But the insurer controls that process, appeals are frequently unsuccessful, and their biggest risk is eating up your limitation period.
The external remedy is a lawsuit. It is decided by a court rather than the insurer, and it opens the door to negotiation and mediation, where most LTD disputes actually resolve. In some cases you can start a claim to protect your deadline while you keep submitting medical evidence and pursue a settlement. (If you are unionized, your dispute may have to go through labour arbitration instead, depending on your collective agreement.) The key point is to get advice on which path fits your situation before you commit to an appeal.
What to Do If Your LTD Benefits Are Denied
- Get the denial in writing. If the insurer told you by phone, ask for a written decision. It sets out their reasons and starts the clock on key dates.
- Request your claim file and your policy. You are entitled to the adjuster’s notes, internal medical reviews, and any surveillance, and the exact policy wording matters.
- Build the right medical evidence. Ask your treating providers for function-focused reports: your restrictions and limitations, why they prevent your own occupation (or any occupation after the changeover), and your treatment compliance. A diagnosis alone is rarely enough.
- Keep treating and documenting. Stay under medical care, follow reasonable advice, and, for conditions that come and go, keep a short symptom and activity diary.
- Confirm your limitation period now. Do not assume the insurer’s appeal deadline is your only deadline.
- Get legal advice promptly, ideally before you submit an internal appeal, so your strategy and timing are set from the start.
How We Help Reinstate Benefits and Recover What You Are Owed
Insurers owe their policyholders a duty of good faith in how they handle claims. When that duty is ignored, our team steps in to hold them to it. We review your policy and the denial, advance your claim, deal with the insurer on your behalf, and pursue your unpaid arrears, the reinstatement of your benefits, or a lump-sum settlement. In cases where an insurer has acted in bad faith, the court can also award additional damages.
Our results reflect that approach. In one matter, our lawyers recovered $130,000 for a teacher near retirement age whose claim was first denied and then settled shortly after litigation began. In another, we had a disabled professional’s benefits reinstated and recovered $97,000 in arrears and legal costs, again shortly after starting litigation. Many claims resolve through negotiation or mediation, without the need for a trial.
Frequently Asked Questions
How long do I have to sue after an LTD denial? Generally two years from the denial in Ontario. Do not count on an internal appeal to extend it, and get legal advice early so your deadline is assessed on your specific facts.
Should I file the insurer’s internal appeal? It depends on why you were denied. An appeal can help when the issue is a missing document, but the insurer controls the process and the delay can put your court deadline at risk. Speak to a lawyer before you appeal.
Why were my benefits cut off at exactly two years? That is usually the changeover from the “own occupation” test to the stricter “any occupation” test. Insurers often terminate benefits at this point, and updated, function-based medical evidence is key to challenging it.
Will CPP disability affect my LTD? Most policies require you to apply for CPP disability, and if you are approved, it usually offsets your LTD payment rather than adding to it.
Are my LTD benefits taxable? Generally tax-free if you paid the premiums yourself, and taxable if your employer paid them.
What can I recover? Past unpaid benefits (arrears), reinstatement of ongoing benefits or a lump-sum settlement, and, where the insurer acted in bad faith, additional damages.
Talk to a Long-Term Disability Lawyer
If your benefits have been denied or cut off, the worst thing you can do is wait. Our long-term disability lawyers can review your denial, protect your deadline, and fight to get your benefits reinstated and your arrears paid. Contact us for a consultation and let us help you take the next step.
