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You need long-term disability insurance. Now what?

March 30, 2021 Renee Sylvestre-Williams
A woman after cancer treatment going for a walk on a beautiful fall day

Can you be fired or terminated while on long-term disability?

Yes, but it’s a much more complicated process than a simple firing. The guidelines vary based on province or territory. In Ontario, for example, an employer can terminate an employee on long-term leave if the employee is “unlikely” to return to work. The rationale is that there is an employment contract between the two parties, and it’s not being fulfilled because the employee can’t work. 

Now, here’s the complicated part. According to Diamond and Diamond Lawyers, before an employee can be terminated, an extensive, factual investigation and an expert medical opinion are needed. If the employer doesn’t get the evidence required, they may be obligated to continue paying benefits plus legal costs. (I reached out to several lawyers for this story. While none of them wanted to be on record, they all said it’s a good idea to have a lawyer if your claim is denied.)

Can my benefits be stopped without notice?

If you’re wondering if you could be forced to return to work while on long-term disability leave with benefits, it’s best to be prepared. It’s possible to be pressured to go back to work by the insurer, who may threaten to stop payments. But as long as you remain ill or disabled under the policy criteria, the insurer must continue paying the benefits

Can I be forced to retire while on long-term disability?

There have been instances where employees on disability have been forced into retirement, and many employers do have a policy of medical retirement after two years. It all comes down to your employer’s policy. If this happens to you, it’s best to consult a lawyer to ensure your rights are met.

If you’re receiving LTD insurance benefits, Preszler Injury Lawyers in British Columbia says your insurer can legally deduct CPP disability benefits from your payments. Review your policy to see if this is applicable to you. 

What happens to my disability payments if my employer goes bankrupt?

You should continue to receive the LTD insurance payments even if the company goes bust. That’s because when your claim is accepted, it’s the insurance company that’s covering the monthly payments, not your employer. In Canada, says Loewen, insurers have a regulatory regime that requires them to have monetary reserves for situations like LTD benefits. This reserve is supposed to be set apart from other funds. 

Can insurance companies follow and investigate me? 

Yes. It starts when the insurance company suspects fraud. And it is legal for them to survey from a public place. But that’s not to say you can’t do anything about it. If you think you’re being watched, request your file from your insurer, as any surveillance should be recorded there. If your claim is questioned, you might want to get legal advice. 

Claiming LTD insurance benefits can be a complicated process due to the length of time involved, the requirement of medical proof and the amount of money that’s paid out in benefits. If this is an option you’re considering, make sure you’re prepared with all the necessary paperwork.

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