LTD and Pre-Existing Exclusions

In a past blog, we discussed how some LTD claims are denied based on the pre-existing exclusion clause. We are revisiting the subject because the trend in Canadian society is towards greater movement of the labour force from one job to another, and so it is important to understand the implications of whether such a clause may impact your potential entitlement to disability benefits at some point. If the exclusion clause applies, you will not be entitled to receive any disability benefits.Pre-existing Conditions & LTD This blog will focus on answering some frequently asked questions that we encounter.

1. What counts as a Pre-Existing Condition?

This depends on the specific wording of the pre-existing clause in your particular disability insurance policy. In group policies (provided usually by an employer), the following type of clause may appear: “We do not pay benefits if your disability results directly or indirectly from a condition which existed on or before the date your coverage began. However, this limitation will not apply to you if: you have been covered for Long-Term Disability with your employer for at least 13 weeks during which you have been actively working continuously (up to 3 days of absence does not count) and you have not been treated by a doctor, or any medical personnel under the direction of a doctor, for the condition, or you became totally disabled more than 12 months after your coverage began.”[i] This wording is fairly typical of Pre-Existing clauses in many insurance company’s policies. It contains a rather broad definition of what constitutes a pre-existing condition. In this example, it includes disabilities that result directly or indirectly from a condition which existed before coverage begins. This means that undiagnosed conditions may still be caught by this clause if they can be seen as being either directly or indirectly related to symptoms that were occurring in the applicable period. Particular attention must be focused on the time-frames noted in the clause. In this case, 13 weeks of actively working continuously will knock out the clause, even if you had a pre-existing condition. When an insurance company is reviewing this aspect of your claim they will scrutinize your attendance record and medical treatments carefully to see if coverage and benefit payment can be avoided.

2. Why would a pre-existing condition matter in the case?

A pre-existing condition will only matter if the claim arises within the period during the pre-existing exclusion clause applies, so, in most cases, if the disability arises more than one year from when coverage was put into place, the pre-existing exclusion will not apply. There are some policies where the pre-existing exclusion applies for a longer period of time – for instance, two years – but that is more the exception than the rule. The policy wording must be checked to determine the specific clause in each case.

3. Why would the insurance company say that a pre-existing condition makes a difference in paying out the claim?

As noted in the answer to the 2nd question, the insurance company can only raise the pre-existing exclusion clause in applicable circumstances.

4. If I am moving from one employer to another, is there any way to avoid the pre-existing exclusion clause?

As noted in the introduction to this blog, changing your place of employment usually means that you will be subject to whatever pre-existing exclusion clause applies to the group benefits at the new employer. If you have been struggling with her your health and are dealing with a chronic illness, even though able to work, you should take into consideration the potential impact of changing employers should a disability occur within the initial period (described earlier). In some cases, you might be able to get your employer to request that the pre-existing exclusion be waived, however, that would require a prospective employee to advise his new employer that he or she is struggling with a chronic illness, which could pose a barrier in the hiring process, so it may not be realistic to broach this subject with a prospective employer. Bottom line is that while one cannot necessarily anticipate and plan for every single contingency, at least be aware of this issue if and when you consider making a career move. At Share Lawyers, we review cases that have been denied based on a pre-existing exclusion and in some cases, it is possible avoid the applicability of the exclusion clause, but this is an added challenge to a disability case, which can be insurmountable in some cases. If you’re unsure about how this may apply to you, it should be reviewed by an experienced disability lawyer who can assess the chances of success. Has your long-term disability claim been denied? Contact Share Lawyers and put our experience to work for you. We offer free consultations and there are no fees unless we win your case.Find out if you have a disability case.We have recently settled cases against Industrial Alliance, Manulife, Sun Life, Co-operators, RBC Insurance and many more. We love hearing feedback from our clients, so please share your own experience with us. [i]Excerpted from a Sun Life Group Benefit Booklet

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