Whether your claim is with Manulife, Cooperators, Sun Life or any other insurer, speaking to Tamming Law is a smart decision. We want to meet with you, talk with you and help you decide on the best course of action to achieve peace of mind while you’re making a long-term disability (LTD) claim. We’re proud to serve clients in Bruce, Grey and Simcoe counties.
The 2-Year Fight
Many disability disputes arise 2 years following the date your disability first arose. Why is that? Under most policies, for the first 2 years (sometimes it is 30 months), you get benefits if you are unable to perform your own occupation.
But under many policies, after 2 years the test changes to whether you can perform any occupation for which you are suited. Now, the insurer must be reasonable: you are not required to collect road kill, generally the proposed job must pay 60% of your previous income and it does not count if all you can do is work sporadically (and thus unreliably) around your pain.
Remember the Deductions
Most group plans (as opposed to privately purchased plans) require you to apply for Canada Pension Plan (CPP) disability benefits. These benefits are deducted dollar-for-dollar from any LTD benefit payable to you.
Why bother then to apply for CPP? First, you are obliged to apply under most LTD policies. Second, if you qualify for CPP as “unemployable,” the LTD insurer will be hard pressed to argue that you do not meet the “unemployable” test for LTD benefits. Third, if you are on CPP disability, this will enhance the CPP pension you would receive at age 60 or 65.
What about Taxes?
LTD benefits are generally taxable where the employer has been the one paying the LTD benefit premiums. If we settle your claim on a lump sum basis, you will have taxes deducted from any retroactive amount but generally no taxes will be payable on that part of the lump sum representing future LTD benefits.
Should I Take the Case to Trial or Try to Settle?
If the matter does proceed to trial and we are successful, the court can only order a continuation of the monthly cheque. Apart from some other types of compensation, that is all it can order. The court cannot order a lump sum payment. Further, following trial, the insurer may challenge you again after a period of time and argue that your condition has improved. In other words, your file will remain open. For that reason, you ought to consider a settlement if fair compensation is offered.
If the matter settles prior to trial, it will usually result in a negotiated “lump sum” payment. That is, the insurer will want to close its file for all time and will want to pay you a final amount of money. The amount will depend on the strength of the medical information and the period of time for which the insurer believes it is exposed to ongoing payments.
We will, in most cases, retain the services of an accountant to tell us the present value of all future payments that the insurer will have to make if we succeed at trial. The insurer will not agree to pay this amount and will argue that the amount should be reduced or discounted to reflect the fact that we may not succeed at trial and to reflect the advantages to you of a lump sum payment. This is where the negotiations play a critical role, and we will of course discuss this with you as the file progresses.
What Evidence Is Needed to Prove My Claim?
In proving your claim, we rely on your past medical records, your family physician and medical experts arranged by our office. In addition, we rely on certain persons such as past employers, special friends and relatives who might be able to provide statements that are supportive. We also rely of course on your personal story of pain and attempted recovery; however, the more objective the evidence, the better.
May I Sue the Insurer for the Way It Treated Me?
In certain cases, clients tell us horror stories about how their claim was treated by their insurance company. In these cases, we will usually sue for compensation for something known as their “bad faith” treatment of you. The fact that they have denied you benefits after 2 years is not enough; there must be something more in the manner in which your claim was held that may expose the insurance company to a claim for bad faith compensation.
Again, we will discuss this with you on a case by case basis. Contact Tamming Law today to schedule an appointment with our talented team.