Long-term disability (LTD) insurance is designed to provide financial support when illness or injury prevents you from working for an extended period. LTD benefits will cover a portion of your income in while you cannot work. These benefits are not indefinite. Understanding when and why LTD ends is crucial for planning your financial future, protecting your rights, and preparing for life after your disability benefits terminate.

This blog post explores the circumstances under which LTD benefits end, the role of insurance policies, age limits, medical recovery, and what options exist once coverage stops.

Understanding Disability Benefits

Short term disability insurance is payable for a relatively brief period when you are prevented from working by an illness or an injury. By contrast, if you are likely to be absent from work for a lengthy period (generally more than six months), you should apply for long term disability benefits.

Long term disability benefits are usually offered to employees as part of a group benefits package and are payable by an insurance company. In some cases, your employer may pay the benefits as part of a salary continuance plan with the insurance provider reviewing the medical records and LTD claim forms. The insurer will recommend a decision and the employer will pay you a reduced salary as income replacement if your claim is approved.

• Purpose: LTD benefits replace a percentage of your income (often 50–70%) if you cannot work due to illness or injury.
• Duration: Unlike short-term disability, which usually lasts a few months, LTD can continue for years depending on your condition and the policy’s terms.
• Eligibility: You must meet your insurer’s definition of disability, which often changes after the first two years from an inability to perform the essential duties of your “own occupation” (your specific job) to “any occupation” (any job within the range of your education, training and experience).

How Long Does Long Term Disability Last in Ontario?

Long term disability benefits typically end when you recover enough to return to work, when the maximum benefit period is reached (often at age 65), or if your insurer decides that you no longer meet the definition of disability. The exact timing depends on the policy terms and your medical condition. Legal disputes arise when an insured person disagrees with the insurance company’s decision that they are no longer disabled.

Reasons Your Long Term Disability May End

1. Return to Work

If you recover and are able to your current occupation on a full time basis, you will no longer be entitled to benefits. However, when you return on a part-time basis to your own job and are earning well below your pre-disability income, you may have a legal claim because you should still be considered totally disabled. This is a good time to consult as disability lawyer as there are important considerations which depend on the actual wording of your LTD policy.

2. Recovery or an Improvement in Your Health

Insurers require medical updates on a routine basis as they have a right to continue to adjudicate long term disability claims. If a treating physician reports that there has been significant improvement or recovery from the disability or illness, the insurer may decide to terminate benefits.

In addition to requesting statements of continuing disability, LTD claims adjudicators will sometimes arrange independent medical examinations (IME). Most plans clearly require attendance at an IME. If the examination finds that your condition has improved, LTD benefits will end.

3. Reaching Maximum Benefit Period

All disability insurance provisions have a maximum benefit period. Common benefit periods include:

• Age 65: Benefits end when you reach retirement age.

• Fixed Term: Some policies specify a maximum number of years that LTD payments will be paid (e.g. 2 or 5 years).

4. Failure to Meet Policy Requirements

The long term disability policy imposes certain obligations on disability claimants. Failure to comply with the policy’s terms may result in benefits ceasing, including:

• Leaving the country for an extended period of time without advising the insurer: Not all long term disability policies have a provision about leaving the country so it is important to examine the insurance plan’s terms to determine your obligations.
• Refusing to attend an IME: Refusing to attend an IME will likely result in insurer refusing to pay benefits.
• Failing to report income: In order to continue to receive benefits, you will be required to complete updates about your personal circumstances including any income you receive from employment – even casual work. LTD benefits are intended for income replacement and insurers take nondisclosure very seriously.
• Refusing to apply for Canada Pension Plan (CPP-D) Disability benefits: Most group LTD policies require you to apply for CPP-D or other benefits such as workers’ compensation benefits. If you refuse to apply for CPP-D or other benefits, it is likely that your LTD benefits will be suspended until you do so.
• Refusing to participate in rehabilitation: Insurance policies have rehabilitation provisions which mean that insurance providers are entitled to require insureds to attend treatment such as physiotherapy or psychotherapy, work hardening and retraining.

5. Retirement

Many long term disability insurance provisions provide that benefits cease if you retire. Since most LTD payments do not have indexation to account for inflation (COLA provisions), many LTD claimants will find it difficult to make ends meet when they received the same amount each month for several years. It can be tempting to retire and access your pension. It is important to understand that some LTD policies will state that retirement will result in benefits terminating.

Legal and Financial Considerations

If you have a denied claim or your LTD benefits terminate without cause, you have options to pursue your disability benefits.

What you need to know:

• Appeals: You can submit an internal appeal of an insurer’s decision on your own or with a disability lawyer’s help.
• Litigation: You have two years from the date of the insurance company’s decision to bring a legal claim in court. It is important to contact a lawyer soon after you receive the decision to preserve your rights.
• Your Union: Some unions such as the Ontario Nurses Association (ONA) have negotiated collective agreements for their employees which require the disability decision to proceed through the grievance and arbitration procedure. There are strict deadlines in this procedure as well and it’s important to speak with your union soon after the denial.
• Grievance or litigation? If you don’t know which jurisdiction is appropriate for your dispute, it’s best to contact an experienced disability lawyer for advice.

For advice please text 613-777-0992 or contact us through our website to schedule a meeting with one of our lawyers.  We provide a free consultation, in French or English, to ensure that your rights are protected.   In most cases, we can offer to represent you on a contingency fee basis.  This means that you do not pay legal fees unless you win or achieve a settlement on your case.